Here is what the latest Forrester reports says on loyalty schemes
I just read a piece by marketing week that discusses the key findings of the latest Forrester report on customer loyalty schemes. Here are the key points that speak to me:
- “The problem is that many brands fail to set long-term objectives for their schemes and are too focused on immediate sales and customer acquisition. Instead they need to look beyond tactical activity and study what is driving customer value.”
- There is little differentiation, poor communication and promotional support, while many programmes are not integrated with the sales cycle or in sync with branding;
- There are also problems with measuring results and targeting the same consumers too often;
- The drive for loyalty should fuel a brand’s entire marketing strategy; and
- Loyalty must be earned and is usually the result of a series of compelling brand experiences which the consumer enjoys over time.
This got me thinking why so many marketing heavy organisations fail to embody customer focussed behaviour. Is it possible that over the last ten years these organisations, or their marketing functions, have learned little? Or is it that these organisations and their marketers confuse a marketing focus with a customer focus?
Here is brief reminder of the characteristics of a marketing focussed organisation v a customer-focussed one.
Characteristics of a marketing focussed organisation?
I had the good fortune to work within a marketing focussed organisation (International Distillers & Vintners) some years ago and since then I have done some consulting to such organisations. Here are the key characteristics that I have distinguished:
- There tends to be strong belief that the organisation can prevail through bigger marketing budgets and smarter marketing despite any shortcomings in the product, distribution channels and customer relationships;
- tendency to assume that they are in tune with customer needs and priorities yet when you dig under the surface what you find is that the ‘research’ is deeply flawed and in effect leads the ‘witness’ to provide the answers the marketers want – even if this is at a subconscious level;
- tendency to collapse marketing campaign success with success in cultivating customer relationships, customer value and customer loyalty. In doing this they ignore the impact on the 80+% of customers that did not respond to the campaign because they did not find it relevant.
- tendency to be blind to the totality of the customers experience with the organisation e.g. across business divisions, product lines, interaction channels and during the after-sales part of the customer journey;
- the marketing function has little interest and/or power to shape and influence the customer experience across all the interaction channels and touchpoints. And no-one else is doing that either.
Characteristics of a customer focussed organisation
There are a lot less customer-focussed organisations yet there are enough of them to distinguish some of their defining characteristics. Here are the ones that are key for me:
- There is clarity on which types of customers the organisation is best placed to serve well and effort is made to select only those customers to ensure fit and minimise disappointment on the customer side and ‘waste’ in the organisation in terms of returns, disputes, complaints, bad press etc;
- The business model is centred on retaining customers, cultivating customer loyalty and getting a bigger share of the customer spend;
- The leaders personally identify and embody the customer-focussed philosophy and this is obvious to the people the work within the organisation and to the customers;
- The senior management devote considerable organisational resources (including their time) to uncovering customer needs, segmenting customers by their needs and then coming up with and delivering propositions that create superior value for these customer segments on an ongoing basis;
- A way of speaking and doing things that puts the customer and cultivating customer relationships at the heart of the business;
- Hiring managers who have an affinity for people and can inspire the best of their employees by providing the employees an environment in which they feel appreciated, supported and rewarded for doing things that make the right impressions on customers;
- An organisational design that recognises the need to structure around customer segments as much as product families and functional silos; and
- Technology platform that enables the employees to anticipate and respond quickly and correctly to customer needs.
Making the transition from marketing focussed to customer focussed
When you look at the characteristics how do you feel about making the transition from marketing focussed to customer focussed. Do you wonder if you can pull it off? Does it occur as being hard, messy, painful and risky? It is. For existing organisations it requires transformation as in the caterpillar into the butterfly. And that is why it is easier to pretend you are customer focussed whilst actually being marketing focussed! Which in turn leaves the field open to leaders that ‘Feel the fear and do it anyway.”
What do you think?