Big Data and Big Emotions: The Secret Sauce of Brand Loyalty
Big data is not enough on its own. Big data needs big emotion.
Kevin Roberts, Chairman, Saatchi & Saatchi (retired in 2016, after 17 years as Worldwide CEO).
Brand loyalty has not recovered from the global recession. Customers are still price sensitive. We all shop around, even when people are in stores, a price comparison with a competitor is only a few clicks away.
All of those clicks, from page views on e-commerce and m-commerce websites to social media engagement and email open rates, are pouring a steady stream of information about customers into CRMs and marketing systems. Brands know more about their customers than ever before, so why is brand loyalty, for the most part, still so fragile?
On its own, big data is not enough. Encouraging customers to spend more over several years, which is the ultimate aim of any loyalty programme, requires an emotional connection.
Going Beyond Automated Offers
In September 2016, Marriott International completed its $13 billion acquisition of Starwood Hotels & Resorts, creating the world’s largest hospitality company. Across the group, Marriott has 30 brands, 5,700 hotels in 110 countries with 1.1 million rooms, and another 195,000 in the development pipeline.
Marriott is in a competitive market. Alongside other hotel chains, customers can now book accommodation through Airbnb and other platforms, and online travel agents (OTAs) that generate $16 billion in revenues from the hospitality sector. Booking direct means hotels can earn more profit, but encouraging customers to book direct is a challenge the industry is struggling with.
Marriotts solution was to launch the world’s most comprehensive loyalty scheme. With 87 million members, between Marriott Rewards and the Starwood Preferred Guest program, they have more data than most brands. Shortly after the acquisition was complete, guests could access both programs, with a relaunched loyalty app and the ability to use points to book rooms with any brand, including the luxury properties, the St. Regis and Ritz-Carlton.
Guests on the loyalty schemes that book direct can also access free Wi-Fi, get exclusive room rates and use points to pay for experiences, such as wine tastings, Super Bowl parties and museum tours. “Loyalty is an essential element,” says Karin Timpone, Marriott global marketing officer. “By expanding with physical buildings and digital touch points, we’re building an audience and enriching our relationship with them,” Timpone said in a Fast Company interview.
Loyalty generates rewards, which in turn, generates loyalty and higher customer lifetime value (CLV). Everyone understands the benefit, but not every brand runs schemes with the same success as Marriott, despite a wealth of data at our fingertips.
Ingredients of the Secret Sauce: An Emotional Connection
Customers need to feel valued. Automated offers, giving everyone a discount is not the same — won’t have the same impact — like a personalised bonus incentive. A birthday offer, for example.
But be careful. It can be tempting, with so much data at our fingertips, to implement excessive personalisation. Social media sentiment analysis, email marketing and geo-location tools could cause brands to cross the line, from personal to creepy. No one wants to receive an email or social media message from a brand when they happened to walk past a store, or mention them on Facebook, or forward an email to a friend. That is taking personalisation too far.
Don’t be a creepy brand. Instead, think of ways you can introduce micro-targeted offers to different segments in your database; age, occupation, location, etc. Doing something extra, unexpected or simply nice creates a deeper emotional connection. Customers are impressed. Even if they don’t take up an offer straight away, they remember, they are more inclined to tell others — either in person or on social media — and spend more with brands that show they care.
Be the brand that cares, that goes the extra mile.
In return, customers will reward you with positive brand mentions, referrals, repeat purchases — the return on investment you need from a loyalty program.
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