Starbucks shows the importance of building loyalty

IF RECENT research is anything to go by, 2012 is set to be the year where brands should build loyalty.

The Havas Media study found that most people in the UK would not care if 91% of brands ceased to exist – a startling statistic that should make executives consider how to make their brands not just relevant but necessary to consumers.

Although 2011 saw brands jump headfirst into digital campaigns, 2012 is the year that longevity needs to be established. Now that the excitement of the initial stage of campaigns has died down, brands must consider how they can nurture long-term interactions with consumers.

A company enjoys high brand loyalty when a sizeable number of its customers won’t switch. With that in mind, digitally savvy brands are moving in their droves to start loyalty programmes.

Starbucks successfully retains its customers, despite the high saturation in the coffee market, by carefully listening to its customers and directly answering their needs.

Starbucks has unveiled a number of digital initiatives, the most recent being its “My Rewards” programme – a scheme which offers customers the opportunity to become a “Gold Level Member” and gain exclusive additional benefits.

The strategy cleverly allows the brand to be more personal by rewarding the most frequent customers. Loyal customers in return pay back the company in long-term cash flow and in generating a stream of referrals.

In a market where many consumers are cutting back, it is essential to gain clear insight into customers – and target those most likely to spend.

For example, the introduction of Starbucks’s transactional iPhone app, which gives customers a quick and easy way to pay via their smartphones, is a clever way to tap into the brand’s modern, technologically savvy, and – crucially – affluent market.

That some people will be exceptionally loyal to some brands is irrefutable, but brands need to recognise the importance of maintaining this loyalty. Targeting new customers without considering current ones could be fatal. Instead, the brightest brands will be focusing on building loyalty this year.

INTERNET entrepreneur Ben Hatton is founder and managing director of digital agency Rippleffect. Follow Rippleffect on Twitter @rippleffected

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