Top 5 Trends: Delivering dynamic customer engagement

Contents page

1. Mobile prevails 4

2. Customer experience in 6 all areas

3. Marketing to Millennials 8

4. Data as currency 10

5. Evolution of loyalty 12 programmes

6. In summary 15

The always-on customer is constantly being presented with more and more channels, methods and technologies to interact with brands and their journey is becoming less linear by the day. For everyone involved in customer engagement, it’s becoming harder to interpret the trends that are here to stay and to decipher which are just passing fads.

To help you conquer the complex customer battleground, we’ve put together the top five areas of customer engagement that we think you should be focusing on this year; from mobile engagement through to Millennials and the changing face of loyalty programmes.

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Customerengagementhas changed

Mobile prevails

1In the UK, 63% adults own a smartphone1 and more than 50% of the UK’s ecommerce traffic comes from mobile.2 This is where we manage our digital lives – from communication and social networking, to lifestyle management, media playback, shopping, travel, payments and productivity.

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Mobile will continue to grow as a disruptor at each stage of the customer journey.For example, let’s think about research. A customer might browse your products, read reviews, check stock levels, locate your nearest branch, search for discount vouchers, and compare you against competitors. This could happen at any time, anywhere, and in any order; from the comfort of their sofa to the train to work, and most significantly, ‘showrooming’ whilst in your store – and what they find will most likely affect their purchase decision.

Regardless of where they are on their journey, what customers want most is a streamlined, contextual experience to find information or assist in their purchase. If they don’t get that, chances are they will move on to your competitors.

Making communications effortless

A new but emerging trend is for brands to interact with consumers via messaging apps, something which is already commonplace in the Asian markets.

The recent launch of Facebook’s ‘Business on Messenger’ allows brands to send personalised order update details, delivery and customer service information to customers through the Facebook Messenger app. Whilst this is currently only available to selected US businesses, it is expected to be rolled out across the board. To us, this is common sense and gives customers a convenient place to store all of their transactional information from multiple brands.

The digital walletIn 2015 we saw the mass adoption of contactless technologies through enabled credit and debit cards, followed by Apple Pay; all of which met with little resistance from consumers.

Any smartphone enabled with NFC technology (most major smartphones) is a gateway for on-premise customer engagement and transactions, using much of the infrastructure already employed for contactless and Apple Pay technology. Loyalty cards, discount coupons, special offers, and payment methods can all be contained within the customers’ smartphone which can then be read by a till point acceptance device to link payments and loyalty activity directly to the customer.

Not only is this a beautifully simple experience for the customer, but NFC offers limitless potential for customer loyalty and data collection - and most importantly, all in real-time.

1 Source: Ofcom 2 Source: Comscore

Customer experience in all areas

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End of the online/ offline divideThe lines between online and offline are becoming increasingly blurred. As we mentioned in Section 1, many customers shop with their mobile phone in hand and brands can act on this by sending timely and contextual communications, e.g. personalised offers via iBeacons to drive on-premise sales.

Bricks and mortar stores are adopting digital technologies such as mobile payment, interactive kiosks and virtual fitting rooms, and are equipping staff with iPads to provide more efficient service to create an engaging and increasingly bespoke experience.

Personalisation

Customers expect to be treated as individuals, and personalisation extends far beyond online experiences, with new technologies empowering offline engagement. For example, Offer Moments uses iBeacons and an app to create personalised billboards on digital screens as well as on the customer’s smartphone, showing them relevant offers for nearby retailers.

The data you collect on your customers powers you to understand behaviours, preferences and trends. Develop personalised experiences from the types and frequency of the communications you send, through to delivering relevant offers and tailored product recommendations – but this needs to be done right or you risk disengaging your customers.

Gone are the days of losing a receipt, with retailers such as Dorothy

Perkins offering email receipts and John Lewis’ ‘Kitchen Drawer’

which uploads purchase details to the customer’s online account

whenever the customer uses their MyJohnLewis loyalty card or app.

Major customer-centric restructureAccording to research by Deloitte, customer centric businesses are 60% more profitable than those who don’t focus on the customer.

Our research3 found that customer data and insight is not being shared and applied throughout the whole business, resulting in decisions being made from different perspectives, with conflicting priorities.

