Customer Loyalty in the Digital industrial Economy
- 1. IPnrSaicgthictasl
As companies continue to make significant
investments to become digital enterprises and
harness all the data generated by people,
their activities, and the billions of “things”
connected to the Internet, customer loyalty
programs must evolve to provide new digital
services.
Customer Loyalty In The
Digital Industrial Economy
Building Loyalty By Helping
Customers Digitalize Their Lives
As companies continue to make significant investments to become digital enterprises and
harness all the data generated by people, their activities, and the billions of “things”
connected to the Internet, customer loyalty programs must evolve to provide new
digital services.
You (the customer) are the essential participant in this new “Digital Industrial Economy.”
In fact, this whole digitalization effort absolutely requires your digital representation to
work. Your digital representation is already being gathered implicitly and sometimes
explicitly, and yours may already be vaguely outlined or even painstaking ly detailed.
Craig Templin
Business Director
- 2. ‘Customers are also busy keeping pace with the digital world, therefore they
are not going to want to give up this information unless two conditions are
met (a) they get something in return, and (b) it does not take any sign ificant
amount of their time or effort.’
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This customer information is vital to effective
personalization campaigns, which are even
more important when you are mobile- and
your time as well as your ability to interact
with the device is significantly limited. Now
as we are evolving from the Mobility Era to
the Era of Ubiquitous, Wearable Computing
effective personalization is critical as your
time and your ability to interact with the
device is further constrained because you are
interacting while you are doing something
else.
For years Gartner has been preaching that
leading companies are taking advantage
of the convergence of social, mobile, cloud
and information forces (the “Nexus” dynamics)
to create innovative products and services,
reaching new customers in new contexts so
they aren’t displaced by their competitors.
How does a company go about understanding
the subtle relationships between customer
behavior, sentiment, history, location and
intention and then adjust to the prevailing
trends without uprooting business models
and system architectures?
What modernizations of systems, skills and
mind-sets must be undertaken to get there?
Starting with the obvious: nobody knows the
customer better than the customer! That also
applies to their behavior, sentiment, history,
location and intention relative to any given
company and associated products. As stated
by Gartner¹, it is this customer “understand-ing”
that distinguishes the leading compa-nies;
therefore it is of great value and worthy
of extra effort to obtain it. Simply put, the best
way for a company to get this understand-ing
is to ask the customer to provide it. Cus-tomers
are also busy keeping pace with the
digital world, therefore they are not going to
want to give up this information unless two
conditions are met (a) they get something in
return, and (b) it does not take any significant
amount of their time or effort.
Thus, these two conditions represent key
design criteria for the new customer loyalty
digital service. A loyal customer is a repeat
customer. For a company that may have hun-dreds,
thousands, or hundreds of thousands
of products a loyal, repeat customer has likely
purchased many things from you. All these
purchases means you have a LOT of infor-mation.
If a company can give its customer
a way to organize, control, retrieve and use
this information, then that is of significant
value to the customer and the first condition
is met.
Breaking down the constituent elements of
customer “understanding” relative to items
a company offers we get the following:
behavior (items the customer has looked
at); sentiment (items the customer likes or
dislikes); history (items the customer has
bought or returned in the past); location
(customer locale relative to the closest item);
intent (items the customer plans to buy or
return in the future).
To facilitate the requisite data gathering, a
company can strike an agreement with its
customers by which the customer can relatively
effortlessly: sign up for an account, register
for a loyalty card (and/or ID number), and
then provide this loyalty ID upon purchase of
new items. In return, the company provides
the customer with a variety of value-added
digital services including: purchase history
of all in-store and online purchases; on-line
tools to organize/categorize/denote the
inventory of both items purchased from
the company (or any other items scanned
in); on-demand retrieval of any of the data
stored; create shopping and wish lists of
items desired for future purchase; set re-minders
to buy recurring items; simplify
returns and more.
Customers and companies both win in this
scenario as these new loyalty digital services
save the customers time and help to manage
their digital lives. In turn, these services
help the business to thrive amongst its
competitors.
For a company that may have
hundreds, thousands, or hundreds
of thousands of products a loyal,
repeat customer has likely purchased
many things from you. All these
purchases means you have a LOT of
information. If a company can give its
customer a way to organize, control,
retrieve and use this information, then
that is of significant value to the custome,r
and the first condition is met.