Loyalty by design
As in any recession, competition amongst retailers and brands has hotted up. Paul Skeldon investigates how mobile is keeping customers coming back repeatedly.
Loyalty has always been an issue that retailers and brands have wrestled with, but in a growing digital and omni-channel world, it is taking on new importance.
And the ante has been upped, as consumers themselves are becoming increasingly less loyal. According to a study out in June by eDigitalResearch, there are currently low levels of customer loyalty across all major consumer- facing UK industries, despite a number of loyalty schemes that currently exist on the British high street.
The research suggests that supermarkets currently have some of the highest levels of customer loyalty, with just over half (55%) of respondents saying that they feel loyal towards a brand in a grocery sector. Clothing comes in second at 43%, but banking, gadgets, holidays, white goods, media and utilities all come in at or under 25% loyalty. Petrol suppliers hit just 10% loyalty.
Derek Eccleston, Commercial Director at eDigitalResearch, explains:“Loyalty schemes have been a big success for retailers, restaurants and other consumer facing industries in the past several years.They give customers the best deal by encouraging them to visit a brand over and over again and were quickly adopted by consumers as they shopped around for the best deal. However, price isn’t always the key differentiator between brands these days.With profit margins being continually squeezed and retailers promising to price match, the overall customer experience has become even more important.With levels of loyalty across UK industries so low, building a good relationship with your entire customer base is essential and providing a consistent customer experience is key to that”.
ACCESSIBLE & CONSISTENT
And this is where mobile technology comes in, believes Adam Levene, Chief Strategy Officer at mobile technology company Grapple.“User experience is key,” he says.“If you can create a seamless, smooth, slick and sexy experience on your mobile app, then customers are going to keep coming back to use it.” Grapple has worked with hotel chain Premier Inn to revamp its app and has made it a slick, quick and good-looking service that is already driving up usage.
“I can’t give you numbers, but it has worked very well for the company,”says Levene.“It makes booking a hotel room on the fly so easy that Premier Inn is seeing a huge amount of repeat business through the app. Good design keeps people coming back as they want ease of use.”
Sandrine Desbarbieux, Director of Digital Sales and Marketing, Avis Europe agrees: “When you think about digital you have to step into the shoes of a customer to answer their needs in key areas, then you have to make that journey to booking as simple and easy as possible.The experience is technical, but you have to make it simple and clear.Accessible and consistent experience with good navigation, transparency and choice are key to getting customers to come back. If you have a terrible site and presence then people will use it once then never come back. Customers now expect good digital presence – if they don’t get it from you on the first use you will never see them again.”
But the role of apps in loyalty isn’t simply one of good design.The whole ethos around apps and what can be done around apps is inherently good for brand loyalty, believes Levene.
“Apps, due to the fact that people have to go find them and download them, mean that there is already inherent loyalty there already,”he says.But given that 75% of apps are downloaded, used once then forgotten, surely means that this is false hope for many retailers? “Push messaging from apps is the key,”Levene says.“Push notifications can be very good at pulling people back to apps.However,you have to make sure the drive to use the app again adds value to the consumer and is not just marketing material.”
The prime example is Notonthehighstreet, which currently lets users, when they first download the app, sign up through Facebook, so that the app can log friends’ birthdays in its Useful Gift Finder. It then sends out push notifications as those birthdays approach so that you can buy them nice presents.
All this offers a new role for retailers to also look at how they use mobile and apps to extend their existing loyalty schemes – and to some extent coupons and offers as well – to make them more convenient to the consumer. Making the loyalty part of any purchase in store or online through mobile can in itself make consumers more loyal.
B&Q offers self-service checkout customers the chance to scan what they want to buy, then scan the barcode on any offers they have on their phone and see the price drop. Likewise,Tesco Clubcard is starting to offer the same with its loyalty card on mobile so that it starts to become convenient to use mobile in-store.
Rob Graham, Head of Clubcard Rewards at Tesco explains:“Clubcard Rewards are already a really popular way for our members to spend their Clubcard tokens and the introduction of a digital option gives our members more choice and flexibility to use their Clubcard Rewards whenever they want.”
The nascent world of mobile payments also offers some degree of loyalty,since combining it with a loyalty card and vouchers all in one place offers something extremely convenient for consumers.
“Mobile payments will never replace the convenience of cash or cards, but combining payment, coupons and a loyalty card into one simple offering that works seamlessly at the checkout is a very strong proposition,” says Levene. “But you have to be clever to get people back to your app,” he warns.“And increasingly, retailers are asking for Passbook integration on iOS as a means of helping the consumer keep all their loyalty services in one place.This sort of thing will be key once it starts combining with payments and coupons.”
But don’t be fooled into thinking that loyalty can be any more easily won through mobile than any other channel – it is still a very hard trick to pull off that requires more about using multiple channels to understand and react to customers than simply giving them money off.
“Retention is very important as it costs less than acquiring new customers. But understanding who your value customers are is more critical,”says Avis’s Desbarbieux.“It is more about the value of each customer and then thinking of what is the trigger for loyalty and retention to that kind of customer. Points and discounts aren’t always the best way, but maybe things about appreciation and service are where loyalty can be fostered.
“This isn’t just a digital thing,”she says.“It’s about doing right by the customer.Some segments will be all about price and value. Some will be about service.We all have different needs and we need to understand that and group them.”