The seven myths of online loyalty – part two

In this seven-part series, I explore some common myths and misconceptions about building customer loyalty online and more specifically, explore why many of the loyalty tactics employed on the Internet simply don't work. The first instalment can be found online at...

In this seven-part series, I explore some common myths and misconceptions about building customer loyalty online and more specifically, explore why many of the loyalty tactics employed on the Internet simply don’t work. The first instalment can be found online at www.strategymag.com by searching for ‘Seven Myths.’

In last month’s column, I explored the need for marketers to consider a communications plan for their Internet venture, else, they may find that they build it and no one comes. This month, I’ll continue in the series by exploring online loyalty myth number two: Keep it current and they’ll keep coming back.

Many marketers are seduced into believing that continuously updating their Internet site creates customer loyalty by encouraging repeat visits (or, at a minimum, attracting new customers). This is accomplished through continuously updated aesthetics (that is, the look and feel) of a site, the addition of features and functions or the changing of information and content. The premise is simple: New and improved promotes more frequent use.

And the pervasiveness of this proposition on the Internet is staggering. Just think about how many Internet sites you’ve visited that offer an e-mail service that promises to notify you when that site changes or new features are added.

Given the immediate and constantly evolving nature of the Internet, doesn’t constantly updating your Internet site make sense? One would assume that online consumers are very used to and in fact, demand ‘newness.’ Certainly, one would assume that updating your Internet site is necessary to keep up with the competitive Joneses.

But these are very dangerous assumptions to make. Before taking the plunge into an endless spiral of updates and changes on your Internet site, consider the following three factors.

1) Beware the novelty factor.

Organizations investing in updating content, information or the look and feel of their site often see immediate spikes in their online traffic and more importantly, increased repeat traffic. This phenomenon is largely driven by online consumers’ desire for novelty. Simply put, because the Internet is immediate and constantly evolving, many consumers have become accustomed to looking for the latest and greatest. Once they find it, they will explore it for curiosity’s sake. And they will increase the frequency of their visits short-term because there is often more to explore.

But as with many new and improved product strategies, these short-lived increases in volume are not sustainable. Once the newness of your site wears off, the changes you’ve implemented need to stand on their own. If the changes you’ve implemented do not result in a clear and improved value proposition for your customers, chances are, the increase in volume you experience will be temporary.

Of course, the response many organizations take to counter this is to simply make more changes. You can see how this can quickly turn into an endless spiral.

2) Consider the economics.

Updating your Internet site on a regular basis can be an expensive proposition – especially if you’re not clear on what value it creates for customers. To do it properly requires you outsource the work to an Internet agency of some sort or build that capability in-house.

If you outsource the work, you may be surprised by the costs involved. Most Internet shops are not structured to do ‘maintenance’ or update work; they are structured to do larger projects. The result – you’ll pay for skills, resources or overhead that’s not necessarily needed to make the changes you require.

If you decide to build that capability in-house, be clear on the costs of finding and hiring Internet talent, which these days is scarce. Also factor in the cost of equipment you’ll need to properly do the work. And beyond the budgetary concerns, be clear where in the organization these resources will live.

Many organizations struggle with this part. In which department do Internet developers belong? Are they a marketing department resource? Operations? Information Technology (IT)?

3) Too much change can be confusing for your customers.

While the Internet speaks of immediacy and constant change, there is the danger of overdoing it with your audience. Given the glut of information and services available online, it’s important to balance newness with stability for your customers. For many regular Internet users, there’s nothing more annoying than having a frequently visited site change and the information or services that were oh-so-familiar and easily accessed, altered. This forces your customers into having to re-familiarize themselves with where everything is on your site. And this can be a frustrating waste of time for many of them.

So how often should you update your Internet site to increase customer loyalty?

Unfortunately, there is no simple formula. For many organizations, striking a balance between fresh and staid is a complicated exercise. You’ve invested a small fortune launching your Internet site. You have a marketing plan to promote it. You’re starting to see decent traffic numbers. Now what? Surely there are new ideas, technologies or customer needs to explore online. But how long do you wait before your next series of updates? Where do you start? How much do you change and how often do you change it?

The best approach to solving this problem is to build a product evolution plan. Lay out the evolution of your Internet site over the next 12 to 24 months. Be clear of what your objectives are in evolving the site and the return on investment you are expecting. If you are working with an outside agency, make sure they are aware of your longer-term plans and ask them to provide estimates for the work that will be required to implement your plans. Map your objectives and your customer needs to potential changes you believe will meet those needs and objectives. If you can afford it, test any major changes you plan on making with a sampling of customers. And regardless of how good the information about your customer preferences is, be prepared to undo any changes you make in case they don’t hit the mark with your customers.

Most importantly, constantly revisit your assumptions and measure and track the effect of the changes you make, so that you can develop a clear understanding of what your online customers like and what they don’t. Only then will you know for sure.

Next month, I will cover online customer loyalty myth number three – The more content you add, the ‘stickier’ your site becomes.

Michael Shostak is president of Vickers & Benson Interactive and has spent the past 10 years of his life demystifying technology and marketing. For rebuttals, platitudes or other comments, Michael can be reached at mshostak@vbdi.com or at (416) 480-7978.