Loyalty making a big comeback
Marketing media often talks about shifts in consumer behaviors, and how those shifts are changing the way marketers do their jobs. But these discussions are usually held in the context of things like social media, mobile, the internet, etc. Hugely disruptive factors, to be sure, but each has had many years now to mature (decades in the case of the web itself).
Yet, consumers remain a transient force in today’s commerce ecosystem, and the pace of their behavioral changes hasn’t slowed as digital media has matured. More accurately, the evolution of digital media and technology has created an environment where shoppers are almost perpetually changing.
Here, we’re talking a look a a few of the least talked about behavioral changes that are driving consumers to engage with brands in new ways, and how or what brands are and should be doing in response to these changes.
Now, outbound is in
The internet is well understood as the single most disruptive force in modern business. It thrusts full autonomy on its users, and in doing so, has driven the flow of commerce (particularly ecommerce) from search-based, through a discovery phase, and now, to marketing’s current reliance on data-based targeting and optimization.
“Each year a larger percentage of sales comes from brands finding buyers instead of the other way around,” says Thatcher Spring, founder and CEO of ecommerce platform Gearlauch. “So, we’ve gone from search to discovery to targeting. Brands that haven’t done well at shifting to that new strategy, and are only playing defence are missing out on these opportunities.”
In many ways. this emphasis on outbound marketing through retargeting and the like is the next logical step in the evolution of digital commerce, due in large part to the abundance of data at marketer’s disposal. Inbound tactics end up being more passive than truly effective in such an environment. However, that doesn’t mean that marketers should be binary in their strategies either.
One of the greatest strengths of the internet age lies not only in its abundance of information and data, but in people’s tendency to merge with others who share their interests. On the surface, it’s easy to equate online communities with social media; after all, that’s where we see people forming networks with friends, family, and colleagues. But social networks are, first and foremost, social networks. They are built around interpersonal relationships more than anything else.
Marketing, in this context, functions more as background noise; branding and advertising as a backdrop while real people engage in real interactions. That’s not to say brands have no place on social media. Rather, brands will probably benefit more by engaging with consumers on online communities that are directly related to their business.
“There are a lot of under-served [online communities] from a marketing perspective, and probably chief amongst those are customer support communities,” says Steve Hamrick, VP of product management at SAP Jam.
While “customer support” may evoke call centers and live chat, when it comes to online communities the term can be used to represent a wide range of groups with brands and products at their core. Reddit is a hub of many such groups, but fansites like MMO-Champion (a site devoted to Blizzard’s computer games) and Android Central (central location for all news related to the Android operating system) are great examples of online communities created around a product or brand.
Creating brand ambassadors and having them engage on [these communities] will be a critical factor for success as consumers increasingly trust peer reviews and peer-generated content, rather than brands, for the customer experience,” Hamrick says.
The rebirth of loyalty
With so many brands, media companies, and content creators all vying for consumers’ attention, it’s not the least bit surprising that loyalty programs are making a strong comeback.
Brands are doing everything in their power to incentivise, not just patronage, but actual loyalty; the kind of loyalty that drives customers to the aforementioned online communities. Even big brands like Marvel Comics—one of the most successful names in entertainment, and a brand that had no trouble generating intensely loyal readers—introduced a loyalty program this year.
The Marvel example is nontraditional in that it incorporates practically any digital experience into its rewards paradigm, so members can earn points for doing as little as watching a video or sending a tweet. In this, Marvel’s loyalty strategy falls in line with an emerging trend in loyalty marketing of rewarding organic digital behavior.
Through practically standard practice now, credit card companies were some of the progenitors of rewarding customers for activity that wasn’t necessarily tied to arbitrary shopping patterns. Spend x amount with your Chase card, get rewarded in non-Chase bank gift cards. It’s a simple concept that gives brands an advantage in an age of autonomous customers.Marketers still have work to do in this area, however.
In Canada and in the UK, coalition loyalty programs are incredibly successful at bringing together merchants and brands in a unified program. Shoppers in those countries can earn and redeem common rewards from participating retailers, whereas the U.S. model still relies on each retailer offering its own loyalty program, its own specific rewards and creating more fragmentation,” explains Mindy Shouse, VP of Interactive at loyalty marketing services company Excentus.
Even if not through coalition loyalty programs, loyalty marketing presents a potentially powerful intersection to explore between empowered consumers and the communities they create.