Step Five : Loyalty
In our last article we looked at how consumers and employees select your brand - where emotion and thinking lead to action. So what happens now?
In our Brand Engagement Pyramid we want them to move up to the next level and become loyal to the brand and company. Think of it as a relationship - in Step 4 they went on a date, but in Step 5 they’re ready to be exclusive...
STEP FIVE : LOYALTY
When your customers or employees are loyal, it means they are not easily swayed to stray to other brands or companies. This has a dramatic effect on the bottom line and business performance. Let’s unpack that…
In a survey conducted by Invesp the impact on business was quantified:
It costs five times as much to attract a new customer than to keep one.
44% of companies still place more value in acquiring customers with only 18% focusing more on keeping customers.
Only 42% of companies can accurately measure the lifetime value (LV) of their customers.
The chance of selling to an existing customer is 60-70% while the chance of selling to a brand new customer is between 2-20%.
Similarly if we look at your Employee strategy, and the cost of staff turnover:
It is estimated that the cost to replace an employee is up to 33% of their annual package.
There is the actual cost of advertising, recruitment fees, training, onboarding
Then there is the opportunity cost of losing an employee who has company knowledge and IP, relationships, and momentum.
It can take up to 6 months for a new employee to get up to speed in the job.
There can be no doubt that ensuring loyalty has short- and long-term benefits to the business and the bottom line. In fact it has been quantified that increasing customer retention rates by a mere 5% can increase profits by 25- a whopping 100% according to the Harvard Business Review.
So how does a company create that loyalty?
Customer Loyalty - practical steps:
Determine your CLV (Customer Lifetime Value)
Allocate a portion of that value to retention programs and investing in your Customer Experience (CX)
Ensure that you are communicating to existing customers regular through channels such as email, advertising, blogs, mobile messaging and apps
Engage in regular customer research to ensure that you are always on top of your customers wants and needs
CASE STUDY: Amazon Prime
We can scarcely remember when Amazon only sold books. When they did they were pretty good at it, and grew a massive global customer base. Flash forward to today and Amazon has commandeered our share of wallet across e-commerce, streaming entertainment and music. It also boasts one of the best loyalty programs in the world - Amazon Prime.
For a mere $6.99 a month you get unlimited free shipping, Prime Video (streaming of curated and Amazon created content), Music Prime (over 2 million songs for you to stream along with thousands of music stations), Prime Reading (over 1000 e-books) and much more. You also get access to the super-shopping experience that is the annual Prime Day.
You have to wonder how Amazon makes money when you get all this for about the price of a fancy coffee.
Well, Jeff Bezos and his team are some of the smartest marketers on the planet. In creating Amazon Prime they have secured the loyalty of millions of customers (147 million in the US alone) - the figures speak for themselves:
85% of Prime customers visit Amazon weekly, versus 56% of non-Prime customers
One study shows that Amazon Prime members have an average spend of $1400 a year on the platform whilst non-Primers spend $600
Want to know how much Amazon Prime Day brought in globally this year? $11.19 billion!!)
Employee Loyalty - practical steps:
Make sure your values are clearly defined, and clearly communicated. Ensure that everything you do as a company aligns to those values (see Step One for on this).
Listen to your employees - you may not always want to hear what they say, but you need to understand exactly what the general sentiment is around the company, the brand, working conditions and management.
Once you know, do something about it. Be sure to be transparent and engage your employees on all issues - this will foster trust
Recognition and growth are two of the most powerful things a company can give to an employee. Set clear career paths, reward and recognise good performance.
Listen to employees who do leave. They may be give you insight your current employees don’t
Be a custodian of your company culture. Culture needs to be managed and nurtured. Ensure that everything you do is in line with the company values.
Create benefits that enhance an employee’s life beyond a salary: free yoga sessions, dog friendly environment, summer hours, flexible work hours, social events.
Be socially responsible and community oriented. Commit to diversity and inclusion.
CASE STUDY: Xero
New Zealand fintech startup Xero is only 12 years old and has experienced fantastic growth. The company prides itself on its culture and this year has made the ANZ “Best Places to Work” list.
This is no accident. Xero leadership has carefully designed and nurtured their company culture to make it a place that staffers love to work, and an employer of choice.
Acknowledging that people have lives and priorities outside of work, they centre their flexible working arrangements around personal choice. Staffers are encouraged to adjust their start and finish times as fits them best, and to choose when to work from home.
With an ethos of “Bring your whole self to work” they promote diversity and inclusion, encouraging everyone to be themselves by offering a safe, non-judgemental environment.
In a key signal to their staff that they matter, Xero appointed a Global Head of Wellbeing last year, and established a number of initiatives aimed at making their staff happy, healthy and engaged. A new wellbeing hub, lifestyle leave and an extra day of Wellbeing Leave coinciding with Mental Health Day for all staff, has shown that they put their money where their mouth is.
Nicole Reid, Chief People Officer says “Our inclusion is a result of our achievements and innovative practices in three core areas: flexible working, diversity and inclusion, and employee wellbeing...
As we continue to expand our teams globally, we want to make sure our #human value is reflected in everything we do. We believe the above elements are not only critical to making sure Xeros are motivated and engaged, but will give them the tools and support to do the best work of their life.”
For an overview of our complete 7 step process click here .
Dovetail Brand Engagement are the first company in Australia (and maybe the world) created to specifically align your most powerful assets; your employees and your brand. HR and Marketing working together towards a single vision will create a greater value and brand equity for your business. Dovetail, can help you reap the benefits of targeting multiple markets with the right strategy for the right target market. More >