Consumers don’t see a difference between online and offline and businesses need to evolve to reflect this. As a first priority the silos in the marketing department need to be broken down because collaboration is key – digital, offline, IT and eCommerce teams need to come together to meet customer expectations.

Becoming customer-centric may ultimately require a major business restructure. From finance to customer services, it is crucial that a culture of customer-centricity is maintained to ensure that you are an agile, customer-focused and forward-thinking business that can withstand the changing consumer landscape for years to come.

3 Source: Ikano Insight: The future of customer engagement & data driven marketing

Marketing to Millennials

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What are the opportunities for brands?Millennials are used to filtering out the ads and marketing messages that aren’t relevant to their needs, or don’t resonate with their beliefs or values. They don’t want to be sold to, and expect two-way conversations with the brands they love.

To keep up, brands need to evolve with technologies and the changing customer landscape, so it’s important to ensure that your business has a structure of agility - you need to be ready and positioned to adapt.

Millennials want their brand experience to be fun and social. Gamification is a current trend

across markets and audiences, and whilst it keeps customers entertained and engaged, for brands it keeps customers on their app or online longer and can provide deeper insight into customer behaviours and needs. There are diverse opportunities for brands to use gamification, from integration into loyalty programmes to standalone games or apps driven by customer insight.

Winning Millennial’s loyaltyMillennials are no stranger to shopping around. They are open to new brands, products and services and they aren’t afraid to switch. Seeking out the best price and service is a natural part of their shopping experience, with nearly 3/4 of them spending time online researching items before they purchase.5 Despite this, Millennials can be incredibly loyal, and 80% of them keep coming back to the brands/products they like.6

Millennials know the value of not only their money, but also of their data, and they expect to be treated as an individual because you have enough information on them to do so. Whilst they are open to being engaged and connecting with the brands they love, they expect to receive something of value in return and want to earn rewards for more than just purchasing.

Key to keeping Millennials engaged in a loyalty programme is offering them variety – take a look at Section 5 for more information. Keep your loyalty proposition fresh and interesting to keep them coming back.

Millennials have networks of social followers and will quite happily share your content with them or write reviews, but they’re wise to the power of Word of Mouth. To maintain this culture of sharing, reward them for it – it could be as simple as offering special discounts or exclusive access for sharing content, and also make sure that you resolve any issues before they become viral.

4 Source: Comscore 5 Source: Intelligence Group 6 Source: Edelman 7 Source: Marketingcharts

Who are they?Born between the 1980s and early 2000s, Millennials are the tech generation - they are used to technological change, understand it and are quick to adapt and embrace it. They are savvy shoppers, but that doesn’t mean they are of little value to brands – they spend $170 billion a year.4

Get the customer experience right, and your Millennials could be loyal for life; with 1/4 believing that they and others their age are more loyal to their favourite brands than their parents are to theirs.7

4Data as currencyDeloitte said that the global volume of digital data is expected to multiply 40 times or more by 2020. Much of this will be personal data such as location history, activities, travel, purchasing, social media activity etc. Imagine how this could shape your customer insight to build a highly accurate picture? Well, it’s not just brands that are wise to this. Consumers are increasingly becoming aware of the value of their data and are now viewing it as a currency to be exchanged for something in return.

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Digital trustDigital trust is a key element in the data currency. The notorious data hacking incidents of 2015 such as TalkTalk and Ashley Madison have created an air of caution, so brands need to remember that security, privacy and control of data will always be important to consumers. In entrusting you with their data, they expect you to treat it with the value it deserves. Make it clear what you intend

to do with their information and clearly ask for their permission, giving them the opportunity to change their preferences and opt-in or out, and ensure that you are complying with legislation. This will build trust and loyalty and the customer will begin to feel comfortable with sharing more of their data with you, strengthening your relationship and your ability to serve them.

Datacoup bills itself as the “first personal data marketplace” which can “help you reclaim and unlock the value of your personal data,” where users can earn cash for providing their anonomysed data. Whilst this is a new and pioneering development in the industry, on an individual brand level customers still expect a value exchange for granting you access to their safely guarded personal data.

