In the past, you could rely solely on the quality of your product or service to keep customers coming back. Today, the pressures of commoditisation, globalisation, and a crowded market make it important to include sustainable values. In this article, we'll look at how being environmentally friendly can help build long-term, profitable relationships with customers, specifically when related to a loyalty rewards scheme.
You’ll Build Your Brand
Numerous studies have shown that consumers would rather support retailers, service providers, and manufacturers who share their beliefs. You can increase sales and customer loyalty by capitalising on people's concerns for the environment. Use the power of the Internet and social media to get the word out that your company is taking environmentally responsible steps by offering a green loyalty rewards programme. Your company's reputation will soar, and your bottom line will expand if consumers perceive that you're a leader in the sustainable space.
It Can Be Your USP
Every business needs a USP – a unique selling proposition – to help it stand out in a very large crowd. With a sustainable loyalty rewards programme, you can take this idea and run with it, ensuring that you deliver on the eco-friendly promises and message you put out there.
Having a USP means easier marketing and better branding, and you can stand out above your competitors who may not yet have understood quite how important this way of working can be. By offering a rewards programme that acknowledges this, you can prove you’re doing all you can – and more – to be environmentally conscious.
Align With Your Customers’ Values
People like to buy from people. They also like to buy from people like them. If you can show that you are an environmentally friendly business through a variety of means, including your customer rewards programme, you will find you can more easily align yourself with your target market’s principles, giving you a much better chance of not only finding new customers but keeping them.
With a sustainable rewards programme that offers rewards such as one that offers incentives for customers who recycle and reuse or who opt for in-store shopping rather than having their goods delivered, for example, you can show what you believe in and gain customers because of that.
To win and keep clients, a green position is going to be more and more essential. It will become crucial to incorporate this into your loyalty marketing system. In reality, it will rapidly become essential, especially for sectors that are thought to have a major influence on the environment. If you are on the fence about starting up a loyalty scheme and you want to be sure you’re doing the right thing, this should help you see why it’s so crucial.
“If you are not taking care of your customer, your competitor will” – Bob Hooey. And that’s exactly where loyalty programs come in. Why do they work? Rob Meakin, Managing Director at Loyalty Pro, explains.
Those are words for any business leader, retailer or independent store owner to live by. But actually, are you taking care of your customer? Are you putting them first, or your business first?
The difference between the customer of 2008 and 2018 is very different. Ten years ago, online retail was a relative youngster, the high street dominated retail purchasing and waiting 3-5 days for an online purchase to arrive wasn’t considered strange. Nowadays, customer loyalty has shifted from brand to service, Amazon now offers delivery within an hour and consumers do a vast amount of their shopping online.
The decline of the high street store and rise of online shopping have reduced footfall and revenue for many companies looking to compete in an increasingly shrinking space, particularly those in the independent retail space.
In a country with increasing inflation, tightening purse strings and a lack of confidence in its economic future, gaining customers’ loyalty and increasing repeat purchases is more important now than ever before.
Whether you’re an independent coffee shop owner or Managing Director of a local toy store, everyone is looking for a solution to increase footfall and entice the customer back.
Empowering the customer
This solution lies within a loyalty programme that addresses the needs and wants of the customer first and the business second. Yet far too often, loyalty schemes are designed with the latter in mind. Look at Tesco – they attempted to redesign their loyalty offering to make it “simpler” for the customer, but appeared to put their business interests first.
And what happened? The move not only alienated customers, but the social media and general public backlash was so pronounced that it forced the supermarket to delay rolling out their new scheme. What Tesco didn’t do was to think about what the customer wanted. Or if it did, it certainly didn’t do enough market research on it.
It put the supermarket on the back foot and facing a PR nightmare. It took power away from the customer by “simplifying” its vouchers, but what this ultimately meant was reducing some of the vouchers’ values. This was very much egg on the face for the UK’s biggest retailer.
The sweet spot of simplicity
Pulling wool over customers’ eyes in the case of the above example won’t go down too well. But actually, businesses are able to create a loyalty scheme that can find that perfect spot of simplicity and genuine reward.
If you’re a business that relies on repeat custom, you need an easy loyalty solution and one that isn’t going to drive away your customers, and you need to make sure you’re satiating the needs of everyone. In practice, not everyone wants loyalty in the same way; this means that you need to ensure that you’re covering both an app and a loyalty card – and even paper vouchers in some instances.
And there’s no use overcomplicating a points-based system, either. It’s not just about simplicity, but simplicity through choice; after all, it’s what you can do with the points that matters. Offer a discount or promotion at your own store. Allow the customer to donate to a choice of charities in the area. Work with other community stores and business owners to increase loyalty in the region.
