Digital Transformation is considered a “game changer” which enables companies to better understand their customers and the way they interact with the different touch points. It also helps target different audiences and has profoundly affected the meaning of customers’ loyalty.
"Loyalty can be defined as a customer continuously believing that your organization’s offer (product or service) is their best option. It best fulfills their value proposition whatever that may be.” According to studies, 66% of consumers give up on a brand after only two bad experiences and are described as brand switchers. Undoubtedly, customer experience becomes a critical factor of customer retention, while poor customer service can cause nearly $6 trillion loss of revenue.
Strange as it may be, in contrast with companies/brands, customers are more likely to take advantage of the online opportunities that Digital Transformation has enabled. It goes without saying that companies become innovative on product quality, even pricing, but unfortunately they don’t pay as much attention as they should to customer experience. And when talking about customer experience, we refer to all kinds of customer interactions with the company (e.g. chatting on the website, contacting after sales support).
According to a Forrester report, each 1% improvement in customer experience quality results in an additional $15M to $175M in annual revenues.
Digital Transformation helps marketers reinvent customer experience and customer satisfaction and leads them to transform Customer Loyalty, from solely rewarding customers with a simple points scheme to taking advantage of customer insights in order to design a seriously personalized omni-channel experience for the customer.
Take for example Domino’s Pizza and how they have invested on customer convenience and purchase experience. Through the process of digital transformation, the company has actually reinvented the way of ordering, through a mobile application. So, in combination with targeted campaigns, Domino’s Pizza achieved an important financial success.
Apple Store could also be mentioned as an excellent example of digital transformation. From browsing to engagement and purchase experience, all stages of interaction can only ensure a happy customer, willing to wait patiently in line in order to visit an Apple store. This is the true meaning of customer loyalty.
These examples prove that customers’ loyalty is not only about increasing sales but also about changing the way customers interact with the brand. Not to mention that transforming loyal customers into your brand’s ambassadors can be achieved by improving the value that customers earn through the brand compared to its competition.
All of the above are indicative of what companies can provide their customers when they collect valuable information and data concerning their preferences and habits through a reward program. Let alone in this digital age, reward programs are considered the culmination of all sales, service and marketing customer experiences. Digital technologies can help companies create a comprehensive portrait of their customers by answering simple questions; Something that wasn’t possible in the past. Nowadays companies can accurately estimate:
- The number of people they engage with their reward programs
- The percentage of people exposed to the program
- The frequency of customers’ visits
- The number of inactive customers
- Customers acting as ambassadors through “refer a friend” campaigns
- Loyal vs non loyal turnover
Are you interested in extending your investment in customer loyalty? Here are 4 key practices for you:
- Collect the right data. Focus on data and collect information that will help you better understand your customers. Based on these, you will be able to differentiate customer experience.
- Redefine customer segmentation. Go beyond demographics and focus on buying behavior. Track how your customers react and use this information in order to properly adjust the experience you create for new customers.
- Create services processes. Don’t just rely on service culture. Companies need to scale out an exceptional service approach so that they ensure that every customer has a great customer experience.
- Make loyalty initiative part of your digital strategy. A loyalty program can only be successful if it is considered part of your entire digital strategy, instead of just being profitable on its own.