Enterprise Loyalty: Three Principles to Consider

Successful companies know the truth: the customer is king. And forward-thinking marketers are aware that gaining customer insights, through understanding data, is queen.

But transforming the chessboard of business—which has traditionally been a product-centric, silo-based environment—towards customer-centricity won't happen in one straightforward move.

Companies must embark on a strategic journey influenced by customer insights gained through transactional data and allow those insights to create shifts in mindset, culture and strategy across the entire enterprise—everywhere from merchandising and store layout to pricing.

By transforming the customer experience through data and analytical insights, Enterprise Loyalty is Loyalty with a big "L.” The fundamental concepts of Enterprise Loyalty are hardly new to experienced marketers. Most already agree in theory that customer-centricity illuminates the path to future success in retaining loyal customers.

You may know that Enterprise Loyalty is the direction in which you need to go, but if you are like most enterprises we talk to you're not sure how to get started. With so many efforts at stake, from purchasing the right technology to getting buy-in from the C-suite, the transformational journey is a daunting one. Or, perhaps you've heard about companies that are using their data holistically but you aren't sure how to put it into practice in your company. Sound familiar?

The time is ripe to get started, thanks to a fierce level of competition in the marketplace and technological capabilities for successful execution that are finally available.

You can begin the journey towards Enterprise Loyalty in small ways, with quick wins in marketing and pricing to share with your management team, while examining long-term larger issues such as corporate culture, employee alignment and merchandising mix.

The right strategy isn't black and white.  Insight can be gained and leveraged in many different ways, so we think of these principles as moving more as a hub-and-spoke rotation than movement along a straight line. If you want to implement Enterprise Loyalty into your business, here are three things to consider:

1. Data must be leveraged across the organization. A loyalty program can be more powerful than you ever imagined. More than simply a marketing or promotional tactic, using data insights from a loyalty program can drive better decisions within the marketing department and throughout the organization. By freeing your data for use across the enterprise, and introducing the idea of using customer-based insights into the corporate culture, you will make a significant move towards achieving Enterprise Loyalty.

2. The organizational structure must transform. From the C-suite down to the front-line customer-service employees there is no part of the organization that can't benefit from customer insights and no area within the company that shouldn't make shifts towards using information to create a more customer-centric enterprise. The point is worth emphasizing: Enterprise Loyalty is not just a tactic of the marketing department. Instead, insights must be employed in ways that go beyond marketing promotions and communications towards strategic change across departments, from sales and merchandising to operations and pricing.

That's no easy task. Take a retailer's merchandising department, for example. As long as category managers are evaluated on pure category sales volume, they'll never make a decision to promote an item that will drive cross-category behavior at the expense of the particular categories they are responsible for and incented for. Therefore, companies must examine how they compensate, evaluate and reward employees if true organizational change is possible.

3. Small decisions can have a big impact. Moving towards Enterprise Loyalty can seem like an overwhelming task, but making that move doesn't mean you must swallow the ocean in one big gulp. Instead, small decisions based on customer insights can have a big impact. If you gain deeper understanding into who your most profitable customers are ,you can take small steps to attract them through targeted price changes or specific merchandise moves, and get a big response. So, how about a quick win right out of the starting gate? How about two or three? Get a few of those under your belt and your executives' ears might perk right up. Identifying simple ways that don't turn the world upside-down to deliver a series of small wins will establish the right momentum.

Kelly Hlavinka is managing partner of COLLOQUY. She can be reached at [email protected].