The Great Lockdown came into effect across the world in March 2020, following the global COVID-19 pandemic. The magnitude and speed of collapse in activity that ensued is unlike anything experienced in our lifetimes. As the world collectively went indoors, customer spending plummeted and is not expected to return to normal growth levels anytime soon.
In a pre-COVID world, across all industries and geographies, business-as-usual meant customers were spoiled for choice – and switching brands was easy. Measurable loyalty was achieved though rational incentives (promotions, discounts, reward points) and ease of use (redemption benefits, multichannel presence). Engendering emotional loyalty, while acknowledged as a critical goal, was still a tall order.
However, as customers spend lesser and seek trusted brands, emotional loyalty as a principle of driving repeat, profitable business, is worth exploring.
Transactional loyalty is not enough
It is well established that customers rely on emotions to guide their decisions, even in the face of a barrage of information. Today, when customers become hyper perceptive to brand messaging, tone and purpose, it becomes necessary to establish an emotional connection first. Now more than ever, the scope of customer loyalty should now expand beyond transactions.
An approach to engendering emotional loyalty
Following is a 4-pronged approach that brands can take to drive emotional connect with their customers and a larger potential audience -
Empathize – As people feel vulnerable, empathy and commitment are two ways that will bind them to a brand through trust. Customers acknowledge and respond to positive and inspiring content that calls for acknowledging the social, financial and other realities of this pandemic. Therefore, messages sent to customers should be humane and include health, empathy, courage and humility to project reassurance and relevance.
E.g. – Marriott extended its elite status category on points earned for a year due to suspended travel and hospitality during the COVID crisis. This move applied to all status levels, including Silver, Gold, Platinum, Titanium and Ambassador – counting towards lifetime status in the program. Subsequently, Marriott Bonvoy guests turned to social media channels to applaud the flexibility that the program gave them during these turbulent times.
Educate – Act as an information agent, by transforming the brand’s authority and media presence into reliable information. Brands should inform people about the crisis, how to protect themselves during it, and the progress being made to fight against it. Given the prevalence of fake news, consumers are looking to the brands they trust to provide the straight story.
E.g. –BigBasket (a grocery ecommerce firm in India) reached out to customers over social media daily with updates on lockdown scenarios and how this impacted their delivery operations. Likewise, Harvard University launched a free online class for Mechanical Ventilation for COVID-19 to provide all medical professionals with an understanding of mechanical ventilation.
Engage – Bring people together by facilitating community connect and providing social support. We have witnessed high social engagement with customer support, instant replies and conversational commerce being rapidly adopted during this pandemic
E.g. – In May 2020, YouTube India hosted ‘One Nation At Home’ digital event for the country’s fight against COVID-19. The digital event featured over 100 creators, artists and celebrities livestreaming from their homes.
Evolve – Evolve your products and services. This can be through offering new schemes, new modes of usage and better pricing – all towards creating brand culture and inculcate endorsement. Such efforts will have resounding effects on customer memory, and in turn, for loyalty.
E.g. Physical retailing of vehicles is now moving to digital channels and avenues to facilitate customers who are home bound. Toyota Kirloskar Motor has made provisions to entirely digitalize the sales process wherein the customer can take a virtual tour of the vehicle, select financing options and even receive a quotation online. The firm is also exploring options to deliver the vehicle to the customer’s doorstep upon the completion of purchase.
Integrate emotions with transactions to track true loyalty
For this approach to be successful, brands need to augment their traditional loyalty programs so that they trigger emotions and not just transactional behavior. Additionally, such a transition is not complete until performance measurement equation of programs brings together both; and the convergence of the two helps identify a richer view of customer behavior.
Tracking and measuring results which touch on both traditional ways of measuring transactional loyalty and new metrics for emotional loyalty can identify drivers for customer connections. Some of these metrics include:
a.Transactional loyalty metrics to identify loyal actions – and demonstrate tangible business results and monetary/budget gains E.g. Repurchase rates, Customer lifetime value (CLV), Share of wallet, Propensity to churn and Realized advocacy
b. Emotional loyalty metrics to identify loyal feelings – and help companies uncover customers’ motivation. Subsequently, firms should track metrics that gauge intent, sentiment, perceptions, and scoring of customer experience. E.g, Net Promoter Score (NPS), Customer satisfaction and Sentiment scores and analysis
Some potential benefits of this loyalty performance measurement approach:
a. Better customer segment profiles with signals on drivers of loyalty
b. On an ongoing basis, establishing the effect of short-term loyalty tactics on true customer loyalty (behavior + emotion)
c. Inculcate a culture of evaluating both emotional and behavioral responses to loyalty initiatives
Over the last few weeks, the pandemic has given brands a once in a lifetime opportunity to rethink how they build trust and true loyalty. However, this comes with a need to revisit value propositions, delivery mechanisms and how results are measured.
Brands must not only seek to increase share of wallet, but also enhance share of mind and heart. Ultimately, adopting an approach that appeals to changing values will result in a profitable, and perhaps much-needed revival of businesses.
-The author is lead market insights consultant, Epsilon India. Views expressed are personal.
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August 10, 2020 at 10:47AM
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Emotional pathways to customer loyalty in a pandemic world - ETBrandEquity.com
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