The Power of Storytelling in Gaining Customer Loyalty

Complex and challenging. A euphuism we all recognise to describe the landscape for brands trying to drive customer loyalty in 2024.

Last year's DMA Customer Engagement Research (How to Win Back Customers and (re)Build Loyalty) painted a very clear picture. While the economic outlook is slowly improving (or at least, getting less bad), rising competitor pressures and increasing customer price sensitivity are making the formula for growing customer loyalty even harder to find. While this year's update to the research shows that we may well be turning a corner on loyalty, these significant challenges remain.

Loyalty schemes are time consuming to manage and an investment risk. Joining the price-slashing race by using offers and promotions can damage brand equity and isn’t a long-term solution.

At the Walt Disney Company EMEA, together with our CRM agency partner Armadillo, we took a different approach.

Everyone loves a good story

Our “Fanbase Builder” Programme (shortlisted in three categories in this year’s DMA Awards) fused the power of data-led personalisation with creative storytelling to successfully grow the long-term value of our customers, without using pricing strategies and discounts.

We analysed our high-value fans, identified their reasons for loving the brand, and used data science techniques to create a ‘next best category’ segmentation for our remaining audience. We then targeted this audience with immersive, holistic campaigns, where best-in-class storytelling creative exposed fans to more areas of The Walt Disney Company that we knew they’d love – without an offer or loyalty point in sight.

And our strategy paid off. With customers engaging across more products and categories, incremental revenue increased by 160% over the previous year’s programme.

Three key approaches to build loyalty with storytelling

While Disney has the advantage of uniquely rich sources of content, a few key principles from our approach can be applied by any brand looking to deepen and grow customer loyalty – and revenue:

1. Level up data collection

• Make every interaction into a data collection opportunity: even when purchase frequency might be low, engagement with interactive, trackable content in email and other channels can reveal surprising insights about a customer’s preferences and needs.
• Using this added data depth to improve customer segmentation will drive a personalised experience built on the customers’ interactions and what they might be interested in next.

2. Let the creative do the work

• Tell a story and stand out from the crowd: at Disney we have used data insights mixed with interactivity, charm and the brand’s signature sprinkle of magic to bring the email creative to life. Our Fanbase Builder Programme comms included pure entertainment executions with games and interactive content, as well as well-timed nudges towards product purchases triggered by customer signals in their engagement.

3. Don’t underestimate the email channel

• The DMA’s research showed that email was the loyal customers’ favourite channel to hear from brands via. At Disney, we have worked with Armadillo to develop proprietary technical solutions to help us power up our email programmes. We want to make the inbox experience entertaining and rewarding – and our customers seem to love it.

Loyalty doesn’t always mean having a loyalty programme: for us at Disney, it’s about building a customer programme rooted in data science, that delivers commercial results by creating personalised experiences which engage, entertain and bring smiles to our customers’ faces. For a company steeped in stories, it’s the only way to go.

We'll be exploring these themes further in this year's Customer Engagement research, releasing at our Customer Engagement Conference on Tuesday 19 November, crucially canvassing the opinions of both consumers and marketers as we unpick how to reward loyalty without getting trapped in a downward spiral of price sensitivity.

Emma Cox – Head of CRM at The Walt Disney Company EMEA and James Ray – CEO of Armadillo