5 Cs of Loyalty
Here is a brief summary of the key ideas discussed so far:
- Every category has some “Best Customers” – who have higher spending power than others, and therefore are more profitable than others
- Identifying, acquiring and retaining these customers is critical for a business
- These category-wide Best Customers can be instrumental in helping businesses build a profits flywheel
- A standard loyalty-and-rewards program is not going to be enough for retaining such customers
- What these customers need is something special – a differentiated experience
- This is where Velvet Rope Marketing (VRM) comes in – by using tech and human-assistance to roll out the red carpet by offering exclusivity, ease and access
VRM is the secret sauce to ensuring customer loyalty and higher profits. Using CLV, it becomes possible to identify the current Best Customers for a business. Decoding the customer genome of the Best Customers offers the attributes to ensure more targeted new customer acquisition. This is the cycle that every business needs to drive.
And yet, the surprise is that few do it. Most think that rolling out a loyalty program is good enough to ensure that they will attract the best customers in the category and retain them. Nothing could be further than the experienced reality.
So, let’s now look ahead. How can VRM anchor the transformation of customer loyalty and loyalty programmes? There are 5 key ideas that we need to discuss:
- Committing to a CDP: all customer data needs to be collected into a single customer data platform
- Calculating CLV right: the right analytical models are needed to predict CLV to serve as the base for customer segmentation and experience differentiation
- Crafting the Customer Experience: marketing creativity and technology platforms need to come together to create a magical experience for the Best Customers so they maximise their category spending with the brand
- Creating a Continuous Learning system: use AI-ML (Artificial Intelligence and Machine Learning) to become better each day with the new data that streams in so changing customer behaviour and purchase patterns can be identified early
- CEO prioritisation: none of this will happen without a clear vision and roadmap from the leader at the top – and a recognition that VRM-powered loyalty is not just a marketing program but the most important business imperative
We will discuss each of these 5 Cs in turn – CDP, CLV, CX (customer experience), CL (continuous learning) and CEO.
Tomorrow: Part 10
