Will ‘13 Be a “Lucky” Year for Channel Convergence? You Better Believe it if Brand Loyalty is Your New Year’s Top Priority

Dec 31, 2012

In early December 2012, the simple text message celebrated its 20th birthday. That triggered the thought of another approaching anniversary, one that will undoubtedly come with far less media fanfare but with no less significance.

On January 27, 2013 it will be seven years since Western Union sent its last telegram. While Western Union put the Pony Express out of business in less than two years, newer technologies like landline phones, and later the Internet, email, SMS, social media and mobile communications made the telegram exceedingly anachronistic – even in 2006. Its usefulness had long converged with other more current technologies

Today, channel convergence is unfolding at ever-quickening speeds and for loyalty program providers it is imperative they recognize and embrace this trend before they too find their services out of date.

Channeling Loyalty One Customer at a Time
Research finds channel coordination and communication between them to be the number one challenge in 59% of retail loyalty programs. Yet, as consumer expectations continue to grow, the need for further convergence will become critical in 2013. Increasingly that means greater reliance on smartphones and tablets to not only gauge and track customer behaviors, but deliver experiences. Not long ago these channels – mobile, SMS, email, social media and in-store – all lived in siloed environments. Channel communication was weak and the management structures, CRM and CEM, that ideally aided coveted convergence were weaker still.

The good news is that as Big Data becomes more manageable (and actionable) and CRM and CEM undergo their own separate (but related) convergence, loyalty program managers are finding new ways to utilize those channels effectively, connecting with consumers in timely and relevant ways. That’s a central tenet in the push toward omnichannel loyalty – a seamless, unobtrusive and privacy-respecting channel convergence framework that engages consumers across multiple channels simultaneously or via their preferred channels.

Finding the Nerve to Converge
If that’s the good news, the better news is that 51% of retailers surveyed in the Retail TouchPoints study I mentioned above are working toward some level of cross-channel strategy. Of those retailers, 45% say their cross-channel efforts are paying off, driving increased brand interaction, improved customer retention and “increased basket size.”

With percentages hovering around half, that means the other half of retailers have yet to take proactive omnichannel and convergence steps. It also says nothing about other verticals where channel convergence is equally vital. Perhaps if Western Union had more readily seen the proverbial writing on the wall, or text message on the screen, they wouldn’t have been forced to become a largely electronic financial services company, a shell of its historic former self.

Companies that don’t embrace convergent technologies and management styles, like Western Union with its telegrams, are on similar paths toward obsolescence in the coming year.

If mimicry is the sincerest form of flattery, then there are numerous examples of companies doing convergence right. In the best-case scenario, channel convergence should begin with a blending of CRM and CEM at the C-suite’s highest levels, working its way down toward total organizational commitment. For in today’s tech-savvy world, neither of these management approaches can exist without the other. Too often, loyalty programs and their connection to customer relationship management and customer experiences are either left off the table entirely or are incorporated into a corporate business model as an ill-timed afterthought..

If 2013 really is going to live up to being “lucky,” then these kinds of management mistakes must now be corrected internally before channel convergence continues externally.

2012 has been an exciting year for the entire loyalty industry. Thanks in part to a still-uncertain economy, unmatched personalized mobile technologies and successful experience-driven loyalty campaigns, consumers are more aware than ever that their loyalty program isn’t (or shouldn’t be) some plastic card stuffed in a forgotten wallet.

It’s up to us, loyalty marketers and program providers, to ensure that the lessons we learned in 2012 are carried over to 2013. The text message may have turned 20, but there’s a growing list of marketing channels eager to celebrate milestone birthdays too.

Only through channel convergence will they survive and thrive to mark those digital and non-digital candles.

Done right, loyalty programs attracting loyal customers will be there to blow those candles out.

Happy late birthday to the text message and Happy New Year to you all!