We invited Emily Collins, Principal Analyst at Forrester Research Inc, to participate in a Q&A on the topic of emotional loyalty following our recent webinar, "Let's Get Emotional: How To Build Better Relationships With Your Customers."
Q. How can brands use the data collected in loyalty programs to create emotional connections with customers?
About half of consumers that enroll in loyalty programs agree that they are already loyal to the brand. Brands can use the data they collect from those customers -- as they interact as loyalty program members across touch points -- to build a better understanding of customer behavior, needs, and motivations. Customer analytics methods like customer lifetime value analysis, behavioral segmentation, and propensity analysis provide deeper insight into loyal customer behavior. On the emotional side, market insights and voice-of-the-customer (VOC) feedback provide insight into customer sentiment, satisfaction, and likeliness to recommend. Together, these insights help brands understand how their program and communications make customers feel and act. And, they can use them to fine tune loyalty program content, offers, and experiential benefits, in ways that better resonate with consumer desires. The data from loyalty programs provides marketers with the context they need to deliver more relevant and emotionally resonant content and experiences.
Q. Are emotions a greater driver of brand loyalty than rational drivers such as price or convenience?
Not necessarily. US online adults list free shipping and the final price as the most influential factors in determining which retailer they will shop with online. But, when considering the customer experience, Forrester's research shows that how customers feel about their interactions with a brand has a stronger correlation to loyalty than the effectiveness -- the value delivered -- or ease -- the degree of difficulty in getting what they need -- of those interactions.
Q. Which emotions have the greatest influence on loyalty?
The exact emotions vary by country and industry, but in the US, six positive emotions most often create loyalty across all industries: appreciated, confident, delighted, happy, respected, valued.
Q. What are the brand expectations from emotionally engaged customers?
Forrester defines empowered customers as those who are open to new experiences; show increasingly advanced device behaviors and digital expectations; can easily seek, evaluate, and share information; and are willing to take ownership of their decisions to ensure the best possible experience. It's no longer enough to just offer the products and services a customer is looking for because empowered customers buy experiences. And, the distinction between digital and non-digital is dissolving: consumers engage with brands that deliver what they want, when they want it, regardless of the delivery mechanism or channel. Fueling these escalating expectations of interactions with brands? Adoption of emerging technologies, device and touchpoint proliferation, and the interactions they have with companies like Amazon, AirBnb, Apple, and Google to name a few. But, resonating with empowered consumers is complex and messy. Customers have unique emotional profiles, tendencies, and preferences that shape their expectations and how they feel about and interact with a brand. To better understand how empowered consumers want to interact with their brands, marketers must expand their notion of customer understanding from past behavior and demographics to include their needs, motivations, and expectations too.
Q. What can brands do to measure and optimize emotional connections with their customers?
Measuring emotion helps companies uncover customers' motivation for action — such as convenience, routine, or true love. But the relationship between emotional and behavioral loyalty may not be a direct correlation. In other words, increasing emotional loyalty won't always translate to an immediate increase in behavioral loyalty. To measure and optimize emotional connections with customers, companies must be able to how behavior and emotions affect the other. First companies need to identify a set of loyalty metrics. Companies often rely on proxies like NPS, CSAT, and sentiment scores to gauge intent, sentiment, perceptions. Then, they must determine whether or not the metrics they've chosen are reliable indicators of success. Regression analyses can help uncover the relationship between behavioral KPIs and emotion metrics. To ensure that the relationship is improving over time, marketers have to move past point-in-time measurement. In addition to tracking the immediate impact of loyalty program adjustments or offers, incorporating trend lines into measurement dashboards helps visualize the impact of loyalty efforts on the customer relationship over time.
Watch the playback of "Let's Get Emotional: How To Build Better Relationships With Your Customers." here.