Anja Petrovski, Marketing Director at Volkswagen Middle East, unveils what customer loyalty looks like today.
Let’s talk about loyalty. As marketers, it’s what we crave. We strive for it in every part of our marketing activity and we’re working harder than ever to show our customers we are the right brand for them. This means staying relevant and showing that we have their needs at the center of our thinking. This goes far beyond our products and into the heart of what we stand for and the actions we take to prove it.
The foundation of every successful brand is loyalty. It has to be earned every day of every week and with every word and action. So, how can brands ensure that they’re retaining their customers with ever-increasing expectations in an ever-changing landscape?
Building loyalty through meaningful engagement
The importance of customer loyalty impacts almost every metric important to running a business. The primary function of a business is to provide customers with products and services that meet their needs so that they buy from us. Once we have our customers, we begin a relationship and our focus shifts to retaining them and building advocacy - and that means making them care about us. Like every good marriage, love has to go both ways.
According to research by Havas Group, 77% of brands could disappear from the face of the earth and consumers wouldn’t care. Customer retention is critical to business success, growth, and profitability and plays a massive role in brand perception. A study by KPMG shows that when a customer is loyal to a brand, 89% will recommend said brand to their friends and family; 78% are proud to own the company’s products; 69% feel a strong personal connection with the brand; and 45% won’t switch brands even if they have a bad experience. To ensure customers stay loyal to a brand, it is essential for brands to provide an experience worthy of that loyalty.
By using personalization and engaging user experiences, a brand can begin to feel indispensable and irreplaceable and this is the future of loyalty. Event and experiential marketing are great ways to tap into the connection factor as they engage the customers emotionally and leave a long-lasting impact.
Going beyond just a loyalty program
In the past, customer trust and loyalty heavily relied on loyalty programs, providing customers with discounts or amenities to retain them. Expensive loyalty programs are built on the right idea but for the wrong reasons. Loyalty is more than just offering a good deal and it goes beyond just transactional awards. While this approach may work to a degree, the loyalty landscape is changing. Continuous good experience is what ignites trust and retention. Loyalty is now about advocacy; devoted advocates are essential to growing your brand and they should be rewarded for their patronage. However, spending should not be the only meaningful way for those customers to prove their loyalty. Loyalty has shifted from rewards to relationships.
Rather than focusing on the old-school method of providing a discount, brands are becoming more tailored, personalized, and real-time. Customers no longer base their loyalty on price or product. Instead, they stay loyal to companies due to the experience they receive.
Adding the human touch that resonates
The key to achieving customer loyalty is not in being perfect; it is in being human. When something doesn’t go perfectly, brands should respond quickly to get back on track.
Another way brands can connect on a human level is by being identity-led. Identity loyalty happens when people so strongly connect emotionally with the values associated with a brand that the brand becomes part of who they are.
It’s also important to draw on real people’s stories to show authenticity and ensure that brand storytelling is relevant to the local customer. For example, the Volkswagen T-Roc was launched in the region through a campaign called "Born Confident," which focused on the art of having confidence and commissioned young local artists to portray what confidence means to them through art exhibited at Alserkal Art Week. These art pieces resonated with the audience really well, showing how people view the concept of confidence by using regional stories as inspiration.
It’s not all about you
Today’s customers have little to zero tolerance for brands that are self-centered and boast about their products or services; and they are no longer making decisions based solely on product selection or price. They’re assessing what a brand says, what it does, and what it stands for to connect on a deeper level. They support companies whose brand purpose aligns with their beliefs and they reject those that don’t. This is why we partnered with Road Safety UAE earlier this year. This partnership really matters to us as we know safety on the roads is an issue our customers in Dubai really care about.
Rather than outwardly promoting their products, brands need to concentrate more on significance, legitimacy, and social awareness. This is how brands can connect deeply with their customers on a more personal level and amplify brand fidelity to engender true loyalty.