What Is e-Loyalty?
In the beginning of Web marketing, e-loyalty was thought to be equal to bulletin boards and chat rooms. Later, sites led by Web art directors, pushed the theory that animation (what I call "dancing baloney") creates e-loyalty--quite the opposite actually.
Shortly thereafter customer registration and email were the new hot tactics for loyalty. Sign them up and deluge them with email soon became the trend in 1999. So, it wasn't surprising when the evangelists of trust and permission marketing became 1999's e-loyalty gurus. Web users distaste for spamming reminded marketers that just because they thought they had a relationship with a customer, didn't mean the customer wanted to have a relationship with them. In 2000, the rage seemed to be point programs implemented by outside firms, that didn't offer proprietary currencies. I certainly saw those bankruptcies coming. Don't misunderstand, we've encouraged many a marketer to implement a point program, but only when married with the right strategy.
The problems this industry has seen are created by marketers' incessant focus on the tools and not the customer relationship--they focus on the science, not the art of building relationships. This is the number one reason that many Web marketers miss their objective when it comes to making Web customers loyal.
Most successful online companies are pursuing online relationships with their customers, but are they really relationships? Just because you receive permission from your customers to send an email when a requested product is in stock, doesn't mean you have a relationship. Just because Sally Jo paid to subscribe to your e-zine last week, doesn't mean you have a relationship. If it were that easy, you wouldn't be here reading The e-Loyalty Resource.
Building e-loyalty through relationship marketing is tough because it takes two consenting people to create a relationship. And all the wishful thinking by your website marketing staff won't make up for an absolute lack of interest by a customer. Truth is, customers typically aren't that desperate to form an emotional bond with a database on a server. Sure, customers are willing to have relationships with a brand, a company and even a community, but they do so selectively, and only after trust and respect have been proven.
This website explores ways in which you can engender e-loyalty by providing value and engendering trust. It will help you create relationships with your prospects and customers online. Relationship marketing is an extremely important element of e-loyalty, but e-loyalty isn't solely about relationship marketing, and the focus isn't limited to smart marketing concepts like permission marketing or 1-to-1 marketing. e-Loyalty is about that wonderful moment when one human being reaches out and touches another--at a level that actually means something. It's about humanizing digital loyalty. To achieve this is no smaller feat than painting that famous human touch on the ceiling of the Sistine Chapel. First of all, before you can even begin an e-loyalty strategy, you must first perfect your product, your Web execution and your distribution system. A bad first experience on your site can kill the millions you spent on e-loyalty. The best e-loyalty program in the world won't overcome a bad website design, poor product quality or unreliable distribution.
You may think we're making this e-loyalty concept into a much bigger deal than it is. You boast that you have 1 million registered visitors, and growth proves you have e-loyalty. But ask yourself these questions: "what's your churn rate of new customers to non-returning customers?" "How often have they returned? How much time did they spend with you?" Better yet, "how much money did they spend with you or your advertisers?" You don't have a relationship if customers don't return or don't transact. In fact there are only three measures of e-loyalty: repurchase, cross-purchase and referrals. You have e-loyalty when customers don't even consider the competition's offers, when customers want to be associated with your site and tell others about it.
Creating real relationships with prospects and customers online is the Holy Grail of e-commerce. And the reason is clear: real customer relationships that build e-loyalty insulate e-businesses from the competition because customers don't think they need to consider the competition's offers. In fact, they don't even want to. Loyal customers not only want to return to your website, they want to be associated with your website, and tell others about it. e-Loyalty increases retention, boosts revenue per customer, which means getting a much bigger piece of each customer's lifetime value. And last time I checked, that all boiled down to increased profits and higher stock prices. This is why e-loyalty is all the rage!
© 2001 by Reid Smith & Associates, Inc.
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