Loyalty for the Modern Digital Shopper

Capturing the hearts, minds and wallets of today's consumer is a high-stakes fight with clear winners.

As both emerging and established companies work to increase their market share, loyalty is a topic echoed throughout the business community. Despite the rise in the availability of information and how digital consumers use it to make purchasing decisions today (e.g. user reviews), the fundamentals of loyalty ultimately have not changed.

Customers, whatever they look like to your enterprise, aren't as complicated as those involved in their company's Web success make them out to be. Buyers are loyal to brands that anticipate and meet their wants, needs and desires and continually provide them with better products/services than the alternatives. Today's fast-paced, multi-channel world complicates a simple "golden" concept - give customers experiences you'd want and expect.

Choosing to engage with customers today, however, means companies must do so across each of the transactional and advocacy moments in each channel, according to Josh Schiffman, SVP strategy & operations at Xtify, Inc. This requires marketers to identify, map, and act upon engagement opportunities across dozens of "digital" and "physical" channels and interaction points.





The Pareto Principle, or the 80-20 rule, tells us that about 80 percent of effects (e.g. revenue) come from only 20 percent of causes (or customers in our case). As digital marketers, website owners and the like, it's easy to focus only on the acquisition side to generate new business (and profits), but don't miss out on opportunities to increase revenue over the long term through customer retention initiatives. It's well-accepted that it costs far more to acquire new customers than to retain existing ones, yet KISSmetrics reports that 63 percent of marketers believe new customer acquisition to be their most important advertising goal.

To change your thinking about retention as a catalyst for business growth, it's first essential to evaluate current customers and their sentiments about your brand. Today's shoppers are social, and they're actively sharing how they feel about your products/services with others. The question is, are you listening to those conversations? Addressing user compliments and concerns (as well as complaints) is paramount to not only driving conversions, but also sustaining commitment and market share.



Leveraging Ratings & Reviews


Pehr Luedtke, general manager of Connections at Bazaarvoice says the best brands are looking through massive datasets and taking the voice of the marketplace as a feedback mechanism (e.g. who likes/dislikes their product the most) and then improving their products based on those insights.

This is an increasingly challenging feat though, as consumers are regularly switching digital channels (from websites to social media to review sites) to obtain, consume and share information, and are using a variety of devices to do so (from desktops to tablets to mobile devices).

Working with Bazaarvoice's Conversations solution, is one way to analyze the flood of ratings, reviews, questions and answers around a business. In a visual dashboard, the platform identifies feedback patterns to help companies make smarter decisions in every area of their businesses.

The Land of Nod, an upscale children's furniture store, was an early adopter of using ratings and reviews to uncover potential product improvements. Using Bazaarvoice, they analyzed customer reviews and acted to address problems on products that customers commented on. For example, The Land of Nod customers liked an activity table and rated it 4.8 out of 5 stars on average, with 90 percent of reviewers saying they'd recommend the product to a friend.


More than 1 billion consumers are active on Facebook, which could make the popular social network an option to host your ecommerce store. StoreYa is a social commerce platform designed for automatically importing Web stores onto Facebook, having them fully customized to fit both the Facebook arena and the original brand's look and feel. StoreYa's solutions are designed to take full advantage of Facebook's social features, as well as to add unique engagement and gamification tools in order to gain more fans, purchases and data. Additionally, StoreYa's marketing tools are designed to reach out to the fans' newsfeeds and encourage them to visit the brand's store, promote specific products virally and convert Web store's traffic into Facebook fans. In the image above, you'll see AIRWALK's Facebook store powered by StoreYa.


Once The Land of Nod dug into specific customer comments, however, they learned that the surface of the table had a tendency to get scratched easily. The Land of Nod designers went back to their vendors and through a thoughtful process, re-engineered the tables for greater durability. The Land of Nod contacted reviewers who mentioned the table's soft surface and offered them a new and improved table - free of charge. 

The key takeaway from this example is that The Land of Nod makes the most of their brand advocates by acting on their suggestions, further improving customer loyalty. The real shocker is that this took place in 2008. Five years later, most brands are struggling to respond to customer feedback - even those with the resources to do so. The trend is most evident in social media.



Making Social Feedback Work


While 97 percent of the Top 100 Interbrand Brands were active on Twitter as of June 2013, only 32 percent had dedicated customer service handles, with 19 percent sending 10 or more customer service tweets a day, according to Simply Measured research.

Using indicators like average response rate and response time, Simply Measured named the top customer service brand performance, which included @UPSHelp, the Twitter handle for UPS customer support. The UPS approach to social media support is three-fold and can be quickly adapted by almost any brand.

First, UPS includes the hours when their customer service Twitter account is staffed. This helps manage user expectations, as for the most part, Twitter users expect real-time responses, regardless of the time of day. Another Twitter tactic to follow that can turn brand detractors into advocates is including pictures and names of the customer support team.

This attaches an actual identity to interactions, personalizing an otherwise detached experience. Lastly, UPS responds to feedback, even if it's just moving the conversation to email. For example, this tweet "It shouldn't be this difficult to have a package delivered. @Nordstrom and by association @ups are making their way into my bad works" got this response "What's going on? Email twitter@ups.com with the tracking #, your contact information and the details."


