loyalty marketing

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One of the 24 Questions I use in my deep dive brand planning rigor is “How much company revenue comes from existing or repeat customers?” When I compare this figure with lost customer and new customer revenue I get a sense of a company’s loyalty, loss and business development focus.

If you look at marketing job boards today you will notice a great deal of acquisition activity.  The majority of marketers are absolutely smitten by new customers; it’s akin to generals in battle who need to take new territory. Loyalty marketers, on the other hand, know it is the back door, the door customers leave by, that is most critical. 

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Loyalty is engendered when customers are not overlooked. Everyone knows a broken family where mommy or daddy found s new partner because back at home they felt underappreciated. This behavior not only breaks up families, it drives wedges between parents and children. Loyalty, love, under-appreciation and inquisitiveness are human traits. Marketers try to build love through the AIDA principle: Awareness, Interest, Desire and Action, often forgetting Loyalty until it’s too late. Until the back door has been open too long.

Coupons (sorry honey flowers), shallow thank yous, and automated responses do not loyalty make. Understanding yourself and your customers through a well-principled brand plan, is the place to start. Otherwise, it’s off to the loyalty store for some quick fix tactics.  Peace.

 

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Why are we loyal?  And when we begin to understand loyalty, how do we foster and strengthen it?  Moreover, how do we build loyalty from the ground up?

One of the reason I got into brand planning was the realization that a poor Appalachian dirt farmer with nary a pot to pizzle in will spend his hard earned cash on a premium brand of motor oil.  Did his daddy suggest it’s the only oil to use?  Did his favorite NASCAR driver sing its praises on ESPN?  Was it promoted in the window of the store he bought soda pop in as a kid?

Here’s another question: Why do most college kids, after only 4 years, retain a level of loyalty toward their school not reserved for jobs, the towns they grew up in, or even a 20 year marriage?    

These questions need to be analyzed, understood and acted upon. Consumers don’t become loyal to ads, direct marketing, PR or promotion.  They may become loyal to a website, because websites are brand experiences or brand distribution channels (read Amazon, Zappos, Gawker), but loyalty to a message un uh. Bad marketing agents will tell you otherwise, but don’t listen — that’s not how you build long-term market share.  Loyalty comes from other places. Trust. Consistency. Aspiration. Community. Pride. 

At the end of every day, marketers need to leave the building asking themselves “What did I do today to strengthen brand loyalty?” If they don’t have an answer, they are losing ground. Peace!

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Here’s the thing about loyalty: Humans desire it but, frankly, are hard-pressed to embrace it. (Why else would one in two U.S. marriages end in divorce?) Brands seek loyalty because it keeps their marketing expenses down. Experts remind us we need to “delight” customers to engender loyalty, meaning don’t take them for granted, treat them better than family and provide unexpected, thoughtful product gestures. 

 

Creating incentive to remain loyal to a free Web property (part three in a series this week) may seem difficult but there’s a trick. The trick is the “brand promise.” Technology can be matched or mirrored by a competitor. Services can be matched by a competitor. But it is harder to match a promise.

 

Companies that look within, find a value that customers want and they alone can provide, can maintain an edge in loyalty.  I wrote a position paper for a free Web property entitled “Technology, service or brand?” The brand promise was future-ready and stood long after the platform morphed and evolved. More importantly, it helped provide direction to that evolution.

 

Loyalty is constantly being tested and needs to be strengthened over time. If a free online property has a good brand promise and stays loyal to that promise, that’s a huge start. 

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Incentive is one of the most powerful tools in marketing. For the first time in a while U.S. home sales are up and one of the reasons is the first time home buyer tax credit of $8,000. In marketing incentives work.

 

Incentives are mainly monetary, e.g. “free trial” or “30% off,” but what happens when the product is already free as is the case with many Web properties? 

 

The incentive has to be delivered in the rational and emotional value that accrues to the product.  It starts with the brand (first visual experience), continues on to the product itself (first user experience) and deepens with loyalty (relationship management).

 

Here’s a quick exercise relating to the first step — first visual experience. 

 

Let’s assume you’ve never heard of any of the following video sharing sites and your first visual experience isthe home page. Read these taglines/about statements and decide which provides the strongest incentive to try:

 

YouTube — “Broadcast yourself.” 

Vimeo  — “People connecting through video”

Revver  — “Video sharing powered by advertising”

Blit.Tv  — “Independent web shows”

CastTV  — “One stop watching.”

 

Stay tuned for steps two and three. Peace!

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