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Customer Experience and Design

Customer Loyalty vs Customer Experience

I spend a lot of time with clients who very much want to create a relationship with their customers, patients, etc. A lot of them use a combination of their data plus a range of 3rd party data to round it out. Many have a loyalty program or want to initiate a loyalty program believing it’s a key pillar in customer experience and retention. Most of you readers have most likely signed up for at least 5 or more loyalty programs. I personally have signed up for at least 20 programs.

With that background, I recently read a article about Loyalty titled, “MasterCard’s Loyalty Chief: Rewards Are Not Enough” It has some interesting points so let me summarize them and then give you my spin on it.

  • “Rewards are still unbelievably popular”
  • “Rewards are table stakes these days, loyalty programs need to focus on the end-to-end consumer journey.”
  • “More than 60% of consumers worldwide say experiences define success—not things”


Usually I try really hard to highlight what I like and dislike about a particular viewpoint but the points above are spot on. I think most people involved in create a customer relationship would agree. So with that in mind, let me give you X trends I see in loyalty

  1. Some loyalty programs decrease the value of their rewards over time.  Airline miles cost more to use. Hotel points are worth less and can be used less. Credit card points decrease in overall value.
  2. Most are trying to combine experience with loyalty and failing due to poor understanding of their customer
  3. Too many programs view a loyalty relationship as an excuse to inundate you with a variety of communication
  4. Too many companies view loyalty as table stakes vs a way to improve the customer relationship


Today, you have a lot of information about your customer. You know what they bought. You know if they complained or had a problem. You know how much they have spent over time. You have a range of demographic information about this person which includes more than just age and income. (This becomes important later). Your loyalty program gives you even more information about your customer. If you engage deeply in your digital channel, you probably have a range of information on their buying journey and how they came to you. You should know how they want to communicate with you. That includes what channel, how often, and then things they find interesting.

If you combine all this, you have a lot of information. That should allow you to create a better relationship and customer experience both digitally and also in person. I would argue that this data should be used to determine what to say to a customer and in what manner. Some react well to email. Some may be at a point where a visit from a sales exec make sense. Some may need a show of appreciation rather than a 20% off sale.

Yet all too often, we fall back on the easy because doing this at scale is hard.  Let me give you an example. I’m a 50 year old technology professional with six kids who lives in a middle class area. My buying patterns show I spend a a lot of time ensuring kids are fed, that we enjoy educational and artistic activities with visits to the zoo, children’s science museum, botanical gardens, etc. My buying patterns don’t show a lot of vacations with my wife to experiences like the Superbowl, tennis championships, wine tastings, etc.

What do you think every credit card (and airline and hotel) sends me when they try to create a deeper relationship? You guessed it: wine tastings in California, a chance to be backstage with a superstar, a vacation for two with a complete package, my yoga weekend, etc. I know these companies took one look at my income range and made a lot of assumptions that aren’t even close to being true. In short, they don’t use the data they have.

What Tools We Should Be Using?

So I’m going to skip the best practices about customer experience and skip to the tools you should be using to develop that relationship. It’s not a complete list. It focuses on gaining the insight and then using the insight to action.

  1. A CRM or similar data store to understand your customer. You need a customer 360.
  2. Tools that capture interactions with your customer so you can gain a customer 360.
  3. Predictive analytics that give you deeper understanding of this customer so you can segment them correctly.
  4. Analytics tools to do a deep dive into customer understanding. Here’s where it gets fun. You have to be thinking about business intelligence, web analtyics, AI driven tools, visualization, etc.
  5. Rules engine or even better an Artificial Intelligence to provide a way to scalably interact with them in any channel.
  6. Communication tools to interact with your customer. This includes mobile app, campaign management tools, live chat, etc.

Of course, implementing them and maturing them represent their own challenges because you need to ensure they all work with each other to help create the right relationship.

Bottom Line

First understand your customer. Then use that understanding to communicate with them in meaningful ways. Some are looking for the deal. Some want to be treated well. Some want a rich customer experience. Almost everyone wants you to understand who they are and what business you have done with them in the past. Always work to get insights in context that lead to the correct action.

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Michael Porter

Mike Porter leads the Strategic Advisors team for Perficient. He has more than 21 years of experience helping organizations with technology and digital transformation, specifically around solving business problems related to CRM and data.

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