THE CLARUS Blog

Why You Need an Active Mindset to Build Customer Loyalty

One of my favorite thought exercises when it comes to managing the business, problem solving, or strategic planning is thinking through the concept of planning vs. reacting.

In other words, the difference between Having an Active Mindset or a Passive Mindset.

There’s a great blog post covering this concept, but basically a passive mindset accepts that things happen “to you” and that you don’t have much control.

An active mindset accepts that the individual has much more control and it depends on whether you choose to do something about whatever situation you find yourself in.

Now, why is this relevant for a blog post on loyalty?

Well, I’m glad you asked.

 

Customers Are Learning About Your Brand (and Others) Every Day

First, let’s talk about the first thing that should come to mind when you’re talking about loyalty. Your customers.

Whether you like it or not, your customers are learning about your brand every day. They are interacting with your competitors.

They are interacting with similar products. They are watching/listening/reading the news and their world view is being shaped.

As an individual they are developing their own impression of your brand based on the collection of experiences they have.

And yeah, I know it’s easy to just lump customers into some broad cohort we’ve invented.  “They’re millennials, all millennials like x.”

That’s taking the easy way out.  You’ve got to work harder if you really want to build loyalty.

 

Loyalty Is Harder Than Ever

We live in the Age of the Customer where consumers have virtually unlimited options.

There isn’t a lot of pain in switching brands based on price and availability.

That’s why it’s more important than ever to use a loyalty program as a differentiator for your brand.

As a business owner, it’s your responsibility to have an active mindset and understand your customers. Not just lumping them into some generic bucket and serving them all the same way.

Talk to them. Listen to them–and I mean really listen.

What quantitative means are you using to understand what they are doing?

What qualitative measures are you using to understand why they are doing it?

Maybe there was a time when there was less competition?

And the barrier to entry was higher?

And your competition wasn’t a click away?

Yeah, wouldn’t that be nice and easy?

The days of coming up with one “brilliant” innovation once every couple of years so you can continue to coast on your growth rate are gone.

How do most companies find themselves disrupted? Gradually, then suddenly.

Back in the 1950s, the average lifespan of an S&P 500 company was 60 years. Now, it’s 20 years. How long has your company been around?

 

The Old Loyalty Model is Broken

So, if times have changed and customers have changed, why would you rely on a set of tactics that are no longer relevant?

Legacy SaaS loyalty companies charge huge upfront costs and use a model that benefits them – not you or your customers.

You sign up for their solution, implement their program, and then are left on your own to run the program.

A true loyalty partner is needed to mitigate risk and build, manage, and continually optimize the program.

Premium loyalty is a lot different than traditional loyalty.

Recurring billing becomes a core competency. In a traditional loyalty program, members simply ignore the programs and stop using them if they’re not getting value out of it. In a premium loyalty program, they can cancel their membership.

Member acquisition and retention are harder. After all, it’s something that you’re asking your best customers to pay for on a recurring basis.

We have an entire team dedicated to testing and optimization. “Set it and forget it” is not in our vocabulary.

It’s not just the need for a billing engine in a paid program, but it’s also the experience associated with this process.

What happens if a credit card is declined? How does recycling work? What about the customer service needed when a question or issue arises?

These are all questions and scenarios that we are comfortable with at Clarus.

That’s why we take a hybrid approach to loyalty.

We have not only built a loyalty technology platform that is quick to market, customizable, and reliable, but we have a whole team of loyalty experts behind each client’s program.

We have a full technology team to build, customize, and run these programs. We have a digital marketing team to help our clients attract and retain their best customers. We have data analysts, billing specialists, and even dedicated customer service reps that work on behalf of our clients every day.

A premium loyalty program is the best of your brand for your best customers.

Therefore, a true premium loyalty partner is needed to mitigate risk and build, manage, and continually optimize the program. And we’ve been focused on that specifically for almost 20 years.

We have the core competencies needed to build, launch, and optimize premium loyalty programs that many traditional loyalty companies have never needed to have. It’s in our DNA as a company.

 

It’s Time To Act

So, if we’re going to use an active mindset to solve this problem, here’s what I’d ask myself.

How do you evaluate your company’s loyalty strategy?  What KPIs are you looking at? Is it working? Is it really driving loyalty?

Is it aligned strategically with your senior leaders?

Do you have a loyalty product, but un-loyal customers?

Is your loyalty strategy serving you? Or your customers?

We recently surveyed a large group of consumers and nearly 70 percent of them agreed with the following statement: “My loyalty is more difficult for a retailer to maintain than ever before.”

There’s your friendly warning.

For retailers, loyalty is more challenging than ever to gain and retain.

Are you going to wait for disruption to happen to your brand? Or, are you going to seize the day and act now?

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