Re-Examining Customer Loyalty: Why Loyalty Must Be Bidirectional

It’s no secret that today’s consumers crave experiences, interactions and benefits beyond cookie-cutter promotional emails that use their first names. Retailers recognize this desire from customers and so continue collecting their data to create improved membership programs and personalized experiences. Nevertheless, customers remain unsatisfied. Why?

Consumers believe loyalty flows in only one direction, from the customer to the brand. In the customer’s eyes, they have given up their personal data for perks that they feel aren't worth it. Customers want brands to demonstrate their loyalty to them. In other words, loyalty must be bidirectional, a two-way street where loyalty goes both ways.

The New Pillars of Loyalty: Emotion, Community and Identity

Brands can demonstrate fidelity to their customers by adapting to the recent shifts in loyalty. In the past, loyalty focused on transactions, discounts and speed. Now, emotion, community and identity fuel loyalty. These pillars nurture bonds in a way that transactional relationships cannot. In fact, loyalty programs built on emotional and communal connections significantly extend the customer’s lifetime value.

For example, LEGO’s loyalty program, LEGO Insiders, rewards customers not just for purchases, but also for registering LEGO sets and getting involved in the customer community. A sense of community, belonging and membership where one can interact with people who share similar interests and values is a powerful means of driving loyalty because the customer envisions fellow consumers whenever they think of the brand.

Patagonia builds customer loyalty through emotions and identity via its Worn Wear program, which encourages customers to repair and reuse their Patagonia gear. Through this program, a customer could have the same Patagonia jacket for years, to where they associate positive memories, past adventures and a sense of self with that jacket. In the LEGO and Patagonia programs, loyalty flows both ways in that the customer and retailer strive to foster a long-term relationship.

Supporting 'Omnimodal' Experiences With a Customer Data Platform

Upholding omnimodal experiences also ensures loyalty is bidirectional. Omnimodal experiences integrate real-time data and analytics, generative artificial intelligence, context-aware architecture and event-driven technology for a contextually relevant, predictive and deeply personal brand experience. Unfortunately, many brands struggle to facilitate a seamless hand-off along the chain because their internal systems can’t communicate effectively. The customer, ultimately, feels undervalued despite the amount of personal data they’ve entrusted to the retailer through feedback, surveys and other programs.

Consider a scenario where a customer buys an item online, but when they arrive to pick up at the store, the staff doesn’t recognize them. The culprit in this scenario is data — specifically, fragmented data. Fragmented data makes it difficult (if not impossible) for brands to achieve a 360-degree view of their customers. Retailers can overcome this dilemma with a customer data platform (CDP).

A CDP centralizes and unifies customer data from multiple internal and external sources, creating a single, holistic view of each customer. By consolidating a customer’s identities (e.g., several emails, different phone numbers and multiple addresses attributed to the same person) into one unified profile, a CDP provides a single source of truth that enhances and enriches data. This unified view enables retailers to deliver omnimodal experiences at scale, massively improving customer loyalty.

Business and Technology Changes  

Transforming loyalty programs is no small task, requiring significant changes at a business and technology infrastructure level. Partners with technical and business expertise can help provide support, whether defining key metrics, drawing a loyalty road map, or implementing a CDP to achieve a unified version of the customer. In the end, those retailers that capitalize on customers’ desire for bidirectional loyalty will gain a considerable advantage over those that are slower to adapt.

Chris Hosmer is the managing principal, experience and innovation consulting at EPAM Systems, Inc., a software engineering and product development services provider.