Customer Loyalty: A paradigm in question
| Hot: |  | | | |  |
A question round in the air ... a company should focus its efforts on existing customers or win new ones? Should maximize satisfaction and customer loyalty or think about new types of customer-needs and how to meet their demand?
The answer you quickly get the majority of CEOs CMO'sy is conditioned by the universal power that ensures that we should focus on existing customers. The derivative of this is invested heavily in CRM CRM programs, loyalty programs and budgets are spent massive satisfaction surveys ... means by which improvements expected from increasing customer loyalty ... but ... the results ... are not expected ... (few would openly admit, but true ...)
Why are car brands spend hundreds of millions of $ in CRM programs if most changes in their next car mark ... despite being very satisfied with the earlier mark? Why leak rates are increasing even spending much money on retention programs? What incremental benefit contribute 90% of loyalty programs?, More ...
What is the opportunity cost we are paying for focusing too much on our customers with value propositions obsolete, and meet new market demands?
From my point of view must open a reasoned debate and question to what extent the focus of recent years in customer loyalty is hurting growth opportunities. stating that I am not claiming that this is so, but I see serious symptoms that require rethinking things.
One of the reasons why customers do not react to loyalty programs is because they are designed with a focus on value-fashioned, so when the client's situation changes, the value proposition becomes invalid even if very happy how it was previously brand (think of your bank, mobile operator, insurance, airline ... whatever, and why you went to another ...).
Certainly, competitive pressure is driving this process because it is increasingly difficult to differentiate the value proposition, but what changes the situations of clients and we are unable to respond to new situations, the effectiveness of any loyalty scheme loses much of its value.
In the coming years, focusing on the client will not be enough, but will remain essential as an axis of growth of short-term strategies will be combined with additional growth through innovation and increased supply segmentation based on situational.
(Continued ...)
Interesting approach. True, it is necessary to question the need for a loyalty strategy with serenity. It is not always necessary to create a loyalty program with points, gold card and silver and bronze. May aspire to a sense of loyalty exceeds the capabilities of many brands and companies.
But I am convinced that customer focus is and will be the key to marketing is to come. In my experience growth with existing customers through retention, up-selling, cross-selling is generally more cost effective than recruitment. And the segmentation efforts, knowledge and customer service personalization in the medium term, have always been beneficial.
Yes, the paradigms are to be discussed, you're absolutely right there.
Thank you very much for the comment William. Customer focus ... but it definitely requires more than a mechanical or obsolete plans to retain value propositions that are absurd when delivered too late or too expensive to "buy" customer loyalty. Overall I think that the paradigm of recent years needs to be clearly improved, there is much fat in large, do not you think?.
Of course, no point in trying to put 4 million cards with 2% discount for sending the catalog.
In my opinion, is the time variable incentives based on behavior, personal service, clubs very targeted segments, identifying alternative media, communication channels low cost ... and much, much analysis, so that every euro.
And you're right, in many cases there is enough fat to sweat.