Customers are savvy, minimally loyal, and dynamic. The key to customer modeling is moving from purchase-driven segments to human-level microsegments that can reveal motivations and attitudes and signal future behaviors, priorities, and expectations.
Coupon- and discount-oriented experiences are insufficient, not only because of the poor redemption value. The question is, what are the right experiences, for whom, when and where, and how best to make them a true expression of brand? Retailers need to solve loyalty — designing programs that delight and reward customers and build affinity and economic value.
Do loyalty program members experience or feel differently than nonmembers? Does the instant reaction to a discount endure to build affinity or rapidly expire? This is the fundamental problem with value — it is in the eyes of the beholder and fragile in the noisy world of consumers. Tomorrow’s loyalty and membership investments need a clearer line between money spent, emotion, and economic return.
Loyalty is emotional. It is an earned outcome: a human’s belief that your firm is working in their interest, creating value, and worth their time and money. Decaying trust in institutions, experimental behaviors, and tribal influences make loyalty harder today. But you need to see and solve loyalty on your customers’ terms.
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