Tag: customer loyalty

The Loyalty Puzzle: What Loyalty Research Needs to Answer Now

Posted on

In the last couple of months, I have been super busy starting a new exciting research initiative, the Loyalty Science Lab. Housed at my university, the Lab’s mission is to create and promote cutting-edge scientific research on brand and customer loyalty. Through collaborative efforts between marketing practitioners and academic researchers from multiple disciplines and multiple industries, the Loyalty Science Lab identifies high-priority loyalty-related issues, engages in deep, evidence-based scientific research on these issues, and disseminates the insight to benefit loyalty research and practice. I am happy to say that the Loyalty Science Lab is now up and running!

As its first major initiative, the Loyalty Science Lab spoke with a group of leading marketing practitioners and academics. The purpose of the conversations was to identify important loyalty-related issues that need deep, focused research. The questions generated through this process were further narrowed down by the experts on our advisory board into a list of top-tier and second-tier questions. 

In this article, I would like to share with you the major loyalty issues we’ve identified that need more research at this time. For a complete list of the research questions, you can download The Loyalty Puzzle 2020–2022 edition.

Continue reading “The Loyalty Puzzle: What Loyalty Research Needs to Answer Now”

Predicting Significant Customer Life Events

Posted on

The ancient philosopher Heraclitus said that “Life is Flux”. That statement has important meaning to how a business should connect with its customers. Consumers’ needs change constantly depending on what is happening in their life at the moment. It is impossible to catch every ripple in life. But a business needs to anticipate and respond to the most significant life events in order to build long-term loyalty. The first step is to understand what it means to have a significant life event, what happens to consumers during that time, and how it manifests in consumers’ activities. I will offer some answers in this article based on my own and others’ research in this area.

Consumers’ Experience of Significant Life Events

Significant life events abound in everyone’s life. Some of these are positive events, such as getting married, having a baby, or getting promoted at one’s job. Some are not so happy, such as getting a divorce, losing a loved one, or getting laid off. There are also events with bittersweet feelings such as retirement and sending kids off to college. Whether good or bad, these events are considered “significant” because they change our identity. That is, who we are as a person. For example, getting married means the addition of a new role as a husband or wife. Losing one’s job means the loss of an existing role as a worker and bread earner.

Such role transitions and identity shifts often create a sense of instability and can be quite stressful to the person going through the transition. To cope with the demand of role transition, existing research shows that one can simply cope with the emotional stress itself, or one can take a more proactive approach to do one or both of two things: (1) clarifying what one’s role will be following the significant event; and (2) adjusting one’s resource mix to be prepared for the new role.

Continue reading “Predicting Significant Customer Life Events”

The Basics of Behavioral Segmentation

Posted on

What is Behavioral Segmentation?

There are lots of things that you can try to learn about your customers. For example, you might want to gather information on how old they are, where they live, and whether they are married and have kids. You’re probably also using information about how often they buy from you and when they last bought from you to predict their likelihood of buying again in the future. Knowing such information can help you optimize your loyalty program and target the most enticing rewards and marketing communication to a particular group of consumers.

Traditional customer segmentation has often been based on demograhpics, geographics and socioeconomic status. However, as Gibson Biddle, former VP of Product at Netflix pointed out in his Habit Summit talk earlier this year, common demographics tend to predict consumer preferences rather poorly. Instead, what people do are often more telling about their taste and what they may like or dislike. Together with an increasing amount of available data about consumers, this has prompted rising interests in behavioral segmentation, that is, segmentation based on what people do. Over the course of this year, I have worked with a CASC business partner on a customer segmentation project using loyalty program data. The practice has been really insightful in revealing hidden groups of customers for great targeted marketing opportunities that may not have been apparent on first look. Continue reading “The Basics of Behavioral Segmentation”