The importance of customer loyalty and meeting customer expectations
Why is customer loyalty important? How do we improve customer experience, meet customer expectations and create repeat business?
Marketing managers and business owners are consistently diving into data and reviewing insights that help them understand their customers. As managers, we seek to understand what creates an engaged customer and how to embed loyalty.
It’s not a secret that acquisition is one of the highest expenditures when it comes to marketing effort. There are many paths a customer can undertake when making a decision on which products and services are relevant to their needs. This means information needs to be readily available in the channels, and format, we expect the customers to be viewing and sourcing information.
From content development to ad serving, acquisition can end up costing anywhere from $50-$500 per lead. Whilst ad serving may look desirable with low cost per reach, or a low cost per click, when you review the total cost of setting up an acquisition campaign and attribute that to the total number of new leads, you will find that the cost per acquisition (CPA) can actually be quite high.
What does a high CPA mean for businesses?
With the CPA in mind, it highlights the importance of retention and more importantly loyalty and the process of creating repeat business from within the existing customer base. More often than not, businesses who operate on lower product margins (such as FMCG) will not gain a profit from the first transaction of a newly acquired customer. This is particularly true if the customer was obtained through an acquisition campaign. However as we nurture repeat transactions from the same customer (whether immediately or over a period of time), we increase the return on investment (ROI) from acquisition expenditure. This is the reason customer loyalty is, and should be, a central part of a business’ marketing strategy.
Salesforce and their Salesforce Research team surveyed over 6,700 consumers to discover the key influencing factors in customer expectations, the future of technology and customer experience as well as the role brand trust will play in fostering customer loyalty. 59% of customers surveyed voted tailored engagement based on past interactions as “very important” when it comes to winning their business. Further to this, according to the CleverTap Marketing Survey Research, customers also expect brands to respond to their needs and behaviors instantaneously.
So here we have two pieces of information that can act as winning advice for marketers. The hypothesis based on these insights is that “instant messages tailored to a customer’s past and current engagement helps to win business and nurture loyalty.” As a marketer, we would gather this information and start planning the next campaign. However nearly half of marketing leaders (47.7%) in CleverTap’s research indicated that they cannot execute same-day insights from their customer data.
The reality is these types of barriers exist in our day-to-day operations as marketers. While we may understand the customer expectations, delivering to those expectations can be heavily limited by the availability of technology and current processes. Whilst we investigate, research and dive into potential solutions that improve marketing returns, being limited by marketing technology (MarTech) and its integration within the broader business means we are unable to deliver improved customer experiences that maximise ROI for the business.
What do we need to ensure we deliver to customer expectations?
To successfully implement concepts, such as tailored and instantaneous messages, marketers need to overcome internal barriers. This includes things like:
- Ensuring quality data capture. Controlling forms, fixed input and reducing free form data capture.
- Working with platform and analytic teams to automated data and segmentation handling, instead of relying on manually lists that are uploaded into MarTech platforms.
- Integrating with legacy systems and prioritising the installation of MarTech as part of those systems and/or creating a single customer view that pushes data in real time between systems through a centralised data warehouse.
- Enabling more channels and touchpoints as well as mediums for engaging with customers, so customers can choose their preferred form of engagement while maintaining personalised experiences, through connected systems.
Customer loyalty in the form of repeat business, brand trust and product advocacy will continue to be a central part of business and marketing effort. However, understanding what your customers expect and want from their interactions with your business is only the first step to building loyalty and improving ROI. To maximise returns, we need to overcome the technology and data barriers between delivering to those experiences. Poor integration and data integrity can lead to poor experiences and become detrimental to building customer loyalty, in particular as it becomes evident to the customers that you do not understand them or fail to meet their preferred form of engagement.