The seven myths of online loyalty – wrap-up

Many months ago - September of last year, to be precise - I began a seven-part series on online loyalty by commenting on the embarrassing state of the Internet industry, with all its pomp and circumstance, pundits and prophets and conquer-the-world-through-technology...

Many months ago – September of last year, to be precise – I began a seven-part series on online loyalty by commenting on the embarrassing state of the Internet industry, with all its pomp and circumstance, pundits and prophets and conquer-the-world-through-technology arrogance. My aim was to dispel some of the hype and mythologies associated with the Internet and, in the process, provide insights into what does and doesn’t work online when it comes to building customer loyalty. Since then, the world has changed considerably. Dot-com euphoria has died down and businesses are awakening to the possibilities of the Internet in a new light – as one ‘channel’ that factors into an overall business plan. Market conditions have brought a new level of reality to the way we approach business on the Internet and have helped in my cause of dispelling the hype, but there is still work to be done.

Throughout the series, I received many e-mails from readers, and one, in particular, came from someone who was anxiously awaiting a conclusion to reveal the magic answers. Well, I have good news and bad news. The bad news is that there are no magic answers. The good news is that there are (a) basic loyalty principals that underlie the myths previously discussed and (b) simple frameworks you can use to consolidate your customer loyalty strategy into a clear plan of attack.

First – the seven principals.

1. Market it and they will come. Let your customers know where they can find you online and why they should. Use your offline marketing and distribution channels to remind customers you’re on the Net and the value of your online offering (e.g. convenience, customer service, etc.).

2. Keep your site updated, but not too updated. Unless you’re in the news and information publishing business, don’t make changes merely for the sake of changes. Focus on seasonal or promotional changes, keep the site consistent so frequent users find it easy to navigate, and let your users know what’s new since they last visited.

3. Only add content that helps sell product. Study your customers’ purchase decisions and use content to support that process, not detract from it.

4. Don’t give things away. Price incentives are not sustainable, and your competition is always just a click away. Employ tactics that support repeat-purchase behaviour rather than bargain-seeking behaviour.

5. Focus on customer relations, not relationships. Find out what is really meaningful to your customers, and structure your Internet offering to be customer-centric versus brand-centric. Provide superior customer services – even to prospects – and remind customers how much you value their business.

6. Set up your site to support customers, rather than to attract them. Use community-building tools online as customer-support features. For example, provide a forum for customers to post questions for service representatives or other customers; it’s a great way to provide help while lowering your support costs.

7. Use technology wisely. Change your marketing processes to take advantage of new technologies only when they help streamline costs or improve customer service. Focus on technology that supports your brand proposition (e.g. convenience, performance, cost efficiency). And most importantly, don’t lose the human touch.

Now that we’ve recapped the do’s and don’ts of online customer loyalty, allow me to leave you with a framework to help you consolidate your loyalty strategy – a framework I call the ‘Four R’s,’ and one that will put you well on a path to success.

Reach.

Step one in your online loyalty strategy should address awareness. How will your customers know about your online offering? What value are you offering online? Are you selling products, providing a service or simply offering product information and decision-making tools?

Relevance.

Step two should zero in on what is important to your customers, so that you can provide a relevant experience. Do you know what your customers need online to help them to purchase your products or services – online or off? Do you know where the service gaps currently lie? Have you done your research and tested your assumptions?

Retention.

Step three addresses the retention challenge. Do you know who your most profitable customers are and what’s going to make them loyal? Have you identified the tactics that will build meaningful relations with those customers? Have you given equal attention to post-sales support as you have pre-sales?

Results.

Step four looks at measurement. Do you know if your Internet investment is paying off? Do you have a process in place to continuously monitor data, and can you use the knowledge to improve your offering?

As a final note: despite what I’ve suggested in this series, there are few hard and fast rules when it comes to the Internet (at least not ones that are fixed). The Internet is a fledgling medium; there is still much to learn as technology advances, consumer sophistication evolves and business models mature. No doubt it will take many years for the evolution to take its course.

The full, seven-part series on online loyalty can be found at www.strategymag.com by searching for ‘Seven Myths.’ Michael Shostak is president of Wideframe, a Toronto-based Internet professional services firm that specializes in helping organizations make better use of technology to build profitable customer relationships. He can be reached at mshostak@wideframe.com or at (416) 480-3760.