How brands can harness technology to build deeper loyalty with customers
28 January, 2019
By Kenneth Wong, Strategy Manager APAC, M&C Saatchi Performance
Brand loyalty refers to the tendency of a consumer to consistently choose a particular brand over another. A report by eMarketer in the US shows that 88% of consumers will only consider themselves as “loyal purchasers” after three or more purchases from the same company1, while 35% feel that it takes five or more purchases1. In addition,
- Brand Loyalist, which makes up 37% of the population. They are the ones that are truly loyal towards the brand and they would not switch even when given an opportunity to do so2.
- Repeat Purchases, which makes up close to 40% of the population. These are individuals who purchase the same brands frequently, but when given the opportunity to switch brands (like lower prices, or convenience, etc) they would have no problem switching2.
This makes the average life time value (LTV) of a consumer highly dependent on the consumer’s loyalty towards the brand – the more loyal they are, the higher their LTV. This makes consumer loyalty an important aspect to maintain if brands want to ensure the longevity of their business. How brands can then harness the power of technology to build deeper loyalty with customers?
Know your consumers.
Nothing is more valuable than access to customer data. With a CRM tool in place, brands can segment their consumers into various buckets for deeper consumer analysis. In fact, 74% of Senior-Level Marketers in the US agree that the best use of First Party Data is that it provides the greatest insights into customers3. By knowing their consumers, brands understand what they like and don’t like – and with this information, provide better services/products to cater to the needs of their loyal consumers. This means bugs can be fixed quicker, product features can be updated more regularly with smoother resolution of consumers’ disputes. However, this is only possible for brands who have a Direct-to-Consumer (D2C) operating model, mainly due to the data ownership. This isn’t possible for brands who sell their products or services via a third-party aggregator or ecommerce platform.
Prediction and forecast.
With proper econometrics and forecasting tools installed, brands can predict the future trends of their consumers. Strong predictive modelling would help brands to forecast potential consumer stagnation or issues. With this advance knowledge, brands would have enough time to develop a contingency plan and act on it, before their loyal consumers turn the other way.
Re-engaging lapsed consumers.
It is unavoidable for a brand to lose loyal consumers, what is important is to know how and when to win them back. Establishing a Data Management Platform (DMP) allows brands to understand their loyal consumers and reach out to them again via appropriate marketing channels when the time is right.
Brand loyalty as we see today is not the same as the brand loyalty 10 years ago. This is mainly due to the changes in the consumers’ expectation towards a brand. Hence, brands will need to evolve together with the consumers, and with the help of technology build deeper loyalty with their most valuable consumers.