To truly differentiate a loyalty program, companies have to make sure there is proper brand alignment across the board to ensure a seamless comprehensive experience, according to Sean Claessen, Vice President, Creative & Strategy, Bond Brand Loyalty (formerly Maritz Marketing).
During Tuesday’s Loyalty360 webinar titled, “Brand Loyalty–It’s the Outcome, Not (Just) the Program,” which was presented by Bond Brand Loyalty, Claessen and Scott Robinson, Senior Director, Loyalty Consulting & Solutions, Bond Brand Loyalty, talked about how brand alignment is necessary for companies to truly differentiate themselves.
According to its Bond Brand Loyalty Report 2014, released earlier this month, brand alignment is a design imperative for any successful loyalty program. Brand alignment is a core loyalty design principle that refers to the precise relation of the program’s components with the attributes and personality embodied by the brand. Marketers should be concerned with the extent to which the attributes of their loyalty programs support and align with their brands’ attributes and positioning. Doing so can deliver nearly three times higher member satisfaction compared to programs that fail to achieve strong brand alignment.
At one time, Claessen said, it was fine to just have a loyalty program. But today, to truly differentiate from the competition, brands need to take a deeper dive toward capturing loyalty.
“The program has to be about your brand,” he said. “It needs to be lined up with what brand stands for so that it won’t be easily mimicable. That’s what loyalty programs were intended to do in the first place.”
Consumers have an appetite for loyalty programs, the report notes. The average number of program memberships is nearly 11 and 7.8 of those are active. Loyalty programs’ influence on behavior is strong and growing.
· I modify when and where I buy items to maximize the points I receive for purchases (57% in 2013; 64% in 2014)
· I modify what brands I buy to maximize the points I receive for purchases (46% in 2013; 55% in 2014)
Customers say a brand’s loyalty program is as important as store location, according to the Bond Brand Loyalty Report 2014.
“Just having a loyalty program was a differentiator in the beginning,” Claessen said. “To what degree is it a competitive differentiator? This stat is especially compelling.”
· 80% say loyalty programs are definitely worth the effort of participating
· 71% say programs make me more likely to continue to do business with certain companies
Fees (68%) and privacy concerns (56%) are the top two reasons customers indicated as reasons not to join a loyalty program ‘I don’t shop enough’ at 47%.
Mobile is an interesting segment, Claessen and Robinson said, because 72% want to interact with brands on mobile devices. But beyond that, the percentages drop significantly (from 44% to 15%) when it comes to mobile functionalities such as: managing rewards, redeem for rewards at time of purchase, read product reviews, gain access to events, checking in to unlock offers, and sharing offers with friends or family.
Robinson said the implication for marketers is to innovate and implement quickly in the mobile space, and quickly move on.
Nearly 80% surveyed indicated that loyalty programs are part of their relationships with brands. “Brand-aligned programs drive higher customer satisfaction, and are a sustainably differentiated approach to engaging customers,” the report says.
Nearly 30% of customers would not be loyal to the brand if it weren’t for the program.
“A loyalty program can’t fix a broken brand, but it can help fix what’s broken about your brand,” the report says. “For some brands, customers love the program more than the brand. Programs must work harder to spread that love back to the brand to build brand loyalty. Brands that delight customers and make them feel special will deliver a strong customer experience that fosters brand loyalty.”
What’s on the horizon?
“Some necessary evils will remain,” Claessen said. “Brands can offer more than discounts, other non-monetary things that allow your customers to bond with one another.”
Robinson believes discounts will be replaced by higher discounts.
“Don’t get rid of discounts,” Robinson said. “Consider discounts, plus all of these other non-monetary things that give brands a more cost-effective approach to price and loyalty.”