19 Feb 2021

Customer Loyalty or Customer Experience: Which Should Come First in 2021?

By: Lori Stout

Strategy

As a child, you may have pondered the age-old question, “Which came first–the chicken or the egg?” It’s a labyrinth of circular logic, hotly debated for centuries by scholars, scientists, and theologians. Okay, so maybe that’s a slight exaggeration–but it does make you think. If you’ve found our blog, though, you’re probably less concerned with chicken philosophy and more interested in customer loyalty and creating a great guest experience. If you find yourself in a “chicken and the egg” situation when it comes to prioritizing a customer loyalty program or a better customer experience, read on.

You can’t have one without the other

Put your consumer hat on for a second. What does a great customer experience mean to you? Your list probably includes things like speed, convenience, consistency, and personalization. If so, you’re not alone. 80% of the consumer population agrees. When you are given those things as part of your interaction with a business, you are far more likely to remain loyal to that brand. And when you aren’t, you won’t hesitate to take your business elsewhere. Studies have shown that 1 in 3 consumers will walk away from a brand they love if they have even one bad experience. 

Loyalty means nothing without customer experience. 

Now, consider that 77% of consumers are more likely to stick with a brand if they offer a loyalty program. And on top of that, nearly three-fourths of the population belongs to and actively participates in at least one loyalty program.

Customer experience is shallow without loyalty. 

But as a marketer, you’re faced with the constant challenge of doing more with less. You’re navigating new channels, new technologies, new post-2020 messaging to reassure and engage with your customers–it’s overwhelming. How do you solve for the “chicken and the egg” of customer loyalty vs. customer experience when you need both?

Put data to work for you

If you’re like most marketers, you probably don’t struggle with collecting enough data; instead, the struggle comes from gathering data from disparate systems and incompatible formats and piecing it all together in time to make an impact. You might be surprised to learn that most consumers will willingly offer zero and first-party data if they believe that their experience with your brand will improve as a result. What they don’t want to do is offer that data in one channel or system, only to have you ask for the same thing in several others. 

An integrated loyalty platform collects data at every consumer touchpoint and in every channel, bringing a 360-degree picture of your customer into full view. Now, imagine layering on native AI and machine learning capabilities to analyze all of that data and make recommendations about how you should use it to engage with your customers. Suddenly, data is your superpower instead of just another obstacle to overcome. 

Look at the entire customer journey

Customer experience starts with the very first interaction someone has with your brand. Whether it’s online, in-store, at a fuel pump, or in your app– that initial point of contact is your best opportunity to make a great first impression. Old-school loyalty programs rely on physical cards and static apps or web pages. They do very little to draw buyers into the customer journey, treating loyalty as nothing more than a transaction instead of the rich experience that consumers want and expect. 

Compare that to modern loyalty programs that enable you to understand your customer’s preferences, predict their future shopping patterns, and proactively offer a better loyalty experience than they even knew they wanted. 

A modern approach to customer lifecycle loyalty allows you to nurture and guide your guests through the entire journey–from that first purchase as an unknown buyer to the penultimate goal of creating a superfan who not only spends more (and visits more often) but also acts as a willing referral to friends and family.

With the right technology in place, you’ll be able to guide that journey from start to finish by:

  • Developing targeted customer segments and building unique journeys to support them
  • Creating dynamic campaigns and offers and delivering them consistently across every channel
  • Measuring results and using AI/ML to make recommendations and predictions that lead the customer further into their journey with your brand

Call in reinforcements

It’s one thing to recognize the connection between customer loyalty and CX; it’s another to design, deliver, and maintain customer lifecycle loyalty on top of your other responsibilities and demands as a marketer. If you support franchise locations, manage global operations, or add new brands to your corporate umbrella, the challenge becomes even more daunting. 

Your loyalty vendor should not only be able to provide you with the right technology to exceed your CX and loyalty goals, but they should also have the experts, tools, and resources in place to act as an extension of your team. 

Seek a vendor that can deliver a powerful combination of technology + teamwork, with expert services that include:

  • Custom mobile app development
  • Loyalty program strategy and design
  • Managed services for campaign design and execution
  • Omnichannel customer experience design
  • Benchmarking and best practices
  • 24-hour global support
  • A dedicated customer success manager
  • Guest services to support your end users
  • Platform certification and ongoing training

We may never know if the chicken or the egg came first (my money is on the chicken), but we can be assured that lifelong customer loyalty and an exceptional customer experience go hand-in-hand. And better yet–both are well within your reach.

If you’d like to learn more about how the Punchh Loyalty, Offers, and Engagement Platform is redefining loyalty and CX for more than 200 of the world’s favorite brands, schedule a personalized demo today.