Customer Experience Is the New Loyalty. Or Vice-Versa? Or Both?

Customer experience, like customer engagement, is a term that defines the white-hot space right now for marketers, much like CRM was in the late 1990s and early 2000s. But things are different now, as we live in what is described by Forrester and others as “The Age of the Customer.”

In this Age of the Customer, we have accelerated past the prime of mass marketing and, fortunately, there is no slowing down. Customers want (and increasingly expect) relevance, given the data they share with brands, the scarcity of their time and the transparency of pricing and quality and, of course, their ability to do what they want and when they want in terms of consideration and purchase. They realize the value of (their) data and expect brands to do something smart with it. Without it, they will not engage; or at the least, will disengage abruptly, and often permanently. As Gartner recently reported: 

“Customers will not tolerate companies that have amnesia when it comes to remembering them and their preferences for recognition.

[They] ...believe that they have a relationship with a provider once they have transacted with that provider...the experience should be mutually beneficial, and therefore designed with them in mind – similar to most relationships.”

 If customer loyalty starts with customer engagement then it’s fundamental to understand what makes a customer willing to pay attention to the brand. People pay more attention to you when you pay attention to them, something most brands fail to do. Brands tend to look at customers with a wide-angle lens, and still (sigh), look closer at non-customers, some of who are even considered prospects, if not suspects.

Customer experience – just like customer loyalty – is the sum total of all customer interactions, at all touch points, both online and offline, throughout the customer lifecycle. Similar, reasons to pursue a great customer experience strategy parallel those to loyalty marketing:

1. Build addressable and direct customer relationships
2. Drive organic (i.e., same customer) growth and engagement
3. Increase relevance and differentiation at the expense of mass promotion
4. Build data and insights
5. Align marketing (and other) investments with value

In a recent interview with Loyalty360, I outlined how there’s not a divide between customer engagement, customer experience and customer loyalty. The aims of each strategy are exactly the same and align with a mandate to deliver a better customer experience and recognize the appropriate differences between customers. Brands can’t be the same thing to everyone because that same thing is not going to engage everyone. Relevance for one customer is not necessarily relevance for another, especially when you consider customer lifecycle.

Being relevant, whether you’re a brand or a person, comes from paying attention to the other party.  It’s why we define loyalty marketing as paying attention to customers and acting accordingly. Does this not also apply to CX? Isn’t CX, by definition, a reflection of doing just this? We think so, without question. It’s why there is no mention of points or rewards in our definition. This further illustrates our fundamental view that the paradigm of customer loyalty needs to flip: that brands need to pay attention to and be loyal to customers rather than starting the other way around.

So, is customer experience the new loyalty? Or, is loyalty the new customer experience? Clearly, the answer is both.