In the marketing world, we often talk nostalgically about the "corner store" as the epitome of customer loyalty. Think back to 1957: That's when Leave It to Beaver debuted on TV, Elvis Presley purchased Graceland—and when most people did their shopping at nearby convenience or department stores.
True, retail options were more limited then, and those stores had all we needed, but we also knew the family that owned the corner store, or we were friends with the manager and had built a relationship. Back then, the customer-business relationship was king: We wouldn't dare shop anywhere else.
Sixty years on, a lot has changed. Sure, Leave It to Beaver is still in reruns, and Graceland remains the top tourist attraction in Memphis. But the convenience or department store—and that Norman Rockwell vision of loyalty—is dead.
As technological innovations have brought us everything we need at the click of a mouse, they have also hollowed out the practice of building relationships with customers. We've made it easier to transact with them—and they, in turn, treat loyalty as something that can be bought, sold, and replaced. And guess what? Your "loyalty program"—trading dollars for points for dollars—isn't making things better: Your "best" customers (those in the top 20% of spenders) are spending their dollars far and wide, according to a 2014 study by McKinsey & Company.
Beyond employing smarter analytics and actually measuring loyalty—figuring out that all-important share of wallet stat—marketers need to get back to fundamentals. Here are three key ideas on how to do just that.
1. Reimagine your category—by putting customers in the driver's seat
No matter what industry you're in, it's been utterly and permanently transformed by technology over the past 60 years. And though technological innovation often has a negative impact on loyalty—the easier it is to get customers, the easier it is to lose them—some of the past decade's most notable business successes have put customers at the centre of their universe.
Whether it's Tesla, Airbnb, or Slack, entire categories have been reinvented with a model that speaks to these central questions: What does the customer really want? What are their aspirations, and what's in their best interest? Why do they do the things they do?
Take the first step (it's free).
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