Strategy and Planning

Want Loyalty? Reward Them with CX

The Digital Essentials, Part 3
The Digital Essentials, Part 3

Developing a robust digital strategy is both a challenge and an opportunity. Part 3 of the Digital Essentials series explores five of the essential technology-driven experiences customers expect, which you may be missing or not fully utilizing.

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Companies and brands are building loyal customers the way real people are building loyal relationships with each other: one interaction at a time. Each and every interaction is a new opportunity to prove ourselves, build credibility and trust, and leave customers with a memorable experience.  The true measure of loyalty is not how many points a customer has racked up, but how often they come back and how excited they are to share that experience with their friends, family, and acquaintances. The recall of those interactions and experiences is driving loyalty in today’s customer-centered marketplace.
Delivering a great customer experience (CX) can drive three types of customer loyalty: retention, enrichment, and advocacy. Retention loyalty is what we think of first: earning a repeat customer by building on trust and reliability. Enrichment loyalty is measured by the amount of incremental purchases. Think cross-sell and up-sell. At an emotional level, these are “rewards” that the customer is giving back to the brand for continued positive experiences. Finally, advocacy loyalty attracts new customers through positive word of mouth that can expand rapidly among friends and acquaintances. The brand power of consumer advocates can be more powerful than Jesus riding a dinosaur in a Super Bowl ad gone viral.
Ultimately, retention, enrichment, and advocacy translate into higher profits for you. A recent Forrester study confirmed the revenue benefits of loyalty built through good CX. They found that each 1% of improvement in CX quality – as measured by their Customer Experience Index – resulted in an additional $15 to $175 million in annual revenues. Where your company falls within that range depends on how easily your customers can switch to a competitor. The easier it is to switch to a competitor, the more impact your CX has on your loyalty and revenue. While a competitor may be able to match you on price and product, a great CX is hard to replicate.
The connected consumer is highly informed and in control of their shopping experience, with switching costs increasingly attractive. Appealing to the consumer at all points along the shopper’s journey is fundamental to building the right CX and cultivating real loyalty. Keep giving the customer rewards points, but reward them with a great CX.

About the Author

Jim Hertzfeld is Principal and Chief Strategist for Perficient, and works with clients to make their customers and shareholders happy through insanely great digital experiences.

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