Organic vs. Deliberate: 2 Different Ways To Drive Customer Loyalty
This past summer, CCW Digital explored customer loyalty in a complimentary Special Report. The report covered many topics, from specific tactics for increasing loyalty to steps for creating a "loyalty culture" within the contact center.
One focus area was the notion of "loyalty drivers." Specifically, the report identified two fundamental ways to cultivate customer loyalty: the organic approach and the deliberate approach.
Highlights are below:
There is one thing the customer management community knows all too well: mindset alone does not drive results.
In order to achieve its objectives, an organization must take the correct actions. It must walk the talk.
Indeed, customer loyalty will not grow simply because an organization decides it cares about loyalty. The organization must work actively and deliberately to secure customer loyalty.
This process begins with an investigation into the behaviors that foster customer loyalty. What drives the customer to become committed to the brand rather than content with the interaction?
At the highest level, there are two key mechanisms through which an organization can cultivate loyalty. The best businesses will apply both approaches.
The organic approach
Customers gravitate toward brands that consistently – and continuously – provide great experiences.
The organic approach to customer loyalty is predicated on that reality.
Instead of focusing on one-off loyalty “initiatives,” the organic approach involves constantly working to elevate the overall customer experience journey. It involves thinking about – and optimizing – all the touch points at which customers directly or indirectly engage with the brand.
Yes, this involves improving interactions. It involves working to create fast, effortless, friendly, resolute interactions. The scope, however, is much bigger.
It is not enough for interactions to be great in a transactional sense – that, after all, is the pathway to satisfaction rather than loyalty. They must also be consistently stellar throughout the customer life cycle. They should adapt based on issue context. They should be increasingly tailored to the specific personality, profile and preferences of each customer.
They should also involve some steady “wow” factors – special, unique qualities that become the hallmark of the brand’s interactions.
How can we make our value proposition different – from a guest experience standpoint and a servicing standpoint?”
The experiences will not be utterly perfect, but in the event something goes wrong, the organization must consistently deliver a perfect recovery. Rather than letting a problem fester (or get worse), the organization must accept accountability for the problem – and demonstrate a fervor for finding a solution.
When an organization achieves these tenets, it demands the extent to which it values its customers – not simply as “buyers” who deserve great experiences but as individual customers who warrant personalized ones.
That sense of appreciation, as well as the expectation of a great, effortless experience in all touch points, makes customers want to engage with the organization down the road. It makes them enthusiastic about the relationship they have with the brand.
It makes them loyal.
The beauty of the organic approach is that its value is inherent and meaningful. Customers care greatly about the experiences they receive from brands; over 50% will pay more for a great experience, while 62% will switch to competitors after just 2 bad experiences. The aforementioned tenets speak directly to the factors about which they care.
An organic emphasis on customer relationships, moreover, allows for valuable evolution and improvement moving forward. By encouraging customers to engage frequently and then getting to know them while they do so, the organization can better identify the customer’s unique preferences and pain points. Using this information, the business can create better future experiences and thus drive even more loyalty.
The downside, however, is that the value is neither overt nor promissory. A customer may hear great things about a brand’s experience, but he or she will not truly understand the value – and thus the incentive to become loyal – until actually engaging with the organization.
The phrase “be loyal to us and you’ll receive a great customer experience” conveys less immediate value than “book 5 nights with our hotel, post about us on Facebook, and we’ll give you free tickets to Disneyworld.”
The deliberate approach
Does a customer have an incentive – beyond the expectation of great interactions – for becoming loyal?
If an organization can answer that question in the affirmative, it understands the deliberate approach to customer loyalty.
Whereas the organic approach involves earning the customer’s loyalty through consistently great behavior, the deliberate approach is more akin to buying loyalty. It involves assigning tangible value to a customer’s support for the brand.
By providing customers with special perks and offers in exchange for their loyalty, “rewards programs” embody the deliberate approach.
Because the value is more immediate and more definitive, the deliberate method makes for an easier sell to customers. The business neither has to prove itself over time nor inspire faith that a customer’s loyalty will be worthwhile. It is explicitly telling the customer what he or she will receive in exchange for loyalty. The customer can thus make a fully conscious, more confident decision about whether or not to pledge support (and dollars) to the brand.
On the other hand, the deliberate approach yields a less permanent, less defensible form of loyalty.
For starters, the organization is arguably building loyalty to the offer rather than to the brand. If the business were to remove or change the offer, it would risk the “loyalty” it had supposedly amassed.
A competitor, moreover, could steal some of these supposedly loyal customers by presenting a better offer.
The deliberate approach also requires a greater degree of precision. Whereas the elements that yield organic loyalty speak to universal customer demands – great customer service interactions, personalized engagement, proactive support – deliberate “offers” must speak to what specific customers want at a specific point in time.
If an organization guesses wrong (by offering the wrong “comps” to certain casino players, as an example), it will not cultivate the desired degree of loyalty.
The optimal balance
The organic and deliberate approaches both have advantages and disadvantages. The former is more reliable, permanent and defensible over time, but the latter is more immediately attractive and resonant.
The logical play, therefore, is to employ both approaches.
Organizations should use deliberate initiatives to encourage loyalty. “Buy” repeat business – and future engagements – from customers.
Then, when interacting with customers, provide a great experience that will “earn” a more meaningful, lasting degree of loyalty moving forward.
While doing so, learn how to make things better for customers. Analyze the way customers react and behave in response to deliberate offers and then ensure the experience is equipped to accommodate them.
Similarly, identify which parts of the experience journey are weaker than others, and then consider using deliberate programs to overcome the challenges.