Why Your Customer Loyalty Efforts Stink (and What to Do about It!)

Why Your Customer Loyalty Efforts Stink (and What to Do about It!)

As anybody who’s read Evergreen knows, there’s a lot more to creating enduring loyalty than simply trying to create great experiences for customers. There are certain patterns that are consistently present in organizations that have tremendous customer engagement and loyalty, which are explored in great detail in Evergreen.

So the question is, why is this rare enough that it warrants a book length treatment?

Why isn’t every business doing this already?

It’s a question that I’ve been asked a lot recently, and I think that what it really boils down to is two variations of “I don’t know how.”

  1. I don’t know how to measure what my current loyalty / attrition levels are…
  2. I don’t know how to measure the impact of any changes I make…(after all, customers may stay due to other changes)

I’m always amazed when I talk to clients and prospects, as in 90% of cases they have no real handle on their current attrition or loyalty levels.

Them: “Noah, I want to reduce my attrition!”

Me: “That’s great, and I can certainly help with that – so tell me, whats your current attrition on an annualized basis?”

Them: “I don’t know.”

Me: “Okay – well how do you define attrition? After all, if I go to Starbucks today, but don’t go tomorrow, I’m not an ex Starbucks customer… But if I don’t go back for a year, I probably am. So where’s the line in your company?”

Them: “I don’t know.”

As you can imagine, it’s difficult to justify the investment in improving retention or building loyalty program if you can’t see how you’d measure the results. That’s why the first step is so often ensuring that there are some basic, key analytics in place.

One of the many things I’ve learned from my good friend Shawn Veltman of Peritas Solutions is the importance of being able to find tangible, actionable information from seemingly meaningless data, and this is especially true at the start of a loyalty or retention initiative.

Finding a true baseline and measuring the results of different strategies throughout the campaign is a pre-requisite for success.

After I’ve worked with the client to create that baseline, the next issue becomes measuring the impact of changes. What do we want to happen with the loyalty program? Do we want more sales, more frequent store visits, more engagement online, more visits to the website, more activity in an online community, more mentions on social media? What is the ultimate goal, and what are the short-term measurements of that goal?

Again, we’re relying on a strong understanding of our own data and the ability to interpret it here. Without this, the best you can do is look back at year over year sales, and hope that you see an increase in the rearview mirror. This is like driving your car blindfolded and waiting until you either stop safely or crash into a fiery wreck to know how well you were driving.

The final steps are to refine the existing campaign and then start the experimenting process again. Using the metrics from our ongoing campaign, we can see the areas that are doing well and reinvest in those; see the areas doing poorly, and try to tweak them if possible, or simply jettison them.

By keeping a close watch on the real-time feedback we’re getting from our customers, it becomes easy to see what’s working where, and what’s not.

So, as always, I’d like to leave you with a few questions:

  1. What are you doing to inspire customer loyalty or to curb customer attrition?
  2. How are you measuring your current attrition/loyalty?
  3. How confident are you that you could successfully measure an uptick in loyalty?