5Evolution of loyalty programmesDespite what some may say, customer loyalty is very much alive and kicking. However, 93% of customer engagement professionals believe that it needs to change and evolve in response to increasingly sophisticated customer expectations around personalisation and omnichannel customer experience.8

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Customer expectationsToday, building customer loyalty is less about the psychology of collecting points, but is about engaging with customers on their terms consistently across all channels to deliver an excellent customer experience.

In the past simply rewarding customers with points could secure their loyalty, but today it is far more complex. Whilst points remain a really important part of an overall loyalty programme, in isolation they are no longer enough to secure high level customer retention.

Using data you can identify your most loyal customers and reward them accordingly, but ensure that the reward absolutely reflects their commitment and affinity to your brand. Keep your best customers happy and they will repay you over and over – not only with their continued custom, but by championing your brand amongst their own circles and further afield, both on- and off-line.

Changing rewardsCustomers no longer just interact with your brand when they make a purchase, and loyalty programmes should reflect the overall customer experience. Social media interactions, gamification, app downloads and check-ins are all areas which can and should be rewarded to keep customers engaged.

Our survey identified a key trend of moving from incentives to service.9 Whilst incentivising purchases are definitely core and essential to many loyalty programmes, customers are beginning to expect more than this. Retailers such

as Marks and Spencer, John Lewis, Waitrose and Paperchase demonstrate the movement towards mixing up hard and soft reward propositions and putting the customer more in control.

Consider engaging customers through the building up of points in order to receive better and more relevant rewards, putting personalisation at the centre of your programme. This lets you get to know your customers better, and in return the customer gets a reward they actually want and will most likely use, driving them back to you time and again.

Combine the feeling of reward that collecting points brings, with the support of softer benefits such as exclusive experiences or free gifts to provide variety for the customer and keep them interested.

8 & 9 Source: Ikano Insight: The future of customer engagement & data driven marketing

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The 21st century loyalty programme must be omnichannel and seamless. Mobile technology presents the opportunity to combine loyalty programmes, offer redemption and payment. Whilst this will take time and investment, there are areas where you can act immediately, such as reinforcing your programme at every level, both online and offline. If customers aren’t reminded at every touchpoint, any programme, no matter how well-constructed or generous, is unlikely to succeed.

Data drivenSome of our partners’ loyalty programmes have up to an 80% penetration rate! Imagine the impact on your business of being able to recognise and understand 80% of your customers transactional behaviours? Effective loyalty programmes generate high levels of customer data, which can be used in your marketing efforts to tailor and target campaigns towards individual customer groups, building relationships and engagement and driving behaviours. The beauty of this is that the results are completely measurable against your ROI.

Embrace technology to grow engagementRemember that poorly used technology could result in disengagement not only from communications, but from your brand altogether. Your investment in technology needs to match your customers - how do they currently interact with you? What would make their lives easier, and how does it deliver experiences which will increase their loyalty?

Regardless of your brand, market or audience, the customer should be central to your engagement strategy. Consistently deliver your customers with the experiences they want via the most appropriate channels, and they’ll keep coming back time and again.

In Summary• Personalisation is a necessity to build relationships and engagement through contextual targeting and brand experiences.

• Customers are becoming increasingly savvy to the value of their data and expect to be rewarded for it.

• Mobile is leading all areas of the customer journey, blurring the lines between online and offline.

• Loyalty programmes must evolve to reflect the entire customer experience and the changing expectations and behaviours of consumers.

And finally, for support, advice and best practice, just give us a call!

www.ikanoinsight.com @ikanoinsight

Ikano Insight is awesome with data,but even better at relationships.And that, ultimately, is what turns customer loyalty into a business’s success.

? Do you want to build a new loyalty or customer engagement programme?

? Do you want to improve an existing one?

? Or, do you simply want to turn customer data into actionable insight?

No matter what stage you are at with your customer engagement we have the intelligent, intuitive insight to help you achieve ROI and drive incremental revenue:

Wherever you are with customer engagement, we have the

intelligent, intuitive insight to help you achieve greater ROI and

drive incremental revenue.

For more information please contact:Barry SmithBusiness Line Manager - Partners, Sales & Marketing

barry.smith@ikano.net07551 671 8250115 850 3644