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The Symbiotic Relationship Between CX and Loyalty

Customer experience (CX) and loyalty have a symbiotic relationship in which the possibility exists for each to have a positive or a negative effect on the other, according to marketing experts. "Customer experience is critical for keeping customers, especially when you see that 25 percent of customers say they'll leave a brand after just one bad experience, says Ross Paquette, chairman and CEO of Maropost. "All that being said, CX is a moving target, not a silver bullet for loyalty — you can't expect a one-off CX push to solve your loyalty problems." Even if you were on the cutting edge of CX six months ago, changing technology, touchpoints and customer expectations could potentially leave your business in the dust.

"Here's where CX for loyalty gets tricky," Paquette adds. "The better you get at CX, the more your customers expect from you — making it harder to gain their loyalty. You can't just meet customer expectations to drive loyalty — you need to constantly exceed them. And to do that, you need a full 360-degree view of your customers — across every interaction, environment and journey that goes into creating a customer's experience."

Some businesses — like airlines, financial services and retail are very loyalty driven so they are the first that need to put CX at the front of every business decision, says says Anoma van Eeden, CMO of Relay42, a marketing technology platform designed to drive customer loyalty through better CX.

CX Goes Beyond Marketing

"Customer-centricity with a view to building customer loyalty must extend beyond the marketing department, and therefore far beyond what we traditionally call CX design," she adds.

Many companies — such as Starbucks, Nordstrom, United Airlines — have extensive and popular loyalty programs, points out Nancy Porte, vice president, global customer experience for Verint. "But consumers aren't easily wooed by discounts and points. Simply adding a loyalty program to a bad experience won't help a business succeed. CX is the new marketing, which we call "Marketing 2.0."

But to truly succeed and build loyalty, CX has to extend into several areas beyond marketing or loyalty programs, van Eeden says. "A customer's journey with your company doesn't stop when their interaction with your marketing communications ends — and businesses that cannot successfully serve their customers with the same level of personalized attention while they interact with the actual service risk displaying an even more egregious lack of customer-centricity than not personalizing at all in the first place."

To ensure they meet the CX expectations, it's essential that the company have the customer's data at hand to serve their next need and keep them loyal once they leave traditional (digital) CX territory, van Eeden adds.

That data can help provide the seamless experience needed for excellent CX and loyalty, says Adeline Heymann, senior director of loyalty experience at Kobie Marketing. "Consumers have come to expect a personalized, seamless experience across all touchpoints and at every stage in their shopping journey — regardless of channel. Our research has found that they are drawn to convenience and rewards in loyalty programs, or they won't bother joining the program. It's about taking your loyalty strategies to the next level and creating an experience for the customer that removes common pain points and makes their lives easier. Understanding and designing a great customer experience is the foundation to successful loyalty initiatives."

Those loyalty initiatives are changing, says Donnie Fairbanks, HelloWorld senior director of strategic services. "Loyalty has become more consumer driven. The consumer is more in control of the relationship than the brand. So, consumers expect the brand to deliver on CX, or they will feel that the brand doesn't care about them — loyalty is driven by the customer experience."

And the data derived from loyalty programs can help improve CX, Fairbanks adds. "Data from a loyalty program is like a river feeding the large data lake that an enterprise has. That lake feeds back into the river of the customer experience."

Heightened Future Expectations

Both loyalty and CX are increasingly data dependent — to deliver the right offers, the right messages with the right frequency and to meet customer expectations. The data analysis and usage for CX and loyalty will continue to be refined, but that will also put the onus on marketers for continuing improvement, says Paul Gottsegen, EVP, CMO and Americas region head for Mindtree.

"Due to the rapid advancements in personalization, we're seeing a major inflection-point in how effective loyalty programs can be. With the right technical architecture, loyalty can dovetail at every online and offline touchpoint along the customer journey. Ongoing customer interaction, matched with smart data algorithms, increases the contextual relevancy of the loyalty experience. As the offers and rewards become more compelling, it sparks a further acceleration of customer interactions in what becomes a virtuous cycle of deeper engagement and brand trust," Gottsegen said.