Differentiation is pretty important for brands these days. In a challenging environment full of competitors, successful companies will be those that figure out ways to gain an edge and to appear unique to customers. Loyalty is one of the best ways to do this.
This idea is corroborated by a recent report from CrowdTwist, “The Loyalty Playbook for Retailers.” To get a better understanding of this report and all it has to offer brands, we recently spoke with Emily Rudin, CrowdTwist’s Chief Customer Officer.
What inspired the Retail Loyalty Playbook? What are you seeing in the market or hearing from customers that sent you in this direction?
Working with so many clients across different industries, we recognize that while there is no “one size fits all” approach to loyalty, there are industry-specific challenges and solutions that exist. We wanted to leverage our experience working with clients across so many verticals by making industry-specific recommendations on how to design a best-in-class loyalty solution. This is the first in a series of industry playbooks.
Do you see loyalty as a solution or partial solution for challenges retailers face?
Loyalty programs, if successfully designed and executed, can provide retailers with the ability to differentiate in a competitive market, drive incremental spend, and increase customer lifetime value, meet their customers’ growing expectations, and make their best customers feel valued by rewarding them for their loyalty. We’re also helping the retailers we work with become more omnichannel by allowing them to engage their customers across all brand touchpoints.
Loyalty is a big commitment for brands. How do you help brands get past the fear of commitment to long-term points liability?
While loyalty programs that offer prizes or discounts in exchange for points are popular with consumers, we can also help brands implement low-liability strategies that drive program participation and customer value in creative ways. For example, instead of offering discounts or coupons as rewards, brands can instead incorporate experiential rewards. Doing this helps drive customer affinity and emotional loyalty to a brand at a lower cost. For example, The Walking Dead Fan Rewards Club offers program members the ability to redeem points for authentic experiences such as set tours and walker makeovers. Another low liability strategy is to provide customers with access to special privileges that are only available to members. Brands that offer privileges and access minimize liability since they often cost a business virtually nothing. For example, Philosophy’s Philosophers Rewards program offers members early access to flash sales.
Another popular option is to offer sweepstakes to increase consumer loyalty and engagement while lowering points liability. Sweepstakes give a business complete control over the cost value of the reward, regardless of the number of entries or points spent. Finally, auto redemption programs are a great way of reducing ongoing financial commitment for a brand. Auto Redemption programs use a pre-determined threshold of points or period of time to generate a reward automatically for the consumer. For example, a consumer who accrues 1,000 points could be automatically rewarded with a $10 discount on a product or given the same amount in online store credit. Expiration dates can also be set with an auto redemption system, urging the consumer to repeat positive consumer behavior and to create a sense of urgency.
Do you feel retailers need loyalty programs to help differentiate in a crowded space?
Yes, absolutely. In our recent Retail Loyalty Playbook, we outline how most customers believe that brands aren’t doing enough to reward them for their loyalty. So, if your brand doesn’t currently offer a loyalty program, you’re already at a disadvantage. Our research finds that customers often choose a brand that has a loyalty program over one that doesn’t. Investing in loyalty and customer-centric strategies can help you truly differentiate your brand offerings, incentivize your valued customers to engage with your brand, and keep your brand top-of-mind when they are considering a purchase.
Yes, each loyalty program has to be designed with their best customer at their core. Obviously, that will vary from brand to brand. Identifying what customers love about your brand helps inform how to build out your program. We recommend that clients leverage existing customer data to understand what motivates their best customers and conduct a customer journey mapping exercise to identify opportunities and obstacles and highlight areas where value can be added with loyalty program engagement.
Proving the case or the value of the program from the start and throughout are key to engendering support across the organization. How do you help clients through this process?
We offer clients support in presenting the case for loyalty, including helping them to identify opportunities and mitigate risks, get buy-in from all departments and handle objections, establish measurable loyalty metrics, and ensure the success of their loyalty initiative.
Conclusion
Overall, it seems that not only is differentiation a necessity, but so is understanding data. Brands don’t have much chance of differentiating if they don’t know how to do so. We look forward to more of these industry playbooks from CrowdTwist.