Top 12 Customer Loyalty Trends for 2012 [Slide Show]

December 23, 2011

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Customer loyalty is critical for driving sustainable business growth, yet retaining and engaging customers remains one of the greatest challenges that businesses face. To help marketers develop more effective customer loyalty strategies, loyalty marketer's association Loyalty 360 suggests that in 2012 businesses tap into the following customer loyalty trends.

1. Customer engagement is the journey, loyalty is the destination

Loyalty is a much bigger, broader, richer complex idea than it has been in the past. And it's growing ever more complex. Loyalty is no longer about points, discounts, miles, rewards; it is about the way the processes, technologies, ideas, interactions engage a customer with the brand. Deeper engagement is the only way to achieve loyalty.

2. A renewed (and much-needed) focus will be placed on customer retention and loyalty vs. customer acquisition

Customer loyalty has been identified as the top nonfinancial business challenge facing companies in 2012 (by Protiviti). Although daily deals like Groupon, LivingSocial are generating lots of buzz, marketers are realizing that price-based technologies have taken their focus away from the real prize: customer loyalty.

3. Brands will need to recognize customers at all touchpoints, especially the call center, to deliver a quality customer experience

Some 78% of consumers believe that having a great customer experience makes them loyal, a recent poll by Loyalty 360 found. Creating that type of customer experience involves delivering quality customer service across all touchpoints. And marketers are realizing that this means integrating the call center into the overall customer experience.

4. Marketers will work to glean intelligence from social media feedback

The vast majority of real-time data created today is unstructured data. Study after study is showing that marketers are struggling with mining this data and analyzing it to derive valuable insights and actionable intelligence from it. Only 38% of business intelligence analysts and data scientists strongly agree that their company uses data to learn more about customers, a just-released report by EMC found.

5. Loyalty programs will be considered a critical element of "lifecycle management"

Engagement with customers over a lifecycle is the new model for success. The only way to earn loyalty is through deeper customer engagement and data gathered from loyalty programs that can be used effectively to drive a quality experience across all touchpoints and at all stages of the customer lifecycle.

6. Marketers will look at a mix of location-based behavioral data and attitudinal and preference data

This trend will have an especially important impact on the daily deal space. Brands will want to access that data and control the message rather than offering such huge discounts to anonymous individuals.

7. Mobile coupons will become mainstream

The total redemption value of mobile coupons worldwide will be more than $43 billion by 2016, Juniper Research forecasts. That's an eightfold increase from $5.4 billion this year. Cost-effective mobile coupon campaigns provide merchants with an easy way to build customer loyalty.

8. Social media ROI will become a focus

Though marketers believe that social media is worthwhile, most don't know how worthwhile it is. As marketers become more sophisticated and skilled at navigating the social media channel, they will be more demanding of tools that track and improve ROI. In fact, 63% of CMOs say ROI on marketing spend will be the most important measure of their success by 2015, the 2011 IBM Global CMO Study found. However, just 44% of CMOs say they feel fully prepared to be held accountable for marketing ROI.

9. Brands will increasingly use the rich information about customer buying patterns generated via loyalty programs to create more targeted marketing/messaging

Gathering and tracking data amassed in the loyalty program will help marketers with segmentation and messaging for acquisition and retention. The information on customer transactions, likes, dislikes, and preferences gives brands the deep level of customer intelligence needed to deliver the most relevant, highest quality customer experience and drive long-term loyalty.

10. Social personalization will increase

Marketers will harness the power of recommendations and referrals to persuade customers and prospects to follow their friends' lead. Marketers will take the initiative to encourage reviews, implement refer-a-friend programs, etc.

11. Mobile digital wallets will mark a big shift in retail payments

With the value of transactions made over mobile devices estimated to be $240 billion this year (Juniper Research) and predicted to triple that size over the next five years, it's not surprising that the battle over mobile wallets will continue to intensify. And with analysts at Forrester predicting that by 2016 consumers may be able to leave their traditional leather wallet at home and pay for most of their shopping over their handset, retailers need to think about the impact of mobile wallets as they build out their loyalty programs.

12. Worthy causes will continue to influence consumer brand loyalty

A study from Cone Communications found that consumers are more likely to pick a brand based on charities or causes it supports. A full 94% of responding consumers said they would abandon their typical brand for one of approximately equal quality and price if it backed a social issue.

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