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Values, experiences outweigh product attributes in driving loyalty and engagement

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For today’s brands, “the difficulty is not locating customers; it’s engaging them,” said Robert Passikoff, president of customer loyalty and engagement research consultancy Brand Keys. This trend was underscored by consumer survey results generated for the agency’s 10th annual Brand Keys Customer Loyalty Engagement Index, released last month.

The 2007 Brand Keys Customer Loyalty Engagement Index was based on feedback from 24,000 individuals between the ages of 18 and 60. Respondents were drawn from the nine U.S. Census regions during the first quarter of 2007. Survey participants self-selected to provide feedback about product and service categories in which they were customers. Fifty-five categories were examined, ranging from airlines to allergy medicines and wireless phone services, and brands in each category were scored on how well they delivered on customers’ expectations.

Perhaps the most important finding from Brand Keys’ 2007 research was that “traditional, rationally based product attributes and benefits aren’t leveraging the way they used to,” said Passikoff. “Of the categories that we track … a little more than half of them have shifted to drivers [of customer loyalty and engagement] having to do with experience, service and customer interaction.”

For direct marketers, this news is both good and bad. On one hand, who is better positioned to promote positive consumer experiences and interactions than those responsible for key touch points, such as call centers, Web marketing, direct mail, and catalogs?

On the other, Passikoff said, many marketing practitioners don’t understand the emotional experiences customers want them to deliver through such channels. “The issue is: Do these companies have certain … measurements and assessments in place that allow them to understand what consumers really want and … expect?” he said.

Ernan Roman, president of Ernan Roman Direct Marketing, said his experience conducting Voice of the Customer Research surveys for marketer clients, such as Microsoft Corp. and IBM Corp., has helped crystallize what customers want and expect: “a value connection.”

On the Web, for example, “I want to know that I am not just an undifferentiated name,” Roman said. “I want to feel a level of personalization based on my previous experiences and preferences.”

In addition, Roman stressed that too many companies sabotage connections with customers by viewing customer service vehicles as cost centers instead of potential marketing/revenue tools.

The latter sentiment hit home for Wachovia, the top-ranked bank brand in the 2007 index. Wachovia Chief Marketing Officer Jim Garrity said that, since the bank’s merger with First Union in 2001, the company has taken great pains to ensure satisfactory customer experiences at every possible touch point—even the ones not traditionally viewed as “marketing territory.”

For example, following the merger, the bank had numerous legal requirements to notify consumers about repercussions, such as name and branding changes. Instead of viewing these as obligations to be fulfilled at the lowest possible cost, the bank considered how it could use the pieces to send positive messages to customers.

“We produced branded, marketing-oriented customer notification pieces tailored to the relationship level,” Garrity said.

The bank, a heavy user of direct mail, has also implemented some simple guidelines to ensure positive customer experiences with all its written correspondence. Garrity said every letter that goes out from the company is signed by a real employee and includes their contact details.

“Our intent is always to take the customer’s point of view in communications,” he said.

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