The main point around any flash sale site is words like "exclusive" and "invited." There's a membership type perspective that users are on a "special" list, so a brand is asking them to come back. Andrew Walker, VP - Atlantic Territory Practice Lead at Acquity Group says brands can amplify this experience with a personalization element, directing shoppers toward areas of the site that are part of their interests. For example, product detail pages and apparel that is similar to what they have purchased in the past. By doing so, the visitor has a sense of "I know this brand. This is familiar and exclusive to me."


Responding to customer concerns is not a new concept, of course, but in the past, brands could only interact and create memorable experiences at the point of purchase and through product consumption. The opportunities to expose customers to a brand in their purchase lifecycle was limited - but that's no longer the case. 

"Now brands have limitless opportunities to interact with consumers through the entire buying decision process via multiple channels and mediums, whether it be in-store, online, via mobile or on social media," said Alex Gonzalez, CEO and co-founder, Chatalog.


Encouraging Collaboration


Loyalty is the result of long-term relationship building, and while social media interactions are a good start, savvy brands know it goes beyond that. Put yourself in the shoes of the customer. What questions do they have? Who do they trust? How do they make decisions? What's important to them?

"Answering these questions pre-digital age was hard, time consuming and expensive for brands," said Gonzalez. "Today all of those answers are out there. Brands can provide resources that answer these questions for their customers and provide tools that enable conversations that help get to the answers."

That's where alternative social networks like Chatalog come in. The collaborative shopping technology mimics the experience of walking into a physical store (alone or with a friend) and the conversation that occurs with that friend and/or brand representative. Through user-created pages, users can invite friends, family, experts or brands for an open (but private) discussion, share ideas and make informed decisions about online purchases with the people they trust the most - delivering a rewarding and memorable experience.




Rewarding Behavior

The move toward digital engagement with a brand and other users at every step of their purchasing path has also changed what loyalty programs look like today. Discounts and high-value rewards are effective, but costly. Today, the same result (increased purchases), can be achieved through rewards focused on status and recognition. This, according to Luedtke is because the advent of social gaming has introduced customers to the idea of using gaming to receive incentives. Small wins - e.g. a new level, an extra feature - feel good for consumers. Luedtke says it's a virtuous cycle where brands create a non-financially based reward system to encourage engagement among users. This is how Step2, a seller of children's toys and home and garden products, encourages repeat visits.

Step2's "BuzzBoard" rewards parents, typically moms, with points for reviewing products, having followers, getting their reviews voted on as "helpful", sharing and more. There are different levels of status on Step2.com, including queen bee, super bee, honeybee, busy bee and new-bee, which enables customers to see how their rewards (and loyalty) compare to other users through leaderboards, badges or self-promotion. This tactic also gives consumers reasons to return and re-engage with the brand, because they want to know how they are doing compared to their peers.

Step2's strategy works particularly well, because it is audience relevant. A PunchTab study (wsm.co/loyaltymoms13) revealed that 81 percent of moms will engage more with a brand when offered some type of incentive. In addition, the study found that some non-financial compensation, like elite status or early access to products, can also work as behavior motivators for moms.


PunchTab recently launched its new loyalty application for ExactTarget's HubExchange, allowing marketers to reward engagement and create loyalty within email. PunchTab App for ExactTarget HubExchange expands the company's ability to integrate consumer behavior across Web, social, mobile and retail with ExactTarget email, giving marketers a more complete picture of the consumer with information from all components of engagement.



Streamlining the Experience


Many brands are overwhelmed by the demands of digital buyers who expect a shopping experience that is fluid from start to finish and from device to device. Often referred to as "omnichannel," the strategy touches all of a company's systems, from marketing and training to order fulfillment and customer service.

C. Wonder, a lifestyle brand and retail concept for women, is an early-stage company that has seen the successes and failures of those trying to integrate digital and real-world touchpoints with 20-year-old legacy systems. Its advantage is that its overall ecosystem was built to be cross functional from the beginning. Katherine Bahamonde, CMO and EVP of global ecommerce for C. Wonder has heard that for most companies, omnichannel is a 2016 initiative, realistically. With C. Wonder, the company is addressing omnichannel through its culture, down to employee training. When a new employee is hired on, they are "hit over the head" with omnichannel, including a video on it, as well as training on capturing emails, compensating brick-and-mortar stores for Web sales, etc.

There is more to loyalty than streamlining the experience, C. Wonder is also building brand loyalty through traditional techniques like offering gifts to big spenders, creating hand-written notes for regular customers and other "surprise and delight" type gestures. They also plan on rolling out a loyalty card program to incent purchase, but much of their efforts are engaging in local influencer relationships and ties with the blogger community. They have a huge local push with hypertargeted Facebook and Twitter efforts and local events.

Concerning its more advanced digital customer experiences, C. Wonder recently moved its site to the hybris ecommerce platform, enabling C. Wonder to provide users with a collaborative, social-driven shopping experience. For example, if a shopper liked a purse on Facebook, then came back to the site in two weeks, and logged in with their Facebook credentials, C, Wonder can display that purse on a home page image.


