14 December 2011
Steve Jobs, one of the great marketing minds of his generation, once said: "You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new."

Almost a century earlier, Henry Ford, one of the great marketing minds of his generation, reportedly observed: "If I had asked my customers what they wanted, they would have said a faster horse."

Both men, in different ways, were highlighting the perils of being excessively led by customer research. Which is not to say customer research is inherently a bad thing, of course, but merely to note that business and product strategies built solely by reacting to market research are:

a) too slow (as Jobs knew), and;

b) too uninspired (as Ford knew).

Understanding what the customer wants is only part of a successful business strategy. Loyalty and marketing professionals need to show Jobs' proactivity, and Ford's foresight, to exceed customer expectations with innovative new propositions.

Create the spark

In fact - and here the challenge becomes a benefit - loyalty and marketing professionals do not need to carry out orchestrated research to understand their customers. Many companies, from financial services organisations, supermarkets and utilities providers through to airlines and hotels, already hold a vast amount of data on their customers, based on past activities and purchases. But they are not yet making the creative leap from insight to innovation. Fuel and air alone do not make a fire; to create unique customer value, you also need a spark.

Online retailers offer perfect illustrations of how the intelligent analysis of customer activities can lead to up-selling and cross-selling, which in turn generate repeat business and, ultimately, loyalty. The customer relationship techniques of retailers like Amazon, for example, often demonstrate the power of suggestion. By recommending relevant purchases and activities based on previous interactions, the customer experience can easily be personalised to encourage loyalty. Marketing and loyalty professionals need to show the same proactive attitude toward customer data as online retailers, highlighting products and opportunities that customers will want but just might not be aware of yet.

To keep one step ahead of customers, and exceed their expectations, brands need first to understand how those customers move and act in their everyday lives. Armed with that knowledge, brands can - and must - maximise the number of marketing touch-points and find innovative ways to add even greater value in these channels to increase their customers' loyalty. Embracing the complex, interconnected benefits of the evolving social media world is a necessity. Customers already love and include online social communities in their everyday lives. Brands that understand how they can play a more significant role within their customers' social communities can create greater emotional connections. The key, as Jobs and Ford knew, is to act now and to act with creativity.

Technology enablers

No ambitious brand, for example, can afford to sit back and just watch developments in m-commerce and geolocation marketing, waiting to see how these fields evolve to meet customer needs. Loyalty and marketing professionals must be pioneers, driving change and surprising customers with initiatives that add unexpected, welcome value to everyday activities. The combination of smartphones (or similar mobile devices) and geolocation marketing creates an opportunity to drive engagement with the customer that is relevant and targeted to where that customer is standing right now, from an airport shopping mall to a music festival.

The technologies of m-commerce, especially near-field communication (NFC) and contactless payments, strengthen the proposition. For example, having received a marketing communication on a smartphone, such as a discount offer, specific to the customer's immediate location, the customer can then use the same smartphone to make a simple 'tap' transaction purchase, earning loyalty points that can later be redeemed through another NFC transaction. The whole process is an exercise in streamlined, efficient loyalty marketing, engaging the customer - and connecting the customer to the brand - anywhere in the world.

From airline frequent flyer programmes through to channel reseller programmes, many loyalty strategies have not progressed from outdated legacy business models. Brands must challenge themselves to innovate consistently, and find ways to differentiate their customer relationships from competitor offerings. The risk if they don't is to lose vital customers. The time has come to make a move - and fast: from insight to innovation.