Personalising your offering
If you do decide to offer promotions and discounts at your own store, make sure that the rewards you are offering the customer are tailored and personalised to that customer. Using the latest loyalty solutions that can take your data, enhance it and give you a complete customer view are essential for bringing the customer back to the store.
It’s about being clever with the data you have. If a customer is going into your coffee chain Mondays, Wednesday and Fridays generally, why not offer a personalised discount on the Tuesday and the Thursday too, specific to that customer? These days, consumers want the VIP treatment and to be part of the ‘membership economy’ – and you can do that through tailored schemes that cut through.
In this age of wavering customer loyalty, you need to deploy a loyalty scheme that is honest, personalised and simple. But these concepts are not mutually exclusive when we’re talking about loyalty in 2018.
Put your customer first so your competitor won’t have to.
With the introduction of the Insurance Act 2015, everything changed, and one year ahead of its implementation, Tanmaya Varma, Global Head of Industry Solutions at SugarCRM, tells Finance Monthly about the impact it’s had on the market, its insurers and customers.
It’s no secret that the insurance industry is one of the most cut throat when it comes to customer loyalty. With competitive rates available at the click of a button on price comparison websites, customers have the freedom to pick and choose their providers with minimal effort, from the comfort of their homes. The abundance of insurance companies in the market means they are on a constant uphill struggle to provide not only a competitive price, but a customer experience that sets them apart from the rest. With Gartner estimating that 89% of organisations now compete solely on this, this is the new benchmark of success for insurers.
In a competitive market, retaining that loyal ‘golden customer’ is challenging. Insurers need to show they are evolving to meet the needs of modern customers, and are not just companies who do little more than churn out cheap holiday or housing cover. Research from The Institute of Customer Service revealed an increase in customer satisfaction from July - December 2016 compared to the six months before it, with a number of insurers listed in the Top 50 organisations for customer satisfaction, such as LV and Aviva. Despite this, the sector still experienced a 9.9 point drop in Net Promoter Score, a figure which summarises the overall neglect and disconnect between insurers and their customers.
So what are insurers already doing to address this, and what more can they do to improve customer loyalty?
Changing laws
It’s clear that how insurers treat their customers is being monitored at the highest level. Prior to 2016, the insurance industry had been left to stagnate. In a sense, it was an industry complacent with its low retention rates and poor customer service. This changed last year with the introduction of the Insurance Act 2015 which set a new precedent – with BIBA marking it the “the biggest change in insurance laws in 100 years.”
The introduction of the Insurance Act promised to deliver greater transparency between companies and consumers. In an industry notorious for false claims, well-hidden small print and poor customer service, the shift was a much needed one. With this new act underway, it’s now more essential than ever that insurers have access to up-to-date data.
Providers were also instructed to improve communications across all channels to ensure clarity at all points in the customer journey. There is also an onus on customers to ensure they’re providing the correct information, and understand the policies they are signing up to.
Turning to technology
The right technology is of paramount importance to any customer-facing business. Insurers must harness tech to empower employees to work more efficiently. One way this can be done is through customer relationship software systems, which allow customer data to be collected, stored and managed to deliver a 360-degree view of the customer.
By giving employees everything they need at the press of a button, this can help alleviate lengthy, confusing calls and improve the customer experience. An easily-accessible system can deliver increased efficiency, better communication and happier customers. If we consider that in a survey conducted by Realwire 68% of questions asked digitally are inaccurately answered, it’s essential that insurers become more digitally focused and capable.
Some insurers are already adopting a digitally forward stance. The insurer Lemonade, for example, developed a virtual assistant at the start of 2017 called Jim who is able to process insurance claims in seconds. This virtual assistant reflects the advancements of AI and how some insurers recognise the power of tech. Realwire’s study concludes that with 91% of consumers saying good digital customer service from insurers makes them more loyal, it’s essential that insurers can deliver this.
The importance of the human touch
The benefits, and potential, of technology as part of the customer experience are endless, but have their limitations. Yes, there have been significant advancements in Artificial Intelligence (AI), and the rise of the chatbot is a forever trending topic. But despite a continued integration of AI in to customer service, research by Vanson Bourne concludes that 91% of respondents still preferred to contact a real person.
AI is great in automating mundane tasks, and taking care of repetitive jobs where humans don’t add value. But, so far, a robot can’t empathise with a distraught traveller half way across the world who wants to check the small print of their holiday insurance policy. That’s something that only a human can do at present. This is proven further through SugarCRM and Flamingo’s research, that found that three quarters of people surveyed still aren’t happy with talking to chatbots – a figure which clearly translates across all industries.
The future of the customer experience
Machines are great at automating repetitive tasks, and chatbots are undoubtedly becoming more sophisticated – and at a growing rate. But the real benefits of technology appear when it aids and empowers employees, and helps customers be autonomous in self-service functions where the human touch isn’t needed.
