When determining whether or not to incorporate an emotional loyalty program into an overall customer loyalty and marketing strategy, businesses need to be savvy about not only what their customers want and need, but what will encourage cooperation within the folds.

Loyalty360 spoke with supplier members to discuss the topic of emotional loyalty, the internal challenges of measuring the impact of emotional loyalty, and what brands can do to gain advocacy of the program from both the front-line workers and upper management.

Challenges of measuring the intangible
Measuring emotional loyalty through traditional metrics and KPIs can be difficult, but that does not mean it's impossible. Brands can begin to quantify their efforts by developing specific, measurable criteria.

Attila Kecsmar, CEO and Co-Founder of Antavo, confirms the challenging nature of measuring emotional loyalty, saying, "Measuring emotional loyalty might not be the easiest task. However, brands can measure the engagement rates on social media. If customers are re-sharing, leaving positive comments under your posts, or telling positive stories about their shopping journey to their friends, it's a clear indicator that they like your brand. Similar results can be achieved by letting customers leave product reviews on the website, or by inviting them to share their feedback via a brief survey."

Jeff Zotara, Chief Marketing Officer at Arrivia, recommends a broader approach, saying, "Emotional loyalty is rooted in delivering an amazing customer experience. That includes meeting our customers’ expectations, providing value in our products and services, and ultimately, delivering on our brand promise. It also means turning feedback into action (quickly) to fuel demand and habitual loyalty. We measure this 'voice of the customer’ through traditional customer satisfaction metrics like net promoter scores and social listening."
The company also focuses on a wide variety of engagement metrics that they believe ultimately express the emotional connection. Examples include:

  • Time horizon from entry to the ecosystem to first purchase
  • Frequency of benefits utilization
  • Annual renewal rates
  • Trial-to-paid conversions
  • Return rate of customers for more benefits
"We're expanding our approach to tune into more passive and real-time check-ins with our consumers, assessing online behaviors like search preferences, potential pain points in the booking path, and ease of use with our products. These more nuanced metrics help us iterate and improve the customer experience to build long-term emotional loyalty."

Says Cassie Preston, Director of Client Services, CRM & Loyalty, Baesman, "Emotional loyalty should always be implemented as a strategy to help drive toward the pursuit of the overarching business goals marketers hope to achieve with a loyalty program."
Additional metrics include:
  • Take rate on the benefit
  • Customer service input – on the phone and front lines in-store
  • What customers say on social media
"Some of these more qualitative findings can really help shape execution of emotional benefits to make them easy to engage in for your customer."

Vesta offers this approach. "Beyond traditional metrics like customer satisfaction, Net Promoter Score and brand affinity, emotional loyalty is driven by a consumer feeling like the brand 'gets' them," says Sue Frech, CEO and Co-Founder. "This can be measured by ongoing customer feedback and insights studies, as well as measuring Customer Lifetime Value and retention rates. When you understand how often your consumers feel listened to, how relevant and personalized they feel brand messaging is to them, their overall brand trust, and overall values alignment between the brand, you can have a firm grasp on emotional loyalty."

Tenerity offers a specific set of goals, stating that emotional loyalty can be measured through a combination of behavioral and emotional KPIs.

Behavioral KPIs include:
  • Repeat Purchase Rates: the percentage of customers you retain who return to place another order.
  • Share of Wallet: the amount an existing customer regularly spends with you rather than buying from competitors.
  • Customer Lifetime Value (CLV): the total amount of money a customer is expected to spend in your business, or on your products, during their lifetime.
Emotional KPIs include:
  • Program Interaction: How often a customer visits the program or engages with the brand outside of the purchase window across all channels. KPIs include views, opens, redemptions, and visit durations. The higher these KPIs, the more engaged the customer is with your brand.
  • Customer Satisfaction: NPS (Net Promoter Score), CSAT (Customer Satisfaction), Service Quality Index, and top box satisfaction are KPIs that help brands understand how your customers like you and give you insights into whether or not they are going to stay as customers.
  • Share of Voice: this is a gauge for your brand visibility versus competitors and how much you dominate the conversation in your industry. It can be measured in terms of mentions and references of your brand in relation to your competitors. However, it must be stressed that share of voice should be paired with sentiment analysis to understand the context of what references to your brand. This analysis also helps to identify potential areas of improvement.
Common denominator in successful emotional loyalty strategy
Successful emotional loyalty programs differ drastically, but at the core, they each know how best to connect with their best customers.

Cassie Preston at Baesman is quick to point out that the purpose of emotional loyalty programs is to be different saying, "Emotional loyalty programs differ in many ways, which is intentional – emotional connection for one brand and its customers means something very different to another brand. It's all about understanding your customer as an individual, as a whole person. Once you understand their lifestyle and how your product or service may serve that individual's lifestyle and make it better– you've found your way to a deeper, more loyal connection."

