If your customer retention strategy relies on buying loyalty with rewards, rebates or discounts, it is coming at a high cost. And these days, it could also mean that you’re giving up something priceless: your relevance. That’s because the loyalty era of marketing, as we’ve known it, is waning. Instead, in this new era of digital-based competition and customer control, people are increasingly buying because of a brand’s relevance to their needs in the moment.
Source: Harvard Business Review, March 21,2018. Link.
To become a kind of living business, with a new understanding of customer needs, we need a new definition of relevance beyond the traditional four P’s of marketing: product, price, place, and promotion. Companies should expand their thinking to include the following five P’s as well: purpose, pride, partnership, protection, and personalization.
INSIGHTS: No doubt many will poo-poo the concepts in this article. If we are in a transition away from loyalty, animal health marketers and leadership need to make some radical changes in how we approach our business.
Building loyalty is not solely based on providing rewards, rebates or discounts. I agree that if your loyalty strategy is SOLELY based on these three items, you’re in trouble. Building relevance can lead to loyalty. A practice must work hard to provide the best care and service- to elevate their practice above providing ‘satisfactory’ service. A satisfied guest is not a loyal guest. Loyalty can be achieved many ways, but discounting and rewards are monetized. If someone is solely looking for the lowest price (via discounts or- long-term via rewards) then they are likely to leave your practice when a more attractive offer is found. If a practice focuses more on providing outstanding service and care, satisfied clients are more likely to become loyal clients- and then the rewards become nothing more than an added benefit- and they are less likely to seek bigger discounts.