For an industry that, according to Realwire, saw a 47% decline in performance in 2016, it’s essential that insurers act quickly to evaluate the customer experience they offer at every touchpoint. The insurance industry has generally been slow to adopt a better digital approach, but, when customer dissatisfaction is often rife, it could be the difference between keeping or losing a customer.
Bhupender Singh, CEO of Intelenet® Global Services, explores the competitive challenges that banks face from FinTech players.
The finance and banking sectors have experienced a radical shift, driven by mobile technology, Artificial Intelligence (AI), automation, and the emergence of new FinTech players entering the market. Traditional banks are now facing the challenge of high customer expectations, outdated technology, the pressure of regulation stemming from the financial crisis, and cultural resistance from those who are apprehensive or unable to utilise digital services.
With high street bank branches closing down, elderly people and those who do their banking in person, are at risk of making costly financial mistakes. In addition, a high proportion of customers maintain the desire for face-to-face interaction, particularly in the case of making major financial decisions, such as applying for a mortgage. Even in the case of common customer needs, such as the need to discuss overdrafts or the replacement of a bank card, face-to-face interaction is better equipped than a machine to efficiently handle the process from start to finish.
A major bank reported that 90% of customer contacts were through digital channels in 2016, an increase of 10% from the previous year. It is this shift in consumer behaviour that can be attributed to the increasing number of bank branches closing.[1] In order to ensure customer satisfaction, banks will need to keep up to date with the latest technological advances, whilst also maintaining and providing new channels of communication to ensure that their customers are kept happy.
With the number of FinTech players and challenger banks slowly increasing, the need for banks to ensure their customers remain loyal has never been more important. Whilst the new breed of banks provide a mostly digital banking experience that can offer features such as real-time balance information, deep-dive spending data, biometric security, and instantaneous money transfers, the issue of trust still remains. Customers like to know that they can speak to another person when they need more information about a product or require help fixing a concern. In today’s automated economy, modern companies are conducting more and more business online, and so it has become increasingly important to not underestimate the importance of having a ‘face’ for your business. Relationships are built by people and based on these interactions and the level of customer service, customers will be more inclined to return.
Despite having the upper hand, in terms of a well-established customer base, the scale and speed of the digital revolution has left major players in the financial services sector struggling to keep up. Challenger banks actively seek to be different, and so to even the playing field, traditional banks must embrace technology innovations and employ next-generation tools. The technological revolution in finance is not a new phenomenon, yet, embracing this new landscape remains a challenge for most established financial institutions. Recent PwC research found that only 20% of finance executives feel their organisation is structurally ready to embrace a digital future[2].
In order to compete, traditional banks need to start offering a seamless blend of online and in-person banking which complement traditional services. An effective omnichannel experience is one that will allow customers to benefit from the advantages of a physical bank branch, with the speed and agility available through a digital offering. Next-generation technology is heading in a direction where it will be possible to combine both the full benefits of online banking and face-to-face customer services. The future of branch banking, as we see it, could result in banks moving towards a mobile branch model.
One option could be a mobile advisor workforce, where customers can manage their services through a mobile app, and maximise the effectiveness of customer facing staff. By implementing this, banks could allocate mobile teams to nearby appointments. The next-generation technology available also has the potential to enable banks to connect roaming advisers to nearby customers, at any location and at any time.
One of the main advantages of a technology such as this, is that the high proportion of customers that prefer face-to-face interaction, will still be able to interact with banking staff – a service that banks are currently able to provide via the use of ‘micro-branches’. With market pressures to cut costs, and many providers being forced to reduce their front-end outlay, tools that allow banking staff to be mobile, are a step closer to modernising banks.
In the face of mounting competition against new players that are able to implement technological innovations quickly and effectively, it is essential for banks to overhaul their existing IT systems. Well established financial institutions tend to operate using outdated technology. These legacy technology stacks make it extremely challenging for them to compete with their more nimble competitors, as the aging technology obstructs the movement of data between silos, preventing the 360-degree view of the customer that is required to provide personalised services to customers anytime, anywhere. For this reason, we are witnessing a real desire from companies to work with experienced IT solutions partners, in order to adopt the latest technology and modernise their information security frameworks.
Legacy systems are one of the biggest barriers in keeping banks from imitating the digital experiences provided by the likes of the latest FinTech players. These companies deliver personalised services faster than banks can and are not hindered by aging systems. In order to start levelling the playing field, banks must first invest in the right partnerships. Banks must then look to provide a far more seamless omnichannel approach that embraces new technologies and will bridge the gap between their brick and mortar operations and their digital offerings.