Sue Frech breaks it down into three key components: personalized engagement, robust (and user-friendly) activities and rewards, and an overall sense of community and belonging.

"Where some programs differ is in the kinds of rewards, the intended audience, and overall brand integration," she says. "Some choose to keep emotional loyalty efforts as a strategy reserved for VIPs and influential consumers, others see emotional loyalty as a mass-audience play to create a funnel of highly engaged consumers. No matter who the intended audience is, successful emotional loyalty strategies consistently show the ability to be one-to-one and one-to-many at the same time."

Dan Jurek, VP of Strategic Services at Lacek, cites successful programs are ones that design and offer one-of-a-kind experiences that simultaneously reinforce brand values. He offers this illustration: a premium golf brand might consider inviting selected loyalty members to play a round at St. Andrews Links, known as the home of golf, with a top-tier golfer. Integrating a brand position into an emotional loyalty experience is a powerful way to create a lasting, positive, brand-connected memory.

Preston also stresses the importance of brands banding together with like-minded partners. "Have a similar or adjacent target audience to a brand that's not your competitor? Great – brand collaborations have been booming in the industry and could mean the opportunity to give your customers access to something they want, but you aren't in a position to provide without the support of a partner. Take advantage of those opportunities and leverage your existing partnerships to gauge whether a collaboration with another brand could benefit you both!"
"Emotionally loyal customers come in many shapes and sizes," says Kecsmar. "For example, a luxury brand that faces low purchase frequency may wish to have brand loyalists who stick with them even if they only make a purchase once every third year, but if they do, they have a huge order value. On the other hand, fast food restaurants would characterize an emotionally loyal customer as someone who orders from them multiple times a week. However, there's one universal trait of an emotionally loyal customer: that they stick to their favorite brand no matter what, even if competing businesses offer better prices or bigger discounts."

Tenerity defines the key characteristics of successful emotional loyalty programs as follows:
  • Loyalty is embedded across the customer journey and all touchpoints. Customers are recognized regardless of their choice of channel.
  • Rewards are transactional and emotional, and delivered intelligently with the right timing, tone and treatment.
  • Personalization is being fueled by zero-party and first-party data. Brands and customers have recognized the power of the value exchange for data which has led to customers willing to share data to receive a hyper-personalized rewards experience.
  • Highly successful programs are helping customers solve problems. For example, in the current high-inflation economic environment - which has led to a cost of living crisis - brands have started offering money-saving, cashback, and discount-based rewards to help customers.
  • Reward programs appeal to customers' social values, including offering rewards that allow customers to support societal initiatives such as carbon offset.
Zotara agrees, stating, "The most successful are those who genuinely know their customer and are attuned to what they want and need. They understand the concept of nurturing and how to build a community and trust around their programs. Trust is key."

In a world with a million loyalty programs and brands constantly vying for a customer's attention, the ones that have built a relationship based on transparency and trust with their customer are more likely to become their go-to. Where they differ is on the level of personalization. Some go the extra mile where customers truly feel they are engaging in one-on-one conversations with the brand. Rewarding customers for non-transactional behaviors — for instance, if they engage with the brand on social media or to celebrate a special occasion like their birthday – can go a long way toward creating that sense of individualized engagement.

"I'm not sure that anybody has fully tapped the well on emotional loyalty in terms of the programs or strategies that are in the marketplace," says Slubowski, stating, however, that some commonalities of best-in-class programs include:
  • A clear emotional affinity hook your brand can tap into.
  • Moving beyond just "Little L" (programmatic) loyalty to also include what we call "Big L" (brand) loyalty.
Successful emotional loyalty strategy dependent on comprehensive support
It can be a challenge for some brands to showcase the benefits of emotional loyalty to key stakeholders or senior leadership. Getting "buy-in" for the program is crucial for receiving the support – both fiscally and cooperatively – from the company.

To attain that buy-in mentality, Kecsmar recommends leading with the fact that emotional rewards can lead to higher engagement rates among members, positive word-of-mouth, and a boost in customer lifetime value.
According to the company's Global Customer Loyalty Report 2022 from companies that are planning to launch their loyalty program in the next two years, 53.6% of respondents specified that their program would be more emotional than rational.

"Emotional loyalty doesn't have to be expensive either," Kecsmar adds. "Highly popular features, such as early access to products and sales do not cost anything, all you have to do is configure the platform accordingly. VIP access to customer service and partner rewards are also cost-efficient rewards."

Rob Fagnani, Co-Founder at Formation, says that the best way to generate buy-in is by quantifying the impact that emotional loyalty has on the brand. "Emotional loyalty creates price realization as customers continue to shop at the brand while competitors offer better deals."

Loyalty specialists should focus on the experiences that the brand creates for its customers that foster trust, recognition, and affinity – and develop ways to track, score, and measure the impact of these experiences on overall customer lifetime value, and not just short-term sales. From there, the brand can build a strategy where its initiatives around emotional loyalty and traditional transactional rewards complement each other.

Jurek stresses the importance of building a fact-based business case that cites credible research. "Provide examples of programs that leverage emotional loyalty—and highlight corresponding member testimonials or executive quotes, which are often available in annual reports and executive interviews."

"I find that senior leadership and key stakeholders really want the bottom line – they want to know what it's going to cost, what it's going to return, and how that will incorporate into their quarterly or annual plans," Preston speaks from experience. "Like all benefits within a program, some solid financial models can help you predict what your emotional benefit set will return – by itself and as part of the larger value proposition. You can use those models to set KPIs and measure against those as you go, to be sure your team has the proof points to validate whether those emotional benefits are driving the program forward."

She adds that with emotional loyalty, qualitative data is just as important as quantitative data.

"What are customers feeling? What feedback loops can you set up in social media, via your contact center, or in stores to understand how an emotional benefit makes a customer feel? Don't forget to incorporate those elements into your report on performance success or opportunity."

Vesta puts it simply, saying that emotional loyalty reduces customer loss, allows for premium pricing, drives new acquisition through brand advocacy, and lowers the cost of advertising, marketing, and distribution.
"If you want profitable customer retention to maintain market share (aka loyalty), emotional loyalty is not optional," says Frech. "Consumers are bombarded by endless choices, they must filter by some mechanism. And that mechanism, far and away, is trust and emotional connection. It's time for senior leadership to evolve from 'retention' into 'relationship.'"

"We believe it has never been more important to focus on the emotional appeal of the loyalty program than it is now," states Travis Markel, Chief Experience Officer at Arrivia. "Despite the post-pandemic availability of travel, in many ways, it has become more difficult for consumers to realize a vacation aspiration."

Emotionally focused loyalty programs recognize this and are reaching out to customers to identify their needs, educating members on how to leverage their loyalty program value, actively interrogating the value they provide, and providing an excellent servicing experience (both as part of the sale and beyond). In an environment where marketplace price parity is often present, doing the little things that add up to an emotional connection based on trust is what will propel a program.

Success contingent on employee advocacy
A brand can have the best emotional loyalty strategy in the business, but if its employees aren’t engaged, chances are, neither will its customers. Especially in light of the workforce shortage, it is imperative for brands to get employees involved and committed to advocating for the loyalty program – both traditional and emotional. But what are the best tactics?

"What we have seen work best is when businesses are transparent and true to their brand promise, values, and vision, they attract employees who share those beliefs," says Raghunathan. "When businesses make employees feel appreciated and understood, they deepen employee emotional loyalty which increases their willingness to advocate for the brand and its loyalty strategy."

Jennifer Strauel, Chief People & Diversity Officer at Arrivia agrees, saying, "It starts at home. Companies sometimes have difficulty building internal loyalty and getting employees to engage with the core mission. An employee who feels valued and is rewarded in the workplace will become a good ambassador and advocate your strategy."

Raghunathan adds that when employees are empowered with in-depth information about the customers they serve and the products they offer, they are better equipped to create lasting, personalized customer experiences. Rewarding employees based on the sentiments customers exhibit after employee interactions is a good way to retain top talent and ensure each customer interaction is exceptional.

Preston says that an organization’s best employees are the individuals that embrace the company mission as their own and share the organization’s values, and recommends including teams in the process of determining what emotional loyalty means for the brand. "Get the perspective of your second or third shift contact center staff, and the executive in the office next door, and everyone in between; you won’t regret it."

Kobie recommends that its clients encourage employees, especially those on the front-line, to be as involved and enmeshed as impossible in the loyalty program, which includes everything from enrolling to participating as active members.

“This creates first-hand knowledge of the program, how it works, the benefits that you can get from it, and overall allows employees to become authentic advocates for the program," says Slubowski. "Another best practice I'd recommend is to bring your employees along for the ride when making decisions pertaining to loyalty. Your front-line employees have the best line of insight into how your consumers feel since they’re consistently engaging with your customers first-hand each day. Plus, psychology tells us that your employees are more likely to embrace the program and be outwardly enthusiastic about it if they feel like they had a hand in the process."

Lacek recommends developing an online training curriculum that leverages game dynamics to create a little friendly competition among employees while they learn about the loyalty program. Other strategies include:
  • Incentives for completing training
  • Spot bonuses for properly representing the loyalty program to customers
  • Good-humored matches among managers that pit stores or regions against each other
 
 

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