In its 2023 Customer Loyalty Trends and Perspectives report, Loyalty360 found that, while consumers are looking for more value from loyalty programs, they also expect those brands to share their values and beliefs. As a result, brands are looking to generate more emotional loyalty with their efforts.
However, unlike transactional loyalty, emotional connection is more difficult to measure and plan. As brands invest in their corporate social responsibility (CSR) efforts, they have to focus on finding the overlap between customer and brand values and connecting with them in an authentic way.
Loyalty360 spoke with some of our supplier partners to hear their recommendations as brands plan their emotional loyalty strategies, including which KPIs/metrics to measure and which trends will help transition their programs from transactional to emotional.
Building an Emotional Loyalty Strategy
Determining how to measure emotional connection with a brand is one of the most challenging aspects of planning emotional loyalty strategy. Unlike transactions, tracking how customers engage emotionally with a brand involves more complex and holistic data.
“Measurement should be full circle — use behavioral and transactional data to understand how customers engage with your brand, and setup and maintain an active feedback loop to understand how your customers feel about your brand,” says Cassie Preston, Director of Client Services, CRM & Loyalty of Baesman.
Don Smith, Executive Vice President/Chief Consulting Officer of Brierley, adds, “Far too many brands are focused on unidimensional measures that miss the emotional mark. Specifically, NPS — the most widely used research measure by marketers — is only tapping into a customer’s likelihood to recommend your brand.”
While each individual metric — like the NPS score — is still vital to building emotional loyalty strategy, brands need to use other data collection methods in tandem to better understand their customers.
“Qualitative research including focus groups with program members along with robust social media listening are the best to assess how customers are connecting with your brand,” says Len Covello, CTO of Engage People.
Brands need to look at this variety of data sources to understand what customers care about from an emotional perspective. Because emotional connection relies on shared values, there is no one-size-fits-all formula for measuring that connection.
“Each brand has a unique way of identifying how those data points come together to tell the story of their customer’s connection to the brand,” says Preston. “The most important KPI is the one for your brand that takes into account that full circle view of your customer.”
In addition to measuring the right combination of metrics, brands should include employee engagement in their emotional loyalty strategies. No matter what kind of marketing campaigns a brand runs, the front-line employees create some of the most meaningful emotional connections with customers.
“Employees are the cornerstone of successful loyalty programs,” says Adrian Trzaskus, Digital Transformation Leader at Deloitte Consulting. “They are instrumental in testing and validating the program’s value proposition, motivating customers to enroll, and ensuring that customers’ needs are met.”
Smith adds, “Empowering those employees to deliver ‘wow’ factors is the true key ingredient. Surprising and delighting a customer with an unscripted reward or perk is fun for store associates.”
Since the goal of emotional loyalty is building a connection between the brand and the consumer, employees are able to add that human touch to the overall experience. Additionally, loyal customers are able to build relationships with their local in-store associates. Those relationships give employees a deeper insight into the customer experience. Brands who involve their employees in the loyalty strategy can access that insight and add it to their data sets.
“By fostering a culture of continuous improvement and encouraging employee input, companies can keep their loyalty program fresh, relevant, and customer centric,” says Trzaskus.
Covello adds, “Including and aligning personal objectives to deliver against key corporate performance metrics helps involve the whole organization in improving emotional loyalty.”
The Current State of Emotional Loyalty
Because of needs-based marketing, emotional loyalty has existed for centuries. Consumer psychology reveals that customers are more likely to buy from a brand if they feel understood and valued by that brand.
However, in the scope of integrating emotional connection into a rewards or loyalty program, emotional loyalty is still a relatively new idea.
“Many brands really struggle to find a realistic application for emotional loyalty within their existing programs,” says Preston.
Smith adds, “Most brands are still leaning into traditional promotional tactics, and there is no shortage of spray-and-pray marketing communications that undermine the authenticity of more authentic, personalized solutions.”
Although brands understand the value of integrating emotional loyalty into their programs, many are still in the early stages of transitioning from a focus on transactions to a focus on emotional connections.
“There are additional costs and resources associated with emotional loyalty and difficulty developing promotions that drive emotional connection leading brands to assign these resources to more transactional programs where impact is measured quickly and result are much more tangible,” says Covello.
However, the brands who have invested in focused emotional connection through loyalty programs have seen great ROI.
“Committing to emotional loyalty is akin to a paradigm shift in marketing, and only a handful of innovative brands are truly embracing this new world view that places customer relationships at the center of their marketing narrative,” says Smith.
How to Evolve from Transactional to Emotional Loyalty
Although the methods brands use to measure and implement emotional connections into their loyalty programs, there are trends they can use to increase emotional loyalty. To effectively integrate these trends, brands should carefully examine their technology and program capabilities. Loyalty360 supplier partners recommend brands use:
- Web3 technologies like NFTs and gating
The opportunity brands face with these trends is using them to create authentic interactions with customers. Emotional connections must feel natural and function on shared beliefs.
“We’ve found that creating personalized experiences for customers or, where relevant, aligning and supporting causes that customers care about, are highly effective in strengthening emotional connections.,” says Jenny Spiel, Loyalty Strategist at Deloitte Consulting.
Joe Pino, Senior Vice President, Strategy & Solutions of Clutch adds, “Emotionally loyal relationships are aligned to the brand experience. Customers get a better experience with the brand when their experience is more personalized to their needs.”
“The companies that deliver ultimate emotional engagement from program members are those that communicate effectively and offer a personalized experience that is omnichannel,” continues Covello.
Personalized experience relies on authentic interaction. For brands, this means building partnerships that deliver meaningful value for customers, either through products, services, or philanthropic efforts.
“There is no denying the role philanthropy plays in building brand identity and successful loyalty marketing can embrace a model of dyadic charity,” says Smith.
“The emotional model is getting your customers to act ‘emotionally,’ where purchases are made with a feeling of connection,” says Pino.
This feeling comes when customers feel like the brand understands their values, wants, and needs.
“The engagements that work best are those that are authentic and honest in nature,” says Preston. “Whether you’re sending out an email survey or asking customers to provide a few pieces of data, tell them what you’ll do with their inputs. Make sure they know it matters.”
“Honor and action all data shared by customers,” continues Smith. “If a guest tells you she loves denim and shops for her two daughters, then marketing messages need to take this cue.”
Ultimately, emotional loyalty comes from making the customer feel heard and valued. Through creating authentic interactions and leveraging customer data, brands can encourage loyalty members to emotionally connect with the brand.