Today’s Sophisticated Consumer

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The consumer decision journey has changed. A process that once took days, weeks or even months can happen in a matter of seconds. The convenience of mobile technologies has triggered an outbreak of wanting everything here and now. Consumers can search online and find product information, ratings and reviews and share them with their friends, all in less than a minute. For the first time in human history, word of mouth is a digital medium.

Everybody’s Talking

It’s about speed, real-time, multi-channel, multi-purpose, speed, connections, emotion, speed, conversion, psychology and insights. Did we mention speed?

In this digital age of lightning-fast communication, companies are discovering that today’s consumers are harder to win and keep. So it’s absolutely critical to optimize your customer’s experience through its entire life cycle, from the moment they first hear about you to the moment they passionately tell others how great you are. This necessitates reaching those consumers at the moments, or touch points, that most influence their decisions.

That’s why consumer electronics companies make sure not only that customers see their televisions in stores but also that those televisions display vivid high-definition pictures. It’s why Amazon.com, a decade ago, began offering targeted product suggestions to consumers already logged in and primed to buy.

This year, we’re finding the trends that emerged in 2012 are not only gaining momentum but are changing the face of customer loyalty and rewards for 2013. Here’s a breakdown of what’s happening:

1. Rewards that Resonate

2013 is making strides in determining a winner for the cash vs. non-cash debate — put your cash on non-cash. More and more research shows non-cash rewards to be more effective. People visualize and remember tangible items better than cash, and therefore stay more actively engaged with program goals and objectives. In addition, customers are also more emotionally involved and willing to work hard for something perceived as a special item, rather than cash or a more practical reward. This is true even when the luxury item costs less.

2. Online All the Time

Last holiday season, electronics topped the list as the most redeemed items in rewards programs, with the top three items including the Apple iPhone, Amazon Kindle Fire HD and Samsung Smart LED HDTV. We’re seeing this reward trend continue, as customers insist on staying connected to whatever and whoever they want, whenever they want it. Customers to want more notebooks, laptops, tablets, Internet TV and interactive and online gaming systems.

3. More than Skin-Deep

Consumers want to be more fit, beautiful and healthy. Inspired by the baby boomers, consumers will place more emphasis on redefining youth and beauty with increased interest in products that allow them to see the fruits of their labor. These products include performance watches with heart-rate monitors/step meters, Wii systems for exercise and healthy performance bikes.

4. Home Sweet Home

Time crunched and worn-out, people are nesting in new and indulgent ways, including treating themselves to good food and spirits with friends and family, taking in a movie “on demand,” or investing in tools, upscale vacuums and safety products that give peace of mind in uncertain times.

5. Brands Matter

Brands continue to be key to the rewards people choose. Understanding how customer segments favor brands is essential to merchandising a successful awards program. From baby boomers, who favor established brands with the “Good Housekeeping Seal of Approval”, to Gen Y’ers, who demand value and performance along with clever advertising, it’s important to take a one-size-doesn’t-fit-all approach to your selection of rewards.

6. Are you Game?

Consumers want more fun in the form of challenges, rewards, and “surprise and delight” tactics. Gamification (game science) is answering the call in 2013, increasingly moving from trendy idea to program staple. Based on the latest findings within the human sciences and neuroscience, game science drives higher levels of participant engagement and ultimately, leads to better business results. The goal is for participants to feel they are part of an engaging, long-term journey that keeps them excited about their programs on an ongoing basis.

All Together Now

Capturing all the touch points resulting from the explosion of product choices and digital channels requires a new, sophisticated and integrated approach. Gone are the days of the traditional marketing function. What Is the Customer Life Cycle?To engage customers whenever and wherever they interact with a company, whether it’s in a store, on the phone, responding to an email, a blog post or an online review, marketing must pervade the entire organization. Accomplishing this requires a mind-set shift around customer interaction touch points. Instead of viewing touch points as being “owned” by a function or department, understand that they are related interactions that add up to the entire customer experience.

The marketing department does not own brand management; building customer relationships is not exclusive to the sales department, and the in-store experience is not only the responsibility of retail operations. In today’s environment, it’s important to recognize that everyone is responsible for marketing and to systemically distribute marketing roles across all departments. At the end of the day, customers no longer separate marketing from the product — it is the product. They don’t separate marketing from their in-store or online experience — it is the experience.

In this era of engagement, marketing is the company and what drives the Customer Life Cycle. While most of us understand that this is true, it’s the “how to” that can trip us up. Good intentions with unclear objectives can sabotage your program from the start. For example, a program cannot be offered to the masses AND exclusive; it can’t be loaded with benefits AND cheap at the same time. It is essential to develop program objectives based on your primary business objectives. Which phase of the Customer Life Cycle do you most need to address?

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