If your customer-retention strategy relies on loyalty, it’s time to rethink. It could mean that you’re giving up something priceless: your relevance. In the U.S. market alone, companies are losing $1 trillion in annual revenues to their competitors because they are not consistently relevant enough (Accenture). Loyalty is important, sure, but the future of marketing — and many businesses — depends on serving a customer’s most relevant needs in the moment. In this way, 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 “loyalty era” of marketing, as we’ve known it, is waning. It was built in part on the notion that consumers will keep buying the same things from you, or in the case of service-related industries, stay and renew, if you have the right incentives. Yet, according to recent consumer research from Kantar, 71% of consumers now claim that loyalty incentive programs don’t make them loyal at all. Instead, in the era of digital-based competition and customer control, people are increasingly buying because of a brand’s relevance to their needs in the moment.

Building Intrinsic Value and Moving Beyond Product, Price, Placement and Promotion

To become this kind of living business, with a new understanding of customer needs, we need a new definition of relevance. Abraham Maslow’s “hierarchy of needs” — first published in 1943 —sought to map the psychological needs of humans and their motivations. But his framework also offers a model for rethinking the traditional four P’s of marketing: product, price, placement, and promotion. Most companies today are guided by these four facets of engagement.

The problem, however, is that brands using the four P’s exclusively often target a static customer archetype (e.g., a value-conscious customer for a discount auto policy). The reality is that there is no such archetypical customer. Everyone’s needs vary depending on time and context. And with today’s technologies, companies now have the ability to see and act on these fluctuations in the moment. Customers are increasingly expecting all companies to do just that, both in their marketing efforts and in the experiences they offer.

To become a living business, companies should expand their thinking to include the following five P’s as well: purpose, pride, partnership, protection, and personalization. These form a simple and comprehensive test of relevance. The first four extend from the top to the bottom of the psychological hierarchy — from what Maslow called “self-actualization” or fulfilling your full potential, to safety, a more basic need. The fifth, personalization, enables companies to connect with customers around any of these needs. Never has this new paradigm been more relevant than to insurance and financial-service companies.

  1. Purpose: Customers feel the company shares and advances their values.
  1. Pride: Customers feel proud and inspired to use the company’s products and services.
  1. Partnership: Customers feel the company relates to and works well with them.
  1. Protection: Customers feel secure when doing business with the company.
  1. Personalization: Customers feel their experiences with the company are continuously tailored to their needs and priorities.

Soul Cycle provides a good example of what the five P’s look like in practice. By creating a community, SoulCycle’s purpose aligns with customers’ values of health and a positive environment. This experience creates a sense of pride for customers who want to participate in a high-end cycling experience (given the pricing and the tendency for instructors to be young and fit). Customers also feel that SoulCycle is a partnership in the lifestyle they wish to achieve: They feel like they are treating themselves with upscale facilities and bathroom products, and custom SoulCycle playlists on Spotify. SoulCycle customers also feel protection in their purchase — which is expensive for a 45-minute fitness class compared to the cost of a traditional gym — because they are confident that the staff will help them make the most of each class. Finally, the SoulCycle experience becomes totally relevant when a customer has an instructor that personally inspires them, thus creating personalization.

Many companies will be challenged to satisfy all five P’s at once. The following three principles, however, should help them in their efforts to connect with customers on these fronts:

Extending Your Brand

Companies have been using the traditional four P’s of marketing for decades, and many of those with great success. Often, this means companies will need to extend outside of their comfort zones to position their brands in these new, expanded ways.

Consider a focus on customer relevance. Think about your long history and the pride that can come from a connection to a long-standing company. Many financial companies inherently have this. Enhance your relevance to customers in other ways. For example, customers’ desire to feel protected.   Purposefully pivot to an approach that extends beyond traditional services to address bigger concerns for your customers.

CVS Pharmacy, the retail pharmacy of CVS Health, is a good example. CVS Pharmacy is moving beyond a purely transactional retail model where customers fill prescriptions; instead, the company is focusing on helping their customers on their path to overall better health. In this way, customers share the company’s purpose. It also helps satisfy their desires to feel cared for, and helps build upon the trusted relationship most customers have with their pharmacist — an example of what we’ve termed protection.

Extending far outside the traditional retail paradigm, CVS is expanding their sphere of influence (they recently acquired Aetna Insurance) and embracing new technologies such as predictive analytics, artificial intelligence, and machine learning to send their customers personalized reminders to refill or take their medications, in the spirit of partnership. And, the company has teamed with AI giant IBM Watson to anticipate patient needs, including when they might require more urgent care. These new avenues and practices will enhance the value for customers in maintaining an active engagement with a true healthcare partner — and make the CVS brand more relevant in the moment through protecting their health and well-being.

Timing is everything

If the first four P’s are additive, the final one — personalization — is multiplicative. A key component of becoming a living business is conveying exactly the right message, experience, or offer to customers in exactly the right context. It’s a level of personalization that few companies ever attain.

Car-rental giant Hertz has worked to develop a “Just in Time” approach to delivering highly relevant offers at the exact moment when the customer is evaluating deals across the channels they prefer, whether it is through call-center agents, counter terminals, handheld devices, or the Hertz web site. Using predictive analytics, Hertz suggests deals based on a customer’s propensity to accept certain offers over others. For example, a customer who would be qualified for a buy-one-get-one-free deal might still receive a different (perhaps even less profitable) offer if she passed up similar offers in the past. The company understands that a promotion can only be as profitable as a customer’s willingness to take it — and an unwilling customer is a lost opportunity. That’s why offers are calibrated to a customer’s behavior in a way that all marketing channels can simultaneously use.

Don’t be loyal to the status quo

To succeed in this era of relevance, marketers and companies must be continuously willing to abandon the old. As new technologies shift customer journeys and expectations, they can (and should) also enhance companies’ abilities to engage with 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.

John Hancock has embraced partnerships across a broader ecosystem to help its customers navigate their life, far beyond a traditional health policy. Customers can now see their engagement with the brand as an ongoing relationship, rather than a one-and-done purchase. To provide its customers a seamless experience, the insurer links them into a broader ecosystem of lifestyle apps. Twine, a life goal, saving and investing tool, is so unique. I love that it is built for two- you and your partner- with the end goal of collaborating on short and long term financial goals. It’s also mobile first- because who really has time to be sitting and keeping track of investment goals with their partner in front of their desktop. This app is smart, timely and yes, relevant. Then there is Vitality, an integrated wellness program backed by science. Vitality constructs an individualized plan. And while many wellness programs rely solely on self-reported data, Vitality verifies activities and behaviors, integrated with wearable devices, to ensure you’re getting the real results you want to see.

Today’s mobile-enabled consumers are constantly evaluating and re-evaluating their purchasing decisions. They will choose the brands most relevant to them at an increasingly rapid pace. And they’ll pay a premium. Living businesses — those that achieve this profound degree of relevance — will have pricing power and will drive repeat purchases. That is how brands can move beyond loyalty, now that relevance is what matters most.



With reporting by John Zealley and Joshua Bellin from Accenture.