What is Loyalty?
What is Loyalty?
Every organisation has a customer franchise that it can positively exploit however shallow the relationships are. Maximising the value available from each and every customer is the ‘gold standard' to be achieved through any loyalty initiative. Customer loyalty is all about enhancing the propensity of customers to make repeat purchases, it's about minimising customer attrition and maximising ‘wallet share'. It's about developing advocates - customers who will encourage their friends and family to purchase; and it's about developing relationships with customers where communication is central to the task of generating loyal customer behaviour.
Customer loyalty has become a mainstream focus for most successful consumer facing businesses. The development of a loyalty strategy or initiative can focus on one of a number of aspects of customer service, from the all encompassing ‘cradle to grave' customer experience to the tactical ‘save a customer' campaign.
Loyalty initiatives are a significant undertaking for any organisation. They can require substantial start-up capital depending on the size of the business and they require an ongoing financial commitment which is often a substantial incremental marketing cost. In our experience measuring the benefits that can flow from a loyalty program is often a subject of immense frustration. For many Financial Directors who understand the need for investing in customers, they are can be less than convinced about the true return on investment (ROI).
At Loyalty Consulting UK, we are obsessive about measuring every loyalty initiative, action or scheme in order to learn and bring about continual improvement whilst an organisation learns about its customer assets. Identifying ‘wallet share', the breadth and depth of relationships and the optimal regularity of spend are key issues that we help our clients to understand. The bigger picture of ROI is complex and can only truly be understood if first the organisation defines a roadmap with a number of simple measurement criteria that indicate the health of the scheme/initiative. We help our clients to better understand and undertake such measures, allowing them to steer a course toward a positive ROI that build significant ‘customer capital’ over time.
