If you were given the opportunity to write a one-page letter to C-Suite executives about what they should be paying attention to this year, what would you say? I had that exact question posed to me by Gini Dietrich of Arment Dietrich. Gini gathered 32 different business folks together (many from the pr/marketing sandbox, where Gini plays daily) to share their thoughts.
As you could imagine, my focus was on customer loyalty. Below is my letter, which is included as part of the Dear CEO eBook. If you are interested in learning more about the other fantastic folks that participated or in purchasing the eBook, visit SpinSucks.com or follow the #DearCEO hashtag on Twitter.
Here are my thoughts (yes, they may sound a bit familiar):
If you have the time and resources to do just one thing this coming year, I advise that you invest in your top assets to produce the best short- and long-term returns. And your number one asset- which does not happen to reside on your balance sheet by the way– is your customers.
With customers having so many different options to choose from for goods and services, developing long-term customer loyalty is critical for your business. Not only is it easier to sell more to customers that already love you, but raving fans will tell other customers about your brand or company. When you factor in the expense to try to reach new customers and the high lifetime value of each individual customer, loyalty needs to be a top priority.
However, you need to move past old-school, ineffective loyalty approaches. If you want to develop long-lasting customers and raving fans, start embracing what I call Loyalty 3.0.
The first phase of loyalty rewarded customers that spent the most- aka the “spenders”. However, this approach creates loyalty to a program, not your brand or company; you are only as effective as your latest offer. Plus, it is really just another form of price competition. Buy 9 and get one free is akin to a 10% discount across the board.
Loyalty then evolved in the form of social media where brands realized that it was not just the spenders who were important, but also the influencers (aka the “senders”) who indirectly accounted for sales through brand advocacy. However, in social media, often the exact same strategies are used, with companies trying to buy influencers attention and affection with swag. This still doesn’t create loyalty.
To really create loyalty, you need to start practicing Loyalty 3.0. Engage both your senders and spenders by making them feel cared for and important. This is a holistic approach which can be led with product functionality (e.g. Apple), customer service (e.g. Nordstrom), creating an experience or lifestyle association (e.g. Harley Davidson) or even by creating a bridge to the customer with ancillary products, services, content or experiences that are important to the customer (e.g. food companies providing time saving recipes to busy moms).
This coming year, take the time to:
-Identify your spenders and senders;
-Listen to their dialogues;
-Understand what is important to them and what easily fits into their lives; and
-Demonstrate to them that they are important and you care about them as a brand/company
This is the most important investment that you can make, because without truly loyal customers, nothing else matters.
Best wishes for a successful 2011,
Carol Roth, Partner
Intercap Merchant Partners
What would you tell CEOs to invest in this year? I would love to hear your thoughts!