Global customer engagement and loyalty landscape is at an inflection point. Research shows 86 per cent of consumers now believe the experience a company provides is as important as its products and services. Fast-evolving consumer behaviour – including a dramatic acceleration of online engagement during the pandemic – means brands must reimagine how to attract and retain their most valuable customers.
A feature Starbucks recently added to its mobile app provides an excellent example. Via this app, customers using Amazon’s voice platform Alexa can obtain their morning coffee fix with a voice command. If the customer has already set up a preferred choice of coffee and location on the app, they can even ask Alexa to “order their usual” as they head out the door. Alexa can then integrate with the app, place the order for the customer to collect, and, the next morning, ask them if they would like to repeat it.
As this illustrates, fast-evolving customer expectations mean that brands must now deliver a balance of enhanced experiences and rewards at the right time, to the right customer, through the right channel. When it comes to customer engagement and loyalty strategies, understanding customers’ behaviour – and crafting an experience from it that adds value – is now more important than ever.
Evolving customer engagement and loyalty approaches
Recent Collinson-commissioned research on the future of customer engagement and loyalty reveals that more than 90% of surveyed brands now view loyalty programmes as integral to their overall brand proposition. Many are actively reviewing their existing customer engagement and loyalty programme value proposition to ensure it meets customer expectations.
61% of respondents also revealed that they plan to scale up their investments in technology infrastructure. Increasingly, brands are looking to invest in building a single 360-degree customer view internally by bolstering their data management and analytics platforms. Such investments enable the real-time collection, analysis and activation of customer data, which in turn can help brands create richer experiences.
At the same time, leading brands are strategically sharing data with non-competitive, complimentary partners via ‘collaborative commerce’ platforms to enhance the overall value proposition. Partnering with like-minded brands can open new revenue streams and acts as a channel for customer access and acquisition.
Innovation in action at Capital A
These responses share a common thread: harnessing the power of data and technology to deepen customer engagement. Recent innovations at Capital A (formerly known as Air Asia) show the business impact that such an approach can have.
Capital A has created a lifestyle super app that offers an end-to-end experience across travel and lifestyle services – including flights, hotels, ground activities, transport, food, health and e-commerce offers.
By linking businesses with the Capital A ecosystem and keeping data at the heart of its proposition, the organisation has been able to substantially enhance its connections with customers from a probable three to four times per year to potentially three to four interactions per day.
Navigating new challenges
As this example shows, embracing data-driven solutions can deliver substantial benefits – but do these go far enough? The evolving data landscape is also presenting brands with complex new obstacles they must tackle as they refine their customer engagement and loyalty approach.
Take the issue of third-party cookies. These identifiers are fast disappearing as more companies and platforms change their policies to protect customer privacy. Google, for instance, has announced it will phase out third-party cookies in the second half of 2024.
This presents a major challenge for most brands, which have long relied on third-party data to help them gain the nuanced understanding of customer expectations they need to engage, deepen relationships and build life-long loyalty.
As today’s consumers grow more aware of the value of their personal data, and more wary of businesses potentially misusing it, they may also feel more cautious about sharing it.
But as research shows, consumers are more willing to share information with brands if they know it will be used to create meaningful experiences that are personalised and add value in a mutually beneficial way. That means brands that enhance their capabilities to focus on the personal preferences of individuals, rather than broad segments, will be in a stronger position to increase retention and promote loyalty.
While segment-of-one marketing remains a futuristic goal for most in the customer engagement and loyalty industry, artificial intelligence (AI) and data analytics innovations are bringing this type of interaction closer every day.
These solutions rely on two-way interactive communication, and sophisticated data analysis powered by AI to create a complete picture of an individual and their personality traits, helping brands identify and serve each customer in a distinctive way.
Deepening customer engagement
As well as adopting such solutions, there are three simple action steps brands can take right now to set up their customer engagement and loyalty strategies for long-term success:
1. Invest in robust, real-time data. Brands need to be self-reliant and build understanding of customers by enhancing data collection. This can be done through zero-party data sources (information that a customer intentionally shares with a brand by participating in quizzes and polls, online chat or newsletter sign-ups) as well as first-party data sources (material gleaned from the way a customer uses a company’s website).
With the right technology and data solutions in place, brands can generate better customer insights that power stronger customer experiences.
2. Consider shared ecosystems. Synergistic partnerships with other brands within an ecosystem are effective ways to elevate the best parts of every brand experience and create a holistic value proposition for customers that is underpinned by ecosystem data, insights and activation.
3. Reinforce safety and trust in all engagement. Consumers that engage online are often more willing to share personal information with brands they believe will manage their data responsibly.
Brands can boost safety and trust by highlighting – on websites and in customer communications – that they have sought and received their customers’ permission to collect and retain data and are only using it in ways their customers have agreed to.
Driving customer engagement and loyalty in the post-pandemic era
With the world opening up at pace as the pandemic recedes, it’s clear brands must re-imagine their customer engagement and loyalty proposition if they are to meet fast-evolving consumer expectations and overcome new third-party data challenges.
Winning in the post-pandemic era involves staying laser-focused on understanding customers’ needs at an individual level. By understanding their customers in more detail, companies can be better positioned to enhance their customer engagement and loyalty programmes with new offerings that align with customers’ evolving expectations. At the same time, brands must invest in core areas that can help them build enhanced experiences.
That way, companies can lay the foundations for next-generation customer engagement, forging deeper connections and locking in lifelong loyalty.