As companies continue to make significant investments to become digital enterprises and harness all the data generated by people, their activities, and the billions of “things” connected to the Internet, customer loyalty programs must evolve to provide new digital services.

As companies continue to make significant investments to become digital enterprises and harness all the data generated by people, their activities, and the billions of “things” connected to the Internet, customer loyalty programs must evolve to provide new digital services.

You (the customer) are the essential participant in this new “Digital Industrial Economy.” In fact, this whole digitalization effort absolutely requires your digital representation to work. Your digital representation is already being gathered implicitly and sometimes explicitly, and yours may already be vaguely outlined or even painstakingly detailed.

Customer Loyalty In The Digital Industrial EconomyBuilding Loyalty By Helping Customers Digitalize Their Lives

Craig TemplinBusiness Director

Practical InSights

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This customer information is vital to effective personalization campaigns, which are even more important when you are mobile- and your time as well as your ability to interact with the device is significantly limited. Now as we are evolving from the Mobility Era to the Era of Ubiquitous, Wearable Computing effective personalization is critical as your time and your ability to interact with the device is further constrained because you are interacting while you are doing something else.

For years Gartner has been preaching that leading companies are taking advantage of the convergence of social, mobile, cloud and information forces (the “Nexus” dynamics) to create innovative products and services, reaching new customers in new contexts so they aren’t displaced by their competitors.

How does a company go about understanding the subtle relationships between customer behavior, sentiment, history, location and intention and then adjust to the prevailing trends without uprooting business models and system architectures?

What modernizations of systems, skills and mind-sets must be undertaken to get there?

Starting with the obvious: nobody knows the customer better than the customer! That also applies to their behavior, sentiment, history, location and intention relative to any given company and associated products. As stated by Gartner¹, it is this customer “understand-ing” that distinguishes the leading compa-nies; therefore it is of great value and worthy of extra effort to obtain it. Simply put, the best way for a company to get this understand-ing is to ask the customer to provide it. Cus-tomers are also busy keeping pace with the digital world, therefore they are not going to want to give up this information unless two conditions are met (a) they get something in return, and (b) it does not take any significant amount of their time or effort.

Thus, these two conditions represent key design criteria for the new customer loyalty digital service. A loyal customer is a repeat customer. For a company that may have hun-dreds, thousands, or hundreds of thousands of products a loyal, repeat customer has likely purchased many things from you. All these purchases means you have a LOT of infor-mation. If a company can give its customer a way to organize, control, retrieve and use this information, then that is of significant value to the customer and the first condition is met.

Breaking down the constituent elements of customer “understanding” relative to items a company offers we get the following: behavior (items the customer has looked at); sentiment (items the customer likes or dislikes); history (items the customer has bought or returned in the past); location (customer locale relative to the closest item); intent (items the customer plans to buy or return in the future).

To facilitate the requisite data gathering, a company can strike an agreement with its customers by which the customer can relatively effortlessly: sign up for an account, register for a loyalty card (and/or ID number), and then provide this loyalty ID upon purchase of new items. In return, the company provides the customer with a variety of value-added digital services including: purchase history of all in-store and online purchases; on-line tools to organize/categorize/denote the inventory of both items purchased from the company (or any other items scanned in); on-demand retrieval of any of the data stored; create shopping and wish lists of items desired for future purchase; set re-minders to buy recurring items; simplify returns and more.

Customers and companies both win in this scenario as these new loyalty digital services save the customers time and help to manage their digital lives. In turn, these services help the business to thrive amongst its competitors.

For a company that may have hundreds, thousands, or hundreds of thousands of products a loyal, repeat customer has likely purchased many things from you. All these purchases means you have a LOT of information. If a company can give its customer a way to organize, control, retrieve and use this information, then that is of significant value to the customer, and the first condition is met.

‘Customers are also busy keeping pace with the digital world, therefore they are not going to want to give up this information unless two conditions are met (a) they get something in return, and (b) it does not take any significant amount of their time or effort.’