Customer Retention: Why Relevance Matters More Than Loyalty

According to Harvard Business review, the loyalty era of marketing is fading. Built—to some degree—on the notion that consumers will continue to buy things from you if you offer the right incentives, research now shows that 71% of consumers say that loyalty incentive programs don’t actually make them loyal at all!

We live in a digital age of customer control, where people are making purchases based on a brand’s relevance to their needs in the moment. In fact, points out Harvard Business review, consumer research they’ve conducted at Accenture shows that companies in the U.S. are losing $1 trillion in annual revenues to their competitors because they aren’t consistently relevant enough.

Although loyalty continues to be important, the findings mentioned above point to a future where marketers and businesses alike will need to rely on serving a customer’s most relevant needs in the moment. That means companies need to become more like “living businesses”, building and sustaining symbiotic ties with their customers as if those relationships are with a concierge, butler, or friend.     

The Evolving State of Relevance

As Harvard Business review points out, customer needs vary according to time and context. But modern technology provides companies with the ability to identify and act on these in-the-moment variations. And guess what? Today’s consumers are increasingly expecting all companies to do exactly that, from their marketing endeavors to the experiences they offer.

SoulCycle, for example, creates a community for indoor cyclers and fitness buffs. The brand’s purpose aligns with customers’ values of health and a positive environment. Customers also feel that they are in a partnership with SoulCycle in the lifestyle they wish to achieve, with clean, updated facilities, high-end bathroom products, and custom SoulCycle playlists on Spotify.

SoulCycle customers are confident that the staff will help them with their needs and assist them in making the most of each class and their experiences reach the pinnacle of relevance when they are motivated by instructors who personally inspire them.

3 Principles to Achieve Relevance With Your Customers

“Your premium brand had better be delivering something special,” Warren Buffett once said, “or it’s not going to get the business.”

Below you’ll find 3 principles to help you connect with customers and deliver a product or service that’s both relevant and special:

1. Be Authentic – Global yogurt brand, Yoplait, typically relies on promotions to attract and retain customers. In the face of rising competition from newer brands like Chobani, an organization with meaningful connections to authentic food traditions, Yoplait adopted a new focus on customer relevance.

Recognizing the consumers’ pride in using foods with authentic national traditions, they decided to turn their long history of making French yogurt into a market advantage, embracing the traditional French method of culturing and selling yogurt in small individual glass pots. This move added a new level of authenticity to the brand that its customers can take pride in.

Yoplait continues to enhance its relevance to customers in other ways, too. Discovering their customers’ desire to feel safe, they produced their new “Oui” French yogurt product with simple ingredients that are all-natural and non-GMO.

While it’s not known yet whether Yoplait’s targeted initiative will lead to an uptick in sales, it’s a good example of a brand that’s willing to embrace a new level of authenticity in order to be more relevant to customers.

2. Get Your Timing Right – One way to become a living business is to recognize and present the right message, experience, or offer to customers in the correct context—a level of personalization that few businesses manage to attain.

Car-rental company, Hertz, developed a “Just in Time” approach to delivering notably relevant offers at the moment the customer is assessing deals across their preferred channels, from call-centers and counter terminals to mobile devices or Hertz’s own website.

Using customer data, Hertz recommends deals based on consumer tendency to accept certain offers over others. For example, they retarget customers with slightly different versions of ads (sometimes even offering a lesser deal) to those who passed up similar offers in the past. Hertz understands that an unwilling customer is a lost opportunity. That’s why their offers are adjusted to the customer’s behavior in a manner that simultaneously works across all of their marketing channels.

3. Forget the status quo – If you want your company to be successful as we move into an era of relevance, you must be willing to abandon the old and embrace the new. Today’s technologies are shifting the customer’s journey and expectations, so you need to increase your ability to engage customers in the most relevant ways.

“Often, the greatest roadblock is a company’s lack of willingness to transform their processes, organizations, and mindsets as needed,” says Harvard Business Review.

 “Brands that do not evolve and offer the consumer something more than a product will be hard-pressed to compete.”

Source: Kevin Plank, Under Armour’s CEO

BMW Customers can now view their engagement with the brand as an ongoing relationship, not just a one-time purchase. Ignoring the status quo, the automaker strives to provide its customers with a seamless transportation experience by linking them into a broad ecosystem of car-share and rental companies, parking aids, electronic-vehicle charging stations, and location-based mobile lifestyle help them navigate their urban environment, with or without their car.


“If your customer retention strategy relies on ‘buying’ loyalty with rewards, rebates, or discounts, it is coming at a high cost. And these days, it could also mean that you’re giving up something priceless: your relevance,” says Harvard Business Review.

Today’s consumers are constantly analyzing and re-analyzing their purchasing decisions. They will buy from the brands most relevant to them in the moment…and they’re willing to pay a premium.

Living businesses—the ones that master relevance—will not only have pricing power, but they’ll also drive repeat purchases. “Those are the ultimate goals of loyalty,” says  Harvard Business Review, “now newly attainable, when relevance matters more than ever.”

Also published on Medium.

Sherene Funk is the author of the contemporary romance Autumn in Your Arms and two small business e-books. She is a voracious reader who owns more books than she can ever read in this lifetime. A graduate of Brigham Young University, she worked in advertising for many years before moving to her current writing position at Rain Retail Software. She researches non-stop to see what successful retailers do and loves to share what she learns with small business owners.