This year's "Brandz Top 100 Most Valuable US Brands" report from WPP and Kantar Millward Brown held few surprises in the upper rankings, with Apple, Google, and Amazon predictably leading the pack. However, that wasn't the report's only insight. More important was the fact that brands that are innovating the customer experience enjoy 200 percent more growth than their competitors, thanks to the resulting increase in customer loyalty.
It's important to consider what inspires customers to stick with you. Statistics show that winning new customers is at least five times more expensive than keeping the ones you already have. However, only 18 percent of companies focus their marketing efforts on enhancing relationships with their existing customers. For these few that go against the grain, the payoffs can be substantial. In online retail, for example, research suggests that 1 percent of a customer base could be generating as much as 40 percent of a company's revenue.
So if you want your customers to keep providing value for you, you might want to think about how to provide value back to them. Even something as obvious as a loyalty program can go a long way in showing customers that you care about their experience. Starbucks Rewards, for example, gives loyalty members free birthday treats, lets them order ahead via mobile, and offers free in-store refills; plus, members can save points that add up to more free stuff later. Consequently, Rewards members bring in 40 percent of sales at Starbucks stores.
A stellar mobile experience and free giveaways make a great start toward offering value, but there are plenty of other great ways to invest in your customers. And providing value and improving the customer experience don't have to mean offering free stuff; the end goal is to see a return, after all. It won't happen overnight, but these three suggestions will create valuable experiences that turn your occasional customers into loyal fans.
1. Use data to anticipate customer needs.
For years, customer service has been based on a reactive approach. When customers are upset or unsatisfied, they reach out to customer service to get their problem resolved. As a result, it's inevitable for personal interactions between the company and customer to start off on the wrong foot. There's a better way, though. Forward-thinking companies are using data to deliver what customers want and need -- before they know they need it.
By taking into account various types of CRM-housed data, including demographic, geographic, behavioral, and psychographic data, you're on the road to understanding what customers are thinking and feeling. When you know these data points and where customers are in the sales cycle, you can make decisions to increase their satisfaction before someone has a complaint.
Parse industry data, conduct a customer needs analysis, and use predictive analytics to suggest important touchpoints for your customer service teams based on where someone is in the customer journey. For example, if the analytics suggest that a customer might leave soon, send a discount offer via his or her preferred communication method to provide a reason to stay around.
2. Produce valuable content.
Another way to provide value to your customers is to create engaging content that informs and entertains them. Yet with so much free content available, many companies assume that customers don't care about high-quality content. As a result, they piece something together, send it out into the internet wilderness, and earn almost no engagement for their trouble.
Christopher Rudy, co-founder and chief strategy officer at next-gen media company Cut, explains that there are ways to develop "universally premium" direct-to-consumer content, no matter your industry. He advises identifying content gaps, carving out a unique brand voice, engaging consistently, and experimenting as much as possible to see what resonates. "Premium content is no longer dictated by a handful of companies. In this new reality, audiences are the ones defining premium content," Rudy says.
Businesses large and small are proving Rudy's point that quality content isn't just the province of media companies anymore. Take luggage startup Away, for example. The founders kicked off the brand's direct-to-consumer offerings by selling out a hardbound book, which included a coupon for a suitcase order. Since its founding three years ago, the brand has expanded its content offerings to include "Here," a print and digital quarterly travel magazine, and "Airplane Mode," a podcast for those with wanderlust. The brand already boasts high engagement and earnings.
3. Connect on an emotional level.
Customers are motivated in part by the desire to feel certain emotions, including a sense of belonging and a desire for independence. When you can connect with customers by eliciting these emotions, the results speak for themselves. Research by Motista published in the Harvard Business Review suggests that fully emotionally connected customers are 52 percent more valuable than customers who are highly satisfied but not emotionally engaged.
Motista's research identified more than 300 motivators, such as "stand out from the crowd" and "enjoy a sense of well-being." Of course, how you connect on an emotional level varies by industry and brand. It makes sense that a customer who's looking for financial guidance will have different motivations than one shopping for a new sports car (perhaps "have confidence in the future" vs. "feel a sense of thrill").
The best way to determine what drives your customers is to ask them; then you can design your campaigns accordingly. Focus messaging on the key emotional motivators for your customers, and target the audiences that are the most emotionally engaged. One condiments brand, for example, discovered that a whopping 60 percent of its emotionally engaged customers were followers on social media, so it boosted growth by targeting audiences on Facebook, Twitter, and Pinterest.
To reap the substantial benefits associated with loyal customers, you must earn their loyalty by providing value. The best ways to do this are by anticipating your customers' needs with data, creating premium content that engages them directly and forging connections based on emotional motivators. Focus on this trifecta, and your customers will be unwilling to do business with anyone else.