Long gone are the days where excellence and efficiency in the workplace and workshops were what defined how a business would perform. From the era of the GEs and the Toyotas who dominated the market with operational excellence and good value, there remain some artifacts who wish to still implement the same old strategies of manufacturing excellence rather than customer-centricity and lose in this race. Today, as we approach new ways of running businesses, several trends and themes have come up. From embracing the digital landscape to rewarding entrepreneurship in the workplace, one could argue that loyalty-building is what sets companies apart from each other.
Puts the customer at the core:
Customer loyalty is not a new term or a new concept. It has in fact been in practice for long. Customer loyalty has been a part of the norm for at least the last two decades and marked a change in the way businesses work and think. Customer loyalty marketing grew in importance mostly during the early 2000s where uncertainty was rife and people's spending had taken a hit. This marked the end of the days where companies would make grand marketing plans and then adjust their customer base to work with what they had prepared. The change that was embraced was, instead, a more personalized experience to match and exceed the expectations of a customer so as to transform their one-time experiences into loyalty.
Rewards employees who understand the importance of loyalty:
Although the concept of customer loyalty, as the name suggests, is for the customer, employees have reaped great benefits from it too. The different activities an employee performs for helping to curate a better experience for a customer are handsomely compensated for by most businesses. Hotels have started providing day-to-day budgets for the activities of the employee to ensure that the customers' needs and satisfaction are always kept at the forefront and that they'll be compensated and rewarded for any spending that they undertake for a customer. These activities not only help build one's loyalty but also contribute towards the branding of a company as one that cares for its employees and customers. Taking the example of Harrah's, a chain known best for its casinos. Their employees engaged in activities like valets remembering which car belonged to whom and greeting them in a way they liked. This continued to the slot machine areas with employees going up to customers to ensure that they were enjoying their time at the casino. In 2002, Harrah's casinos paid $14.2 million to their employees as rewards for great service.
Loyalty-building as a process:
The employees at most establishments like hotels, restaurants, or shops could add value for customers at every little step. For example, a floor worker at a local grocery store would remember the names of the aged repeat customers and help them with the smallest of things by carrying their carts around or handing them a trolley, or even accompanying them through the store while making wholesome small-talk. This provided not only a touch of personalization but also an all-around experience for the shopper that took the activity of shopping from a boring chore to something they'd want to do, thus increasing their feeling of loyalty at the establishment.
Physical evidence:
Since a customer's experience is after all just something they experience, the provision of proof that they received something is always valued. Rewards including lucky draws and free goodies are not uniform enough for customers and often lead to some disgruntled ones whose luck was not that good. To overcome this challenge, companies began the usage of reward cards and trackers that would inform a customer as well as the company how much a customer has spent, what level of reward they are due and how much they need to spend in order to gain the credits needed to go to the next levels. Such loyalty cards exist in bookstores like Crossword to retail grocery stores to your local Starbucks all the way up to 7-star hotels.
The way forward:
Everything discussed so far has helped cover the present scenario of loyalty as a legitimate part of how businesses want to drive profits. The future only helps open up more opportunities through the better understanding of these profit drivers, the better slicing and dicing of data to drive informed decision-making, and the progress of technology that allows brand new avenues to provide better loyalty-rewarding activities to customers. Although the examples so far have been limited to establishments where people go either for goods or experiences to start with, it's key to understand that customer loyalty is an applicable strategy for every business.
Loyalty may be seen as a fancy term used by businesses just to increase the customer's feeling of belongingness. That isn't the reality but it also isn't false. The reason why businesses wish to increase the feeling of customer loyalty is that the bottom line is profit. And the best way to increase this profit is by increasing the lifetime value of customers. That said, businesses do try their best to make the customer feel like they belong so that they can provide increased value to these customers in exchange for the money paid by them. This was Alliteration Articulation, over and out!
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