During Thursday’s Loyalty360 webinar, Cult Loyalty: How to Drive the Only Customer Engagement that Will Matter in 2015, which was presented by Maritz Motivation Solutions, participants learned how cult loyalty is motivating today’s customer in a big way.
In fact, presenters Barry Kirk, Vice President of Loyalty Strategy at Maritz Motivation Solutions, and Mary Beth McEuen, Vice President and Executive Director of the Maritz Institute, said that out of 2.5 billion U.S. customer loyalty memberships, 55% of customers will drop out within the first year.
“Marketers are struggling to keep programs relevant,” said Kirk. “If they aren’t, the consequences can be significant, from a lost opportunity to build relationships, to
lost retention, to a loss of profit.”
Kirk and McEuen said that there’s been a shift from program currency to attention currency. It’s no longer enough to offer traditional loyalty rewards programs, but rather engage customers on a deeper level through a very limited type of currency – attention.
Millenials have driven this shift. They represent a larger demographic than baby boomers and have spending power. They also have different expectations, said Kirk.
“They say, ‘If you want me to engage, it better be interesting,”’ he explained.
They want experiences with meaningful feedback, frequent reinforcement, and experiences that are shareable with their tribe.
It means that customers now put a great value on human connection and purpose and meaning. And they prefer brands with empathy. And this shift is cross-generational, influenced by millennial behavior.
Marketing today should be values-driven with the objective to make the world a better place rather than to satisfy and retain the customer Brands that achieve this, said McEuen and Kirk, have a better chance at creating an emotional connection with customers. And that emotional connection drives cult loyalty.
Four Types of Loyalty
There are four types of loyalty, they explained. True loyalty, when the connection goes past the brand, inertia loyalty, that attracts customers who can’t be bothered to go elsewhere, mercenary loyalty (today the most common) that pays customers to be loyalty – and cult loyalty, that is created when customers believe the brand is a part of their identity.
The task most marketers today face is aligning mercenary, or points-based loyalty programs, with cult loyalty efforts.
It can be done effectively, and both have a seat at the loyalty table, said Kirk. In particular, points-type loyalty marketing initiatives help establish habits and rituals that feed emotional responses that drive cult loyalty. While mercenary loyalty is driven by the desire to acquire, cult loyalty is driven more by the need to bond with others and create community.
“Rituals are imbued with meaning, lead the brain to a positive emotional state, and connect us more deeply into the brand experience,” said Kirk.
If brands can tap into cult loyalty, the results will be significant. More active loyalty members translate to stronger customer relationships for increased program success.