Rewarding consumers for positive behaviors (e.g. purchases, social activity, etc.) is a win-win for brands and customers. To take advantage of the many benefits of loyalty and engagement programs, however, companies must transcend paper punch cards to offer comprehensive SoLoMo (social, local, mobile) offerings.


"The social aspects don't drive loyalty in my opinion, but what is most important is that integration with social media allows the retail to speak directly to a customer," said Steven Kramer, executive vice president of sales - Americas, hybris. "And that's what drives loyalty." 

While this is one way brands can speak to buyers based on their preferences, there are others. Hybris's commerce suite offers targeted and relevant content to engage and create brand advocates by automatically segmenting customers.

For instance, retailers using hybris can segment by a user's gender, income or past purchase history to personalize their shopping experience. To explain this idea further, if a female shopper between, say, 25-35 years old arrived at a site, the products (and even the navigational elements, images, prices, etc.) that are shown to her would be different than a male shopper in the same age group.

These hyper-personalized experiences can even include a shopper's interaction with an attendant at a call center, as was the case with hybris customer 3M. For example, when 3M sold plastic surgical gloves, the way they described that product to a nurse versus someone in the construction business who needed plastic gloves had a very different product explanation.


Hybris is one viable option for companies (both B2B and B2C) looking to personalize and streamline their user experience, but far from the only one. OpenText Web Experience Management also helps brands differentiate their market presence from competitors by further personalizing and improving the overall customer experience on their websites. OpenText can facilitate positive relationships with customers before, during and after interactions with persona-based segmentation, as well as its real-time customer insights and analytics functionality to ensure content is compelling for an individual user. 

If you're not on the personalization bandwagon quite yet, consider this. Consumers get confused (and irritated) when a mobile website they frequently visit isn't personalized at all while the desktop site seems to "speak to their needs". "With little effort, brands now have the opportunity to bring value to their customers when the customers want it most," said Shiffman. "Personalized brand experiences for websites, apps, and passbook/wallet concepts - using location, customer history and preferences, wrapped in insight, and more - each allow your brand the opportunity to be more relevant and appealing to the consumer. Those brands that stand out in a good way will win the ongoing loyalty battle." That granular level of personalization is defining today's loyalty building. By driving relevancy, brands are turning onetime purchasers into repeat ones.




Although previously mentioned, it cannot go without repeating that today's consumers have access to the entire world at any time (via the Internet) in their pocket. Any brand looking to foster a customer journey that builds loyalty better incorporate a strong mobile strategy.

Consumer brands can communicate around the clock through email, text, and more importantly, through their apps and mobile websites - making the opportunities for driving loyalty endless.


"Mobile is central in this discussion because every channel that was previously 'digital' or 'physical' has been subsumed or given a different context because of mobile," said Schiffman. "For example, your customers are now visiting your brand's website and reading your emails while they wait in line for coffee in the morning. When your customers are in your store, they likely have their smartphone in hand and are multi-tasking. They do the same thing while watching T.V., Netflix or Hulu. 

"Loyalty used to be about siloed marketers empowered by digital data trying to understand the impact of their own campaigns. Loyalty marketing has since evolved such that brands are thinking about engagement attribution across the multiple channels."


Pushing Notifications


To this end, Xtify has built a platform that allows brands to engage intelligently in each channel and take advantage of the specificities of each. Using Xtify's push notifications platform for Web and native applications, brands can provide value to their most loyal customers further moving them to advocacy.

Creating a great experience for your customers when they visit your mobile websites is an excellent way to create brand loyalty. Xtify's Web-based push notifications provide marketers with the ability to use what they know about their anonymous (and credentialed site visitors) in conjunction with other cues to dynamically present contextually relevant content and offers in real time. "Web pushes" that convey meaningful information are a key component to creating a Web experience that your advocates will cherish and promote.

Digby, which helps retailers achieve their omnichannel goals, has its own take on real-time engagement, using real-world locations from a consumer's mobile device. Digby Localpoint pairs location detection with a contextual engagement engine and best-of-breed notification capabilities to help make branded mobile applications more intelligent, relevant and engaging.

We are at a turning point in mobile marketing, suggests David Sikora, Digby's CEO & founder. "Before, rich apps were treated as an extension of mobile commerce and the capabilities for personalization were limited. Now, industry leaders are providing right place, right-time engagement that is triggered by activities of the app user in the real world. This next generation of mobile marketing will bring relevancy and value to marketer and consumer alike."




Building loyalty is truly a rewarding approach where the journey does matters.

"Brands build loyalty by developing meaningful and memorable relationships with their customers," said Gonzalez of Chatalog. "It's the feeling of importance when you walk into a store with your friends or family and a brand representative goes out of his or her way to provide you with a great experience. It's the time she took to listen to you, built a relationship with you and personalize your overall experience based on that conversation. This collaboration can now be taken online and enhance the relationship between the brand and the customer - ultimately driving long-term brand loyalty."