How Customer Intelligence Drives Loyalty
April 27, 2012
Listening to—and acting on—consumer comments is the best strategy.
Chances are your brand incorporates a rewards program into your customer loyalty initiatives. With the average person having 14 loyalty cards in her wallet, it stands to reason that rewards are an effective way to retain customers.
Unfortunately, customers are telling us the opposite. A recent survey by PriceWaterhouse Coopers found that only 1 percent of those surveyed ranked rewards programs alone as the top influencer of purchase.
While a customer retention strategy should contain a rewards program, brand experience is identified as the most critical driver of customer loyalty. As Walt Disney once said, "Do what you do so well they want to come back and bring their friends."
When companies deliver a distinctive experience, their customers will come back, increase their spending, and more than ever before—through social media—recommend. In fact, a recent poll by Loyalty 360—The Loyalty Marketers Association found that 78 percent of customers believe that having a great customer experience creates long-standing, loyal relationships. The Customer Experience Impact Report concurs, revealing that a better customer experience is so important to consumers that a full 86 percent are even willing to pay more for it.
So, how do you create the brand-defining experience that will engage customers and earn their loyalty? The answer to this question is found in online conversations about your brand.
The flood of online commentary can seem overwhelming. But marketers need to realize that when it comes to understanding how to deliver a brand-defining customer experience, online conversations are the most robust source of insight. It is essentially the next generation of a focus group. The unstructured, unsolicited real-time feedback gives brands the most comprehensive understanding of the customer experience they are delivering. The negative themes point out areas in need of change and improvement; positive comments highlight what customers appreciate most.
There is no better place to learn how best to execute changes than from online guest feedback. Since people share this information willingly, their feedback typically goes beyond a simple "like" or "star rating" and offers deeper insight into the aspects of their experience that are most important to them and to their overall satisfaction with a brand. By understanding the commentary, marketers get a closer look at the most impactful experience drivers. For instance, take a look at these excerpts from online commentary about hotels:
I loved my stay at this hotel. First of all, it is very dog friendly—I think my dogs had a better time than I did.
The XXX Hotel is a first-class experience from the moment you enter the front door. The sweet smell of burning wood from the huge fireplace in the sitting room and the complimentary champagne on check-in is just a sample of the wonderfulness of this experience.
If it's the bright lights and Broadway shows that bring you to the Big Apple, nothing beats this hotel in terms of location. As they say, location is everything and this hotel is in the thick of it.
The moment we pulled up out front, we were greeted by two very friendly bellmen. We then were helped inside, and the kindness just continued throughout our stay.
These examples show the richness of information online customer feedback provides. Only from the details can marketers realize the true drivers of a customer's satisfaction.
While successful brands embrace this type of positive feedback, they also realize the value offered in the not-so-great reviews. Clearly, through negative feedback, specifics can be learned about areas in need of improvement and opportunities to attract more business and improve reputation.
Leveraging the data to enrich brand interactions
While many brands have access to an abundance of critical customer data, most are not leveraging it to their best advantage. In fact, according to a Forrester Research report, The Intelligent Approach to Customer Intelligence (October 2009), the majority of firms still struggle to fully understand their customers and leverage their customer data as a strategic asset.
Gleaning the intelligence inherent in the data affords brands early detection of trends in customer behavior and attitudes. This robust insight, in turn, helps brands avoid problems before they occur, capitalize on new opportunities, and, ultimately, enhance the customer experience at each interaction and touch point.
For example, as the name implies, "Sweet Heat," one of the signature cocktails of the Crave America restaurants, is made to deliver a kick. Made with Bacardi Dragon Berry, mango, jalapeno, St. Germain, and white cranberry, it is a spicy and popular drink. But using a feedback-first approach facilitated by newBrandAnalytics, Crave uncovered a pattern of comments and complaints from customers who found the drink too spicy. Having tracked mentions at multiple restaurant locations, management started thinking they had a problem with the recipe or ingredients. The issue, they learned, was that because the potency of jalapeno varied considerably from one batch to the next, following a standard recipe for the drink was a mistake. Crave quickly addressed the issue by letting the bartenders use their discretion to season the drink to taste. Since the adjustment, Crave has enjoyed consistent value and feedback for the specific item.
Uptown Cafeteria also garnered valuable customer experience insight from online feedback. The restaurant performed very well during its opening months, and the Internet buzzed with positive feedback. But around the start of the winter season, management noticed that its excellent performance ratings were slipping. At first, they thought it was just the changing of the seasons that was triggering the shift in customer attitude, as one of Uptown's key assets was its rooftop patio. But drilling deeper into the customer commentary, they realized that it was a dramatic downturn in service—not the changing temperatures—that was leading to customer dissatisfaction. The management learned that the staff was upset because their hours were being cut during the winter months and, as a result, were less enthusiastic in their service efforts. Management revised their schedules, and within a few months, customer feedback showed a dramatic rebound.
These examples show how converting the social media "feedback fire hose" into a well organized, actionable database of information can help marketers enhance the type of experience that engages customers and earns their long-term loyalty. Here are a few pointers to help you move successfully along the path toward customer intelligence:
- Look past the star ratings. Albeit measurable, an average star rating does not provide you with concrete insight. Go one step further and review the written comments for feedback upon which you can improve.
- Look for themes. Polarized feedback has a way of quickly spreading inside an organization. When you come across a mention, take it in context with a few other reviews.
- Use a mention online as a training opportunity. Just as you would share a customer's in-person feedback with your staff, do the same with an online mention. Identify what, if any, opportunities exist to better execute your brand's standards.