• by Karl Greenberg , December 19, 2011

What does next year promise for brand loyalty? If the recent past is any indication, it will be more of a challenge to keep consumers with brands. The loyalty marketer’s association Loyalty 360 says loyalty, not acquisition, will be the keel that keeps business right side up.

The organization, in a report, says that identifying loyalty solely with its adornments (points, discounts, miles, rewards) is a mistake. The group says processes, technologies, ideas, and interactions are what it's about. "The only way to achieve loyalty is through deeper engagement." But Loyalty 360 says businesses are faced with challenges fueled by digital coupon sites like Groupon.

"Customer loyalty has been identified as the top non-financial business challenge facing companies in 2012. While daily deals like Groupon, LivingSocial are generating lots of buzz, marketers are realizing that these price-based technologies have taken their focus away from the real prize: customer loyalty," said the organization.

Far from the bling of points and rewards, the real loyalty driver is customer service and positive experience at all touchpoints -- but especially at the call center. Loyalty 360 reports that a recent poll it conducted found that 78% of respondents believe that having a great customer experience makes them loyal. "Creating this type of customer experience involves delivering quality customer service across all touchpoints, and marketers are realizing that this means integrating the call center into the overall customer experience," said the organization. But, warns the organization, engagement can't end with purchase, but must continue over the life cycle of the product or service. 

Going forward, marketers will use location-based behavioral data and attitudinal and preference data to figure out when and where to offer daily deals, Loyalty 360 predicts. Brands should control the message, "Rather than offering such huge discounts to anonymous individuals," it said.

And brands will use data on customer buying patterns generated through loyalty programs to create more targeted marketing/messaging, meaning more personalized marketing. The firm also said marketers will look to recommendations and referrals to persuade customers and prospects to follow their friends' leads. Thus, companies will be more active in doing things like encouraging reviews, and implementing refer-a-friend programs.

Finally, cause marketing is going to have more influence on customer loyalty to brands. Loyalty 360 cites a study that said consumers are more likely to pick a brand based on charities or causes it supports, and that 94% of responding consumers said they would abandon their typical brand for one of approximately equal quality and price if it backed a social issue.