I recently found a Forbes article from last year that described how engagement will be the future source of customer loyalty. This was back in March 2014 and when talking of ‘the future’ you probably don’t expect it to arrive within a few months, but I would argue that as we are now entering 2015 it is already accepted that engaging with customers is the most powerful way to create trust in your brand. This is no longer the future.
Engagement is also good for your bottom line. There is a strong correlation between companies that actively engage well with their customers and increased revenue and profit.
As Forbes said in the feature from March 2014:
“Engaged customers trust your brand, advocate for you, and buy a greater breadth and depth of your products without as much price-sensitivity. They recognise that their strategies and your strategies are aligned. The engaged customers of one large technology company I talked to generate 33 percent greater revenue. And they are 4 percent more loyal and represent 12 percent greater share of wallet than transactional customers.”
These changes are taking place because the way that brands interact with customers has changed dramatically in the past few years. It is no longer the function of a ‘customer service’ department to be the sole owner of any contact between a brand and the customer.
Customers now want to talk to brands before a purchase, as the purchase is being made, and after purchase. They might be asking questions about how best to use a product, or engaging with a brand in a way that encourages additional purchases – a supermarket publishing recipes for example.
The nature of the customer relationship with brands has changed and communication is now a basic expectation. Engaging in communication with customers that makes them feel valued and excited about the brand certainly drives spending and retention, which is exactly what the old loyalty card systems used to do.
So are the days of the loyalty card numbered? I’m going to explore this in more detail in a future blog, but please feel free to leave your opinion in a comment or tweet me on @matt_sims1.
Photo by Roy licensed under Creative Commons.