Posts Tagged Brand loyalty
It’s all change on the high street and not for the good. This is what we hear constantly in the media. The high street is dying, so much so that the government commissioned Mary Portas to come up with key recommendations for reviving it. The change has been driven almost exclusively by the internet.
Some shoppers adopted on-line shopping early, the majority took a little longer to trust it, but trust it they now do and it is a hassle-free, time-saving way to shop. We live in a world where time constraints are ever increasing and the internet provides the opportunity to help us in our daily lives by bringing the high street into our homes.
The high street itself will inevitably suffer, if we continue to take the view that the high street should remain as it has always been. Change, however, will come, whatever anyone does to try to stop it and however much everyone moans about it. We can see that these days, traffic is driven primarily by offers and sales. Customers wait for the sales, which happen at the same time at key points in the year. They know that if they wait, they can by it for less. Retailers are tied into these sales events, locked into them by the sales spikes they create and unwilling to take them out of their marketing calendar as they guarantee a certain level of sales. Yet the same pattern of marketing year in, year out will mean that customers grow accustomed to this and alter their behaviour accordingly. Retailers need to act smarter if they are to drive traffic throughout the year and to excite customers in other ways.
Similarly, the internet and its on-line opportunities should be seen as a key sales channel to enhance overall sales, rather than as a rival to the high street stores. The priority for brand marketeers should be selling the brand through all channels, so that the customer can choose the one which is right for them. This brings the customer choice and levels of service which will lock them into the brand intrinsically. If this is done well, the high street presence of such brands will benefit as well as their on-line arm, which should effectively to seen as another store, albeit virtual.
To save the high street, retailers need to focus on three things: the right product, genuinely high levels of customer service and specifically targeted marketing programmes, where they can address certain segments of their audience at key times to improve their return on investment for every marketing programme they undertake. The right product speaks for itself, whilst not always being the easiest thing to achieve. Outstanding customer service is vital for brands to survive in the future. Look at John Lewis, one of the few retailers turning a genuine profit in the midst of retail recession and a large part of it is down to their service provided by motivated and well-informed staff. Customers trust the brand and keep coming back for more. Finally, an effective customer relationship marketing programme enables retailers to talk to segments of their customers in ways which genuinely engage those customers and their specific interests, regardless of which channel they use to shop the brand.
Change is inevitable. Instead of bemoaning the change, we must embrace it and listen to what the customer wants. After all, the customer is always right….. we just don’t always remember that!
Traditional customer loyalty programmes are based on rewarding customer behaviour in order to build up a relationship between the retailer and the customer. However, the established method of collecting points to earn prizes does have a shelf life. As a result, retailers and brands are looking to gamification and how it can be integrated into CRM systems and marketing programmes.
The conventional method of rewarding customers with points does work and has proved to be highly effective for some retailers. However this traditional method does have its limitations, in that it has become commonplace amongst big retailers and therefore, no longer offers a point of differentiation. The competitive advantage of having a standard points loyalty scheme has waned and such systems do not always provide the retailer the kind of in-depth understanding they require to maximise the effectiveness of segmentation and therefore, sales.
Gamification can be defined as the use of game design techniques and mechanics to help engage with audiences. One of the most popular forms of gamification currentlyis FourSquare, which has over ten million users. Users can claim ‘Mayorships’, unlock’ badges’, and on a more standard level, receive special offers and rewards such as discounts to specific retailers, while also tracking against friends via a leader board. All of this makes gamification as a mechanic for a CRM programme much more engaging and appealing to certain users.
It could be argued that not everyone has access to the internet or Smartphone’s and gamification will only appeal to particular age groups and therefore is possibly limited in its effectiveness. However, if you consider how rapidly Smartphone usage is growing and that access to the internet is more widespread than ever, it is impossible to ignore this as a new possible CRM platform.
The biggest challenge faced by retailer with established CRM programmes is how to integrate gamification into existing programmes and to decide whether or not they feel it is appropriate for their target audience and product mix. There is little doubt, however, that retailers who are able to embrace a more interactive CRM mechanic will engage their customers more readily than with the tired points schemes of old. Deborah Stone, Managing Director of The Stone Consultancy comments: ‘Smart technology is changing how people deal with the world across all elements, not just online. Gamification is an exciting development for retailers to consider when moving their strategy forward.’
On a week when the world is coming to terms with the death of Steve Jobs, founder of Apple, founder of Pixar and all-round visionary entrepreneur, it is pertinent to remind the world of what he achieved. He not only revolutionised the way the world used computers, he invented touch screens, the mouse and he revolutionised the smart phone. The smart phone and indeed the tablet were not necessarily new when Apple took them on, but Jobs made them iconic, beautiful, user-friendly and ultimate objects of desire.
Steve Jobs understood what the customer wanted; a thing of beauty, with amazing functionality, which was simple to set up and to use. What he also understood, however, was the importance of customer service. Before the Apple stores arrived on our high streets, particularly in Britain, service was sub-standard. Apple arrived and suddenly, that changed. You could walk into an Apple store and the staff greeted you with a smile. More amazingly than that, they understood the products they were selling. This had never really happened in a technological store of any kind in the UK before. Normally, staff in these outlets were and sadly, in the main, still are, woefully undereducated about the products they sell and disinterested in the products to boot.
Apple was different. The stores were bright, you could play on all the amazing toys in there, people took the time to help you with small queries. In addition, you could be over the age of 30 and they would still talk to you as if you had a brain and some technological sense. If you didn’t, they would not patronise; they would educate and help.
So Jobs built a brand foremost on beautiful, must-have looks and functionality, but he also understood the follow through. People love Apple products not only because they are cool, but also because the service behind the product is second-to-none. Have you ever heard anyone criticise the service from Apple? The stores may be busy, you may have to wait, but high quality service is what you get. And you get the same high standard of service online too.
So why is it that so many UK retailers fail to tackle customer service and fail to recognise it as a critical tool to ensuring brand loyalty? Yes, it’s expensive to recruit and train the right staff. But surely it’s more expensive to have under-paid, disinterested staff, who fail to engage the consumer and detract from, rather than enhance, the shopping experience? Why spend money on expensive shop fits or beautiful product, if the staff in the store are chatting in a corner, or can’t help with your queries?
John Lewis gets it right and as a result, is trusted. Their customer loyalty is built more on service than almost any other attribute in the store. Deborah Stone, Director of The Stone Consultancy, one of the UK’s leading retail consultancies, believes this is the most over-looked aspect of customer loyalty in the UK. ‘The staff are your outward face to the customer. If they don’t love the brand, if they don’t know the product details, why should the customer love the brand and why will they keep coming back? Customers want to feel informed and appreciated.’
So, let’s remember Steve Jobs as a great visionary and as importantly, as a man who understood what people wanted in terms of service. We could all learn a lot.