Brands breeding loyalty through digital

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For many, a trip to the seventh largest retailer in the world is a weekend ritual. But are quality goods at respectable prices enough to create and sustain customer loyalty? According to Paul Latham, Costco's VP of membership, marketing, and services, they just might be:

"Costco really doesn't have a strategy for 'creating and sustaining brand loyalty,'" he says. "We have a strategy for running our business. We simply believe that if we provide our members with the products and services they're looking for at the lowest prices possible, do it in a clean and safe environment, and provide efficient and courteous service, we will be rewarded with loyal members."

Brands breeding loyalty through digital

The way in which Costco runs its business demonstrates a commitment to return customers. In a recent iMedia Connection article entitled, "The truth about engagement," the author writes, "You want engaged consumers? Give them something to hunt." Costco might be tapping into this notion. As Latham states, "We try to create a 'treasure hunt' atmosphere in our warehouses, where our buyers source unique items that our members might not expect to find." Keeping customers engaged in the continuous hunt for fleeting products is a strong way to induce return customers.

In addition, Costco's email marketing strategy keeps customers coming back for more. According to Latham, it's all about efficiency: "Our email efforts are effective largely because we are very selective and careful not to inundate our members with marketing messages. Our members appreciate the fact that we use email sparingly, so our open rates tend to be strong." Although the retailer's success comes from the selling bulk items, its marketing efforts are applied sparingly. Give consumers what they want, and interact with them only enough to show them they are valued. 

Apple iPhone

Despite waves of complaints from customers across the globe at the launch of new products and software, Apple customers are the most forgiving and patient in the business. Apple devotees know that new technology can be problematic. Rather than jump ship to join another captain when issues arise, Apple customers wait patiently for the company to fix the problems.

In the mobile marketplace, Apple leads the loyalty competition. According to a recent report released by the research firm GFK, 84 percent of iPhone users surveyed said they would choose the iPhone again. Conversely, 60 percent of Android users said they would stick with the Android OS if given the opportunity. These statistics make clear the two-party smartphone system in which consumers reside. When choosing a smartphone, consumers typically face the question: iPhone or Android? What makes the decision easy for most iPhone users are its apps. In fact, according to a recent study by Futuresource, 54 percent of iPhone users "commit to the Apple brand in order to keep the apps they have come to depend upon."

Apple's App Store is a dynamic hotbed of downloadable tools and games. As the iPhone OS has been in existence long before the Android, its app store naturally provides more offerings. However, it is not the sheer volume that maintains customers, but the quality of apps it allows into its store. Apple's commitment to providing the customer with the best offerings available is underscored by its app store, which in turn helps secure loyal customers.



Denyse Drummond-Dunn
Denyse Drummond-Dunn August 20, 2012 at 3:08 PM

Thanks Kyle for all the time it must have done to collect such an inspiring collection of examples.
Following on from Brant's comment about being more than "digital minded" I agree, but for slightly different reasons.
What all these brands have understood is that digital is so much more emotional than other media. It is intimate and direct, which in my books anyway is the best way to get a message into the heart of a customer.
All these brands also seem to have a passion for customer centricity that comes through what they do, how they do it and the words and sentiments they use in their connections.
Be warned I will steal with pride a few of your great examples - but will of course give you the credit!

Brant Emery
Brant Emery August 20, 2012 at 12:00 PM

Looking through these cases, which are great examples of brand based CRM initiatives - I'd say it's much more than being ''digital minded''. At the heart of most of these are strong value-add services. It's like saying "shops build sales through bricks". Digital is merely a facilitator, a building material, for developing compelling, customer driven, elements. Digital media does enable faster, more iterative, development of customer value-adds, but don't forget the basics too. Also, would be nice to see actual results - but I know details like that are rarely made available.