A Loyalty Program Should Support a Brand’s Value Proposition and Its Customer Experience

There are varying strategies attached to loyalty program performance, but some tactics should be universal to ensure long-term success and growth.

Loyalty360 talked to Michela Baxter, Senior Director of Loyalty at HelloWorld, about this intriguing and relevant topic for loyalty marketers.

How can brands shake up their loyalty offerings without shaking up their business?

Baxter: First, I think that loyalty programs should support a brand’s value proposition and their customer experience, not shake it up or create a new experience. One of the first things that brands should be doing is listening to their customers.

If they’re seeing participation in the program wane, or if metrics are starting to flatten out, go to your customers, ask them what their pain points are, find out what they want and need, and develop strategies and tactics to really enhance and evolve the program around those wants and needs.

This isn’t a revolutionary idea, for sure, but in the age of Big Data where we have so much information, we tend to rely on the data in front of us, when we should be stepping away from the laptop, and going and talking to our customers and really understanding what they want from their loyalty program.

What are some of the new trends in loyalty that you’re seeing?

Baxter: Blockchain is a huge emerging trend. It is a new technology that will start disrupting the loyalty marketplace.

There are some interesting evolutions to Sephora and Amazon. They launched brand-owned social channels for program members (Beauty Insider Community and Spark, respectively). It’s showing a reversal of trends of brands using third-party social networks and a customer touch point. We’re seeing that start to reverse with brands wanting to generate their own platforms where they can.

The second thing is brands wanting to control and own more of the customer experience, and developing their own platforms is one way to do that and, at the same time, they’re owning all of that data as a result of engagement with those platforms.

Who are some of the brands that are paving the way in loyalty with non-traditional tactics?

Baxter: We hear a lot about the trailblazers like Amazon, Sephora, and American Express. But, we don’t talk a lot about the emerging programs bubbling up in this space. There is a lot of movement around the payments space. Drop is a great example of a new player in the U.S. market.

Drop targets Millennials, and they earn rewards for everyday purchases at their favorite retailers simply by linking their credit cards that they use at those retailers. Being able to make the payment experience frictionless alleviates a lot of the pain points that customers have today with loyalty programs. It’s something we’ll continue to see more of in the near future as far as loyalty evolutions.

Which industries seem to be behind the loyalty curve? Which ones are ahead of the curve?

Baxter: Industries that rely on the traditional view of loyalty (earn points/get discount or offers). QSR stands out as one that fits that mold of the traditional view of loyalty. Unfortunately, you’re creating more transactional relationships with customers. The irony here is that QSR has a lot of opportunity to enroll some of those customer touch points to create emotional connections. They’re just missing the opportunity to do so on a broad scale.

In retail, on the opposite side, there are pockets of brands that are really leveraging unique experiences, exclusive services, and brand engagement to build stronger loyalty with their customers. Amazon, Sephora, Nordstrom, and American Eagle are looking beyond transactional elements of their programs to deliver deeper relationships with customers.

How can brands use loyalty programs to measure consumer sentiment and the customer experience? How can these findings be applied across all businesses?

Baxter: Loyalty programs present a great audience to go and ask your best customers about how they feel about your brand. How you do that can vary; survey, poll, or you can look beyond traditional measures and look at social sentiment of the program, dig into customer service data and dig into where your biggest customer complaints are coming from.

Look at metrics beyond just what you’re getting from transactional data, and you’ll see information start coming up about how you can improve your operations, your employee training, etc. Just by listening to some of those insights.

Baxter’s conversation with Loyalty360 can also be found here.

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