Top 3 Challenges Today’s Businesses Face and How to Solve Them

Top 3 Challenges Today’s Businesses

Customer loyalty technology and retention strategies have existed for a long time. Businesses embraced these in a big way throughout the 2008/2009 recession, in part because focusing on existing customers is one effective way for organizations to weather uncertain times.

Since the recession, companies have continued to implement loyalty solutions, yet many are still uncertain about the value. Most programs are designed to increase transactions in the short term. While loyalty solutions can certainly achieve this goal, enterprises are missing out on three strategic ways loyalty can propel them forward.

Customer Loyalty Technology Gets Strategic in 2021

Fast forward to 2021. Loyalty technology and strategies are hot again. Even the biggest brands are leaning on loyalty’s proven success more than ever.

Why? Because loyalty solutions solve some of the most pressing challenges organizations—whether they’re B2B, B2C, or B2B2C—are dealing with today.

3 Business Challenges that Loyalty Helps Overcome

There’s a reason even big brands like Starbucks and McDonalds have integrated loyalty into their strategic growth strategy. Here are three key challenges that are top of mind for most executives and how loyalty can play an essential role in resolving them.

Delivering Omnichannel Experiences

People have been talking about the importance of delivering omnichannel experiences for decades. But the reality of how many organizations are actually pulling it off is a different story. The acceleration to digital has resulted in organizations making quick technology decisions only to find out that many of them don’t play well together if they communicate at all. For example, companies are offering gift cards that can be applied on their ecommerce website but can’t be accepted through their POS and vice versa.

Solving this challenge can have a direct positive impact on the bottom line. These compelling statistics speak to how significantly it could transform your growth.

  • Omnichannel shoppers have a 30% higher lifetime value than those who shop using only one channel. (Source: Google)
  • Companies with extremely strong omnichannel customer engagement retain on average 89% of their customers, compared to 33% for companies with weak omnichannel customer engagement. (Source: Aberdeen Group)
  • Companies with extremely strong omnichannel customer engagement see a 9.5% year-over-year increase in annual revenue, compared to 3.4% for weak omnichannel companies. They also see a 7.5% year-over-year decrease in cost per contact, compared to a 0.2% year-over-year decrease for weak companies. (Aberdeen Group)

Customer loyalty technology, especially one like Annex Cloud’s Loyalty Experience Platform™, easily integrates across an organization’s infrastructure, allowing for data, communications, offers, promotions, and gift cards to be delivered seamlessly across any channel and technology.

Pivoting from Reliance on Third-party Data

It’s no secret that third-party cookies are going away. Brands have been relying on third-party data for their customer acquisition efforts. In fact, McKinsey & Company reports that more than 80 percent of ad revenue is dependent on third-party targeted ads.

Third-party data has provided an easy and inexpensive way to get in front of potential customers and bring them in for a trial. Changes in privacy laws and the phasing out of third-party cookies are pressuring organizations to find alternatives that don’t simply let them target potential customers but improve their ability to reach the right customers, at the right time, with the right messages and offers, boosting the results of their marketing campaigns. And with more competition in the digital space, acquisition costs are skyrocketing.

According to Forbes, first-party data is more accurate, provides better insights, has higher conversion rates, and is a priority for maintaining customer relationships. And, contrary to what some believe, consumers are willing to share personal data in exchange for brands using it to personalize their communications, offers, and experiences.

The easiest and most inexpensive way to capture this information and use it effectively is through customer loyalty technology and an effective loyalty strategy. Annex Cloud’s Loyalty Experience Platform allows brands to capture first-party data at scale and push that data across their tech stack to better understand their customers and deliver the personalizes experiences they expect. The platform also allows brands to gain insights and turn the data into actionable strategies, from delivering individualized communications, promotions and offers to increasing brand engagement.

Softening the Impact of Price Increases

Supply chain challenges are driving up costs which will quickly be reflected in the price of goods. Many brands will be challenged to keep their revenues up as their prices significantly increase due to the pass-through of the increased supply chain costs.

Loyalty solutions enable brands to add value that extends beyond transactions, building emotional bonds that create stickiness despite price increases. Recognizing your customers as individuals, engaging them in fun and relevant ways, and rewarding them for actions and behaviors others than purchases all contribute to an on-going mutual value exchange that elevates the relationship. For a few pennies per customer, a loyalty initiative will make a significant impact on retaining your best customers and, Gartner reports that the average spend of an existing customer can be up to 67 percent more than a new one.

The Big Brands Are on Board

Since Starbucks launched its loyalty program in 2008, it’s gained 22 million members. Rewards purchases accounted for 47 percent of all U.S. purchases from April through June 2020. They’ve harnessed the power of loyalty to drive repeat purchases and transform their customer relationships to the point that customers are excited to use their app.

McDonalds and Burger King have also embraced loyalty to drive growth while delivering rewarding personalized experiences that include calling members by name and using gamification to build lasting customer relationships. Chipotle announced a ‘Guac Mode’ feature to offer free guacamole to customers whenever this feature is randomly activated—adding a fun surprise into the mix that also encourages ongoing customer engagement. Like other major brands, they’re realizing that since digital has become part of consumers’ everyday routine, 2021 is the perfect time to adopt or elevate their customer loyalty technology and strategies. Consumers are seeking out brands that deliver personalized omnichannel experiences across every touchpoint and make it fun to interact with them.

Annex Cloud Can Help

Are you reading this shaking your head in agreement? Are you struggling with these very real challenges today? If so, let’s connect to discuss how loyalty and, particularly the unique Annex Cloud Loyalty Experience Platform, can make you and your team a winner in 2022 and beyond.

 
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