Fueled by accelerated digital transformation, the COVID-19 crisis has shifted CMOs’ focus on customer loyalty into overdrive. While Forrester predicts that spending on loyalty and retention marketing will increase by 30% in 2021.
But the environment in which CMOs operate is now even more complex. Driving greater customer loyalty is a lynchpin to their company’s survival, helping them grow revenue at a time when they’re taking financial hits resulting from the pandemic and economic uncertainty. But, the typical customer motivations and expectations have changed dramatically. Where consumers once may have sought to purchase your brand for status or value, they may now think more about navigating stay-at-home orders and personal safety, how to make the most of their limited income or where to best stock up on supplies in high-demand. And it’s up to brands to figure out what offers and messages will resonate most, to drive sales and inspire greater loyalty.
What works today, however, may not be effective tomorrow because the business climate and customer preferences will continue to evolve as the pandemic wears on and we enter a recovery phase. Given all the unforeseen things that happened in 2020, it may seem presumptuous to look into our crystal ball for the coming year. But there are three predictions CMOs should take note of now, since all signs are pointing to them becoming a reality in 2021.
Generic 20% off coupons or punch cards that give a $5 discount after 10 visits are going the way of the dinosaur. Consumers expect much more from their preferred brands. The entire customer experience, particularly delivering unique, relevant offers to each individual, is what will count when it comes to building loyalty and lifetime value.
Customers must be at the center of everything a company does and every decision it makes – from leadership to strategy to operations. Rather than focusing on marketing new products and services, CMOs should focus on understanding how their marketing offers fit into the consumers’ lifestyles. Loyalty programs are a great first step in supercharging these efforts, since they help marketers learn more about a customers’ journey, their preferences and their motivations. Insights gathered from these programs and other first-party sources can help increase engagement even further by optimizing and better targeting offers.
In this new, constantly changing world, traditional marketing strategies, such as customization and segmentation, will no longer be effective. They’re too slow, require resource-intensive manual processes and are unable to reach the customer on that personal level, which leads us to the second prediction...
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CMOs are under pressure to cut costs, through hiring freezes and furloughs or slashing media spends. But one place that won't feel the pain is MarTech, according to Gartner, which found that technology spend will account for the largest proportion of marketing budgets at 26.2%. And, more than two-thirds of these CMOs expect to increase investments in MarTech in 2021.
Most companies have marketing technology, but there’s often a software gap between the commerce cloud and customer data platform to the marketing cloud to automate and optimize marketing and customer loyalty offers. In order to work smarter and more efficiently, a strategic investment in advanced marketing technologies can help achieve that level of automation and marketing efficiency not possible with traditional, manual processes.
The application of artificial intelligence (AI) and machine learning (ML) is resulting in greater, and more intelligent automation in marketing. Increasingly CMOs are using AI and ML to quickly and continually ingest data, gather insights about customers and tailor offers for each individual. We expect that marketers will quickly move from simple automating the obvious tasks to hyperautomation that is poised to completely reinvent business operations.
Investments in technology – particularly AI, ML and automation – will be the foundation for the future, and important in achieving success in meeting customer retention and loyalty goals. These are powerful tools that enable greater the agility and flexibility required to adjust to changing customer motivations and market conditions.
AI extracts insights into customer motivations and preferences, and automates the process of collecting relevant data and refining offers for greater engagement. ML helps identify the best promotion to send a customer, and the optimal time to send it. Automation further speeds the process, giving marketers the power to easily experiment, fine-tune and deploy offers on-the-fly, which will increase engagement and loyalty through better targeting and greater relevance.
The data resulting from these processes can also help CMOs map their marketing investments and execution to their customers journeys, ensuring that marketing dollars are spent wisely and deliver results that are meaningful to overall business goals.
For the past year, brands have had to contend with one unexpected event after another – from a pandemic that fundamentally changed the way they do business, both in stores and online, to an uncertain economy that is altering the way consumers shop and what they’re willing to spend. Those companies that put the focus on their customers by enhancing loyalty and improving retention, leveraging technology to become more agile, will be better positioned to weather the volatility and handle whatever may arise in 2021.
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