Loyalty programs come in all shapes and sizes. Some are basic, some are more sophisticated, while some weigh heavily on points earned, and others seek to leverage experiences.
Loyalty360 talked to Jennifer Browers, Strategic Marketing Director for Loyalty at Epsilon, about this topic and others during an intriguing interview.
There is more and more talk about experiences versus points/rewards, etc. What is your take on this from a loyalty program perspective?
Browers: Experiences are memorable. Transactional rewards are forgettable. Marketers need to get in the experience mindset. And remember, a little goes a long way. Recently, I checked in to a hotel that I often stay at. Upon entering my room, I noticed a tray of chocolate chip cookies that I had “raved about” during my last stay and a complimentary bottle of red wine. While dining at the restaurant during a previous stay, the waiter had made a note through observational data of my “love” for the cookies and made sure it was included in my profile for my next stay. Having this experience upon check-in was delightful and something that I still remember weeks later. It’s so important for marketers to capture observational data of consumers and tie it back to their loyalty program data. It’s a means to help to get to know the customer and provide meaningful experiences and make those emotional connections.
Brands that gain emotional connections with customers seem to have the inside track on long-term loyalty. How do brands achieve this?
Browers: Brands achieve this by being real. It’s about showing the true meaning of their brand, their values, and their people. At the end of the day, people connect with people; people buy from people. Connecting emotionally happens outside of loyalty program initiatives—but the loyalty program is the foundation helping to create the “stickiness.” It’s “Big L” Loyalty (the brand experience) + “Little L” Loyalty (the program) that equates to total lifetime loyalty.
Take Chevrolet, for example. Throughout the recent holiday season, they connected emotionally with consumers by offering their internal employee discount to all those who purchased a Chevy. And to keep the campaign going, this month, Chevrolet is focusing their efforts on the Traverse as being a No. 1 family car, and in their commercials, they surprise future car buyers with their family members who are “packed in” the car awaiting to say hello and enjoy a family visit. Emotional marketing is a journey and the brand is an integral part of it.
Can you talk about the state of customer loyalty, what’s being done well, where the challenges lie, and what’s missing?
Browers: As consumer expectations continue to rise, so do their demand on loyalty programs. Customer loyalty is in a state of transition, or evolution rather to meet the needs of today’s demanding consumers. Loyalty marketers are realizing the importance in moving from strategies overly