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Wrongs Perceived as Rights in Customer Loyalty

We live in era where even the local shop just around the corner knows about, values and invests in customer loyalty.

Ozan Ercan
Pre-Sales Manager

December 27, 2016

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Wrongs Perceived as Rights in Customer Loyalty We live in era where even the local shop just around the corner knows about, values and invests in customer loyalty.

First our wallets have started filling up with cards, then, we started earning points. Soon afterwards, mobile technology entered our lives and printed cards have been replaced with virtual cards. Young and old alike, all businesses are all aware of the value of the customer. Almost all of us have a few words to spare when the subject is customer loyalty. In this article, I would like to shed some light on how much of these convictions are either right or wrong. There are many wrongs perceived as rights in regards to customer loyalty. Let’s evaluate some of these and learn right from wrong.

Theory 1: Customer Loyalty Emerges Spontaneously

There is a wide-spread belief in the marketing world that if you have good service or a reliable product, the customer is bound to become a loyal visitor over time. This perspective, in fact is an erroneous and even more so, a rather dangerous approach, since the firm completely ignores the customer approach as well as the customer management strategy. Offering products that meet the customer's needs and keeping customers on hand surely helps a great deal in establishing loyalty over time. However, developing customer loyalty is a process that must be carried out with a conscious strategy. Instead of leaving customer loyalty to chance, the company should aim to interact with the customer and improve customer loyalty using their competencies, channels and innovative ideas.

In short; customer loyalty does not emerge spontaneously, but it is contemplated and executed in a planned manner and developed over time.

Theory 2: Customer loyalty does not occur until shopping

Another common misconception about customer loyalty is that loyalty cannot be established until the purchase - or subscription - takes place. A purchase of your company's product or service is an undeniable indication of customer "interest" in your brand, but it simply does not mean that the customer is loyal to you. In reality, the seeds of customer loyalty are spread in the first instance that a customer comes across your brand or when learning about it. This first encounter can be a visit to your website, a post you publish on Facebook, or a visit to the physical location of your store and shopping there. All of these are important moments in which loyalty begins to be formed and must be well planned.

The higher the level of communication with the brand until the customer first makes the purchase, the higher the number of loyal customers will rise. Some of the alternatives that can be listed and are becoming increasingly popular among customers in terms of communication channels are product videos, online-trainings and seminars, in-store awards and prizes, social media, e-mail campaigns and blogs. Waiting for the customer to come and shop at first, instead of investing in establishing loyalty, may result in a big mistake. Communication with the customer must be carried out with a satisfaction-focused approach through all channels, from the first instance that a brand "touches" the customer.

Briefly, the first building blocks of customer loyalty are formed way before the first shopping but in the first visual encounter of the brand with the customer.

Theory 3: Establishing Customer Loyalty is the Customer Relations Team's Responsibility

Turning a customer into a loyal one and keeping him/her that way is not as easy as it looks on paper. Since customer satisfaction and customer orientation lies at the heart of loyalty, it is not possible to assign this responsibility to a particular department or group. Therefore, customer loyalty does not belong to a certain department or a group, it is everyone's duty. How can a process with such critical design be coordinated between the departments? It is true that all employees of a successful company should adopt this ideology everybody can contribute to establishing customer loyalty. So everyone must have a finger in the pie.

In short; actualizing customer loyalty is not a departmental but an interdepartmental role.

Theory 4: It is not possible to measure customer loyalty.

Our age is called the modern age, but we are actually living the age of knowledge. There is so much information that it is important to analyze the information correctly. As information is processed, analysis methods become more efficient and measuring customer loyalty is not as impossible as it might seem. Just as it is about creating loyalty, measurement requires coordination between departments. Since each department has different metrics, customer loyalty measurement is calculated by calculating the customer life-time value using parameters such as number of customer visits, duration of visit, and shopping frequency correctly.

Although the parameters used in loyalty calculation may seem meaningful on their own, it is more important to evaluate these parameters as a whole. An increase in the number of customers visiting your store or the duration of their visit alone may not mean that things have improved. For this reason, all data obtained should be evaluated optimally and used when gauging loyalty. Although it is not as easy to determine the profitability of the company by checking 2-3 values in the accounting department, customer loyalty can be measured with sufficient effort and work.

In brief; it is very possible to measure customer loyalty with the use of correct parameters.

Theory 5: Loyalty applications are costly for small-scale businesses

When it comes to loyalty investments, big companies with adequate market share and maturity are allocating the necessary amount from their budgets. But the so-called small and medium sized businesses arrive at a halt and are stuck when the subject becomes loyalty platform fees. Such companies in general perceive these fees to be of expensive nature for their budget and resources. With the development of cloud technology in particular, it is now possible to find a loyalty application for every budget.

As a matter of fact, your company's loyalty application is a vast sea that will grow as you invest. In the past, it was necessary to work with consulting companies for loyalty applications, conduct large data analyzes and organize massive campaigns, but today things have changed. Even the local shop around the corner is making strides in terms of loyalty and there are several loyalty platforms that can be created with a small fee. Although they do not rank in the top in the priority lists of small-scale companies, loyalty systems now have a structure that can be tailored to any budget at every stage.

In summary; loyalty applications have become affordable tools that offer a wide range of options for each company's budget and can be tailored to company-specific.

Theory 6: Next-Generation Customers are no longer loyal to brands.

The Y and Z generations, called the children of the new millennium, are quite troubled about loyalty. Since they have been born to a life of mobile technology, searching and testing for different products without brand addiction is part of their lives. One of the misguided judgments in the marketing world is that they do not invest in the loyalty of this generation, since their investment would go to waste.

It is not possible to talk about an absolute truth in regards to customer loyalty, since every company has its own client loyalty strategy. Thanks to the power of social media, brand loyalty has begun to gain a different dimension. In the past, the brand's commitment to itself has now left its mark on the brand's leading names on social media groups. Furthermore, thanks to the power of mobile communication, the brand loyalty of this generation directly affects the masses in their circles and turns into a power that grows exponentially.

In a nutshell; as it is a common misperception to assume that the new generation is not loyal to brands; the brands have now loyalty opportunities that they did not have in the past owing to mobile technology.

The World of Opportunities

To recap the main points of this article, if the world of customer loyalty is managed correctly, there is plenty of opportunity in it. The important thing is to be able to take the right action at the right time, in the right place. By virtue of the PayFlex Loyalty applications, which are designed with a modular structure to serve the needs of the companies' loyalty, enable institutions to take the right steps towards the loyalty of their customers. There is no longer a need for six-figure budgets to earn points, discounts, or campaigns based on interests. It is possible to design loyalty schemes in the most optimized manner thanks to need-based modules.

Tags: CustomerLoyalty