Want Loyalty? Start with the Customer

My last blog post focused on creating a retail experience that drives customer loyalty beyond rewards. The bottom line is that knowing what is important to your customers and responding to their needs is better than surpasses simply offering a rewards card when it comes to building loyalty. That sounds logical, but there are many complexities when developing a program that meets the needs of the customer, card issuer, and retailer.

The goal of any customer loyalty program should be to eliminate friction points and create a positive customer experience. To do that issuers and retailers need to have the same end goal and work toward creating efficiencies wherever possible. During a panel presentation at Card Forum and Expo three things stood out with regard to enhancing the customer experience and making card programs successful for all parties: operational efficiency, authorization strategies, and keeping it simple. Here’s a quick synopsis of how each strategy sets up win/win situations for consumers, retailers, and issuers.

Operational efficiency should never come at the expense of good customer care. In fact, it can actually improve customer service when employed in ways that bring value to the consumer. For example, realtime credit card application processing and instant issuance of live plastic at the point of sale allows customers to redeem points they earn that day just for signing up and drives higher ticket sales. Additionally, automating customer initiated credit line increases produces less human error and reduces training and talk time for customer service representatives (CSRs) handling live calls. This allows more time for CSRs to handle transactions that can’t be automated or those customers who wish to speak to a real person without enduring a lengthy wait time.

These efficiencies also provide support for effective authorization strategies. If a customer does not have the credit they need for a major purchase at check out, that has to be managed effectively. Being able to authorize a sale beyond the original credit limit while the customer is at the register is one of the most powerful marketing tools available. Providing on the spot line increases through an automated process or referral to a call center minimizes customer friction and enables sales. This means the customer is happy, the retailer sells more high ticket merchandise and the issuer benefits from card activity.

Finally, keep it simple for your customers. There are numerous ways of doing this: providing online receipts to make returns seamless, keeping terms and conditions concise and understandable, and having well defined rewards programs with “no strings attached” redemption (i.e. no blackout dates for travel, no term limits on reward points, etc.). It’s also important to provide a variety of communication channels that are user friendly and accessible without a lot of hassle. For example, customers may choose to use online or interactive voice response (IVR) to check balances or recent transactions but prefer to speak to a live person for billing questions or credit line increases. One bank reported that they have had a tremendous response to keeping their menu options on their IVR limited. Nobody wants to listen to an endless list of press one, press two, stay on the line for more options, etc. Ensuring simplicity in all of these areas builds loyalty and return on investment.

There are moments of customer interaction where a good experience will create loyalty and a bad one will spell disaster. Sneak previews and early sales of new products given to rewards card holders and fast, reliable customer service are all moments of truth in building a relationship. A common theme of all the loyalty sessions at Card Forum and Expo was start with the customer. Listening to customer feedback and removing friction points are worth the investment.