Rethinking customer loyalty
Forrester Analysts Emily Collins and Rick Parrish examine the changing — or eroding — state of customer loyalty, as aged loyalty programs are misfiring against customer priorities and companies struggle for the hearts, minds, and spend of empowered, restless customers.
Today’s consumers are less loyal than ever before. They’re more inclined to shift spend based on a single poor experience or to experiment with a new service. This shift-ready behavior is further stimulated by companies spending to pay customers to move.
At one time this behavior was considered “millennials being millennials.” Forrester’s research shows that this shift-ready behavior is now common, and notably common for those in higher income brackets.
That is the challenge facing companies that have aged loyalty programs built in the late ’80s. On an economic point, it costs 5 times more to acquire a customer than to retain and enrich customers, but the majority of companies are failing to make the right kind of loyalty investment.
In our discussion, Emily and Rick describe the current state of affairs and the critical need to reframe loyalty programs from maniacally focusing on behavioral loyalty — getting that next incremental transaction — to include driving emotional loyalty and understanding the motivation and context of why a customer is buying from your brand.
This episode serves as a road map and rallying cry for loyalty programs to be part of an organization’s customer experience strategy as a means to connect loyalty spend to current customer realities.