What is Brand Loyalty and How Can Companies Build it?
By Sabrina DorronsoroJul 1
Identify opportunities to improve your DCI maturity
Published October 13th 2016
We live in the age of the customer. For the consumer, this means an abundance of information and choice. For brands, delivering a better customer experience is increasingly the decisive factor in standing out.
Gartner Group says that 89 percent of business leaders expect the customer experience to be the primary differentiator. Improving this experience requires listening to the voice of the customer to understand what it is the customer actually wants.
Voice of the customer (VOC) describes the process of capturing your customers’ pain points, frustrations, desires, and hopes. It is a method of market research that identifies changes that can be made to the brand to benefit the customer.
Using a mixture of qualitative and quantitative methods, voice of the customer should produce a set of prioritized needs that, when implemented, will improve the customer experience.
The ‘age of the customer’ revolution has been brought about largely by technology that has spread in the last decade or so.
Mobile phones, high-speed wireless internet, review sites, social networks, search engines, mobile payments, ad blockers. All have contributed to giving more weight to the voice of the customer.
Customers can access almost unlimited information about brands, products, and services over the internet at any time on their decision journey.
This can happen from the initial research point right up to the physical point of sale. People can, and do, share positive and negative experiences online, and the influence we have over each other in this connected world is well documented.
It’s called the age of the customer because, at first, it appears businesses have lost control of their communication, and that the balance of power has shifted in favor of customers.
It is undoubtedly true that customers are better informed. For the majority of people, making a purchase without first checking reviews and prices online is unthinkable. Consumers also know they are in a stronger position and are demanding more because of it.
This is both a threat and an opportunity for brands. Forward thinking, agile brands will see the opportunity and benefit: the very data and information that empowers the customer can also be used to bring the voice of the customer into the heart of the business and understand how to offer the value and experience that customers crave.
This is vital. With the amount of choice available, customers are not just looking for great products or features. They don’t care about gimmicks. Instead, they are looking for a satisfying and holistic customer experience.
Listening to the voice of the customer is essential for understanding what the customer wants and standing out from the competition.
The voice of the customer will surface needs, desires, and frustrations. These will reflect the experience currently being offered and provide the blueprint for improving that customer experience.
To get that feedback, you can look at a variety of data sources. There are traditional methods of talking directly to your customers. These are valuable, but tend to be more expensive and time-consuming.
Gathering feedback directly from customers, whether face to face or through surveys, can directly surface insights. Webinars or trials can reveal questions and ideas about the product.
Newer forms of data can make feedback collection quicker, larger scale, and allow ongoing feedback.
Important insights can be inferred from any data or analytics that reveal customer behavior. It’s should be used in conjunction with other data sources.
Social intelligence can collect the voice of the customer, using their own words, at scale. If you collect a mention stating a wish for a new product feature, that mention doesn’t exist in isolation. It is attached to a person with demographic, geographic and psychographic data, as well as a history of other mentions.
Developing a robust social media research methodology can surface insights by listening to huge numbers of organic conversations, and splitting consumers into different audience segments.
Starbucks has adapted and thrived in the age of the customer by listening to its customers and understanding what consumers want from their coffee merchants.
Starbucks introduced free wifi before other cafes. They innovated in mobile payments, becoming one of the first to trial it. And now, their mobile app (currently US only) is an unqualified success. It has streamlined the payments system and added a loyalty program – something that commentators in other countries have been crying out for.
It even adds to improving the ‘third place‘ experience of a cafe, by partnering with Spotify to allow influence over in-store playlists.
Loyalty stars can also be earned through the music service, and by taking a Lyft. For me, it’s no coincidence these partnerships are with brands that are standard bearers in the age of the customer.
Starbucks understood that people are willing to give a little if they get something in return. In this case, exchanging some personal details for the convenience of a seamless service and the savings available. If it’s done in the right way, people are willing to have a relationship with a brand, so long as the benefits flow both ways.
Starbucks improve the in-store experience for customers. In return, it gets increased sales and improved loyalty. 22% of Starbucks’ customers now pay using the app, which has helped generate a 12% rise in revenue. The added bonus for Starbucks is they collect valuable customer behavior information to aid further improvements.
While Starbucks has listened to its customers to understand what they want, they have crucially created a culture where these changes can be implemented.
The final and most important factor in bringing the voice of the customer into your business: it’s not enough to simply listen. Changes need to be made to the philosophy and structure of the business. Consumer insights need to be systematically incorporated into decision-making processes. You have to convert insight to action.
It might sound like a difficult change to implement, but becoming customer centric turns the threats into opportunities. Using social intelligence to uncover insights across the business can transform a brand.
These insights can be used for product development, increased marketing ROI, decrease customer service costs will increase customer retention rate and Net Promotor Score.
Ultimately, this means a better customer experience, a better understanding of consumers, happier customers and increased revenue.