The Keys to Customer Loyalty
In a conversation moderated by Progressive Grocer Editorial Director and Associate Publisher Gina Acosta at PG’s Grocery Impact event earlier this month in Orlando, Fla., Diana Medina, VP, product marketing at software provider Inmar Intelligence and Dana Paris, chief commercial officer at flavoring and beverage-enhancing company Jordan’s Skinny Mixes, discussed how to maintain customer loyalty in a dynamic economic environment.
“I think where brands are able to really stand out with consumers is when the consumer finds a brand that really aligns with their values, and they can deepen their relationship with the brand,” noted Paris. “They have an ability to connect with them, create a sense of community, and that’s where I think brands can really stand out and strengthen their brand loyalty.”
Medina pointed to the three variables that Inmar’s research has found are universal to all consumers, although they tend to shift in terms of priority: time, money and mind share. “We try to think about the struggles that the consumer has to go through in those three aspects of their purchase decision-making process,” she added, “and obviously, under very challenging economic times, that money component has been kind of top of the list for consumers. … We’re also very constrained when it comes to time, and then that mind share aspect is we are all bombed with a number of messages everywhere we go. … So really solving for those three elements of how you make decisions is what we find is critical to engage the consumer and what’s driving their behavior today.”
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Asked what loyalty means now at grocery retail, Medina replied: “A true definition of loyalty should be based on what we believe is going to be ultimately the most relevant experience for that consumer that is going to allow us to build that relationship over time. That could come in the form of savings or rewards, but … there are many other factors that build that loyalty. It could be through storytelling, it could be through brand experiences, it could be through quality of the products. So, we do see shifts in how retailers in particular are thinking about their loyalty strategies and how they’re shifting their focus from purely rewards and discounts to more of that experience and holistic view of the shopper to deliver experience that is more relevant across all points of the interaction.”
Paris agreed that loyalty has evolved from “a much more transactional focus” – spending a certain amount to get rewards, for example – to something much deeper involving personalized experiences. “Now we’re in this world where we can really let our consumers in and get to know us,” she said. “Our consumers feel very connected to us,” especially on social media.
Expanding on that topic, Medina noted: “Ultimately, the way you can effectively measure if you are doing your part in terms of personalization is seeing that engagement over time and trying to understand if you’re changing behavior based on those personalization strategies that you are applying.” She added the “next generation of personalization is how quickly we can adapt to … small changes in behavior that we can identify, and how we capitalize on them to continue to grow that relationship.”
Personalization has its challenges, however. As Paris pointed out, “We’ve been collecting all of this data over the last 10 to 15 years, or longer in some cases, [and] we’ve always had the end goal to personalize the message, personalize the content, personalize the offers. … Where I think CPG has fallen flat is there’s so much data and it’s really hard to react on the turn of a dime, because we can’t create all the content.” The solution to this, she posited, consists of machine learning and AI content generation.
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“I think for promotions in general and the value message that we want to deliver to consumers, really understanding where they are, that purchase cycle, is extremely important,” said Medina, offering the example of deploying machine learning to offer someone who has just purchased a meat stick a deal for a drink to go with it, rather than ads for more meat sticks.
For her part, Paris responded: “Our retail partners are not in the same place where we are with our … e-commerce site that we can incentivize in different ways. … We haven’t figured out how to partner together and share that [granular] level of data.”
As for hot innovations in this space, Medina offered: “One of the biggest trends that we see and we hear from all of our retail partners on this topic is how do we utilize digital tools, applications or websites or social media channels, to drive overall engagement, not just online, which was the focus for a long time, but also how do we utilize the digital tools in the store as people are navigating, as people are going through the experience, how do we leverage those tools to innovate around the education of that consumer? … I believe that where most of that innovation is going to come in the next few years is infusing that digital experience into the in-store experience.”
Added Paris, “I think retailers that are thinking about your share of phone [through texts, emails and app notifications] are really thinking about your share of mind, because let’s face it, how many times are we looking at our phone every single day and intercepting consumer behavior and thinking through that device?”
Musing on emerging trends poised to disrupt loyalty, Medina pinpointed three items: “I think loyalty is going to tend to go more towards truly rich brand experiences outside of just savings. It could be storytelling, it could be early access to product releases, it could be education, participation in events. I think there’s going to be a lot more focus on those elements. I think technology-wise, we’re going to see a lot more emphasis on predictive analytics and how we use data to predict the next action and anticipate and proactively address what the consumer is going to be looking for. And then the third thing I would say is a lot more choice for the consumer and how they want to take advantage of their rewards.”
The future of loyalty looks exciting, with Inmar and savvy CPG companies like Jordan’s Skinny Mixes at the forefront of change.
