Loyalty is About Keeping Promises

October 28, 2018

I recently came across an industry research piece that talked about how some retailers are re-imagining loyalty. The piece talked about the best loyalty programs being more than just monetary rewards, with personalization at their core. Great points – but what caught my attention were the examples quoted. They were all related to driving more customers into the funnel, i.e. Marketing, and the actual shopping experience. While this is absolutely important and drives topline growth, there is another equally important driver of customer loyalty that appears to still be in the dark ages when it comes to the use of data & intelligence. I am talking about the actual experience a customer has with the product or the service being sold – which in the case of a retailer, is often more than the goods that are exchanged.

In today’s world, when a customer chooses to shop with a retailer, what they are buying is more than quality products at great prices. It’s a promise that includes many things – to make sure the products are delivered on time and in good condition, to keep the customer informed along the way in their preferred method of communication, to alert them as early as possible when a problem is anticipated and to do whatever it takes to fix problems when they do happen. Customer loyalty is impacted when any of these other promises are not met. For example, a delay of more than an hour in the delivery of a customer’s grocery order has been observed to cause a 15-20% drop in the likelihood of that customer returning.

However, what we see in working with several retailers globally is that while they extensively use data & intelligence in the marketing and shopping experience, very little data & intelligence is leveraged in managing the post-purchase experience. Systems are already in place at most retailers to take orders from different channels and route them to stores; and to plan and execute the picking, staging, and fulfillment of these orders. But the active management of these activities during the day is left to people who have basic tools, such as dashboards & reports at hand. What is needed is a modern-day Control Tower that enables the people managing these processes to be more efficient & effective.

A Control Tower that takes in hundreds of data points from multiple sources and in real-time predicts problems & recommends options to resolve them. Akin to an air traffic control tower, the Control Tower informs store managers at a glance how different processes are performing, which orders are at risk, and what impact any mitigation action will have in entirety. So the next time a customer’s order is likely to have a problem, a manager can proactively either avoid the problem and keep the promise or ensure the promise is appropriately reset. And the more promises are met, the more loyal the customers will be.

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