Major risks to business loyalty in 2021
With businesses under relentless pressure amid COVID-19 lockdown restrictions and battling to remain intact, the need to minimise risk and continue operating has never been more important.
To help business owners navigate through daily challenges, maintain service levels and roll-out effective loyalty programmes, LoyaltyPlus has identified several key risks in 2021.
The leading independent customer relationship management company says being aware of risks is the first step in successfully avoiding them.
One of the main risks is poor use of data and non-effective communication. With most companies embracing digital infrastructure, including artificial intelligence, the cloud, machine learning and robotics, information flow is vital to all processes – including business-to-consumer interaction.
If communication is outdated, unclear, delayed or non-relevant, the customer will be put off and look elsewhere – quickly! If information around loyalty programmes is inaccurate or employees of a business are not informed or aware, the impact to the business would be worse than not having a loyalty programme at all.
The fact is that the customer is fickle and spoilt for choice. Customer service and experience is essential and that is why loyalty programmes have to be flexible, and must provide value upfront – before payment. The customer experience begins from the first touch-point and continues to the last, says LoyaltyPlus, so kicking off the journey on the wrong note or not quite the right approach is most definitely a risk.
ICF.com lists several criteria that brands should aspire to when engaging the customer. These criteria include learn (expand knowledge), connect (create local connections), create (bolster creativity), build (design experiences to encourage personal growth) and pause (focus on wellness), which, together, help drive and manage professional and successful customer experiences.
It is very interesting to note that KPMG International research shows that consumers’ attitudes about finances are unchanged since the outbreak of the COVID-19 pandemic. The financial advisory firm says in July and August 2020, 76% of consumer and retail CEOs are more confident today about the economy than they were before the pandemic.
Another pitfall for businesses as they attempt to woo the customer, increase their customer retention rate and boost the business, is to get too hung up on finance, profit, more foot traffic and other aspects. Cost is always a factor and must always be considered, but trying to balance the books and minimise cost and sacrifice service quality is simply not a winning formula.
As LoyaltyPlus explains, businesses often trip themselves up by making their loyalty programmes mundane and one-dimensional. Failure to make a programme stand out in a market awash with loyalty and reward schemes is a recipe for disaster.
Risk is part of any business in any industry, but in today’s broader financial and economic environment, loyalty should be a major tool in the arsenal of any competitive venture – and not something that attracts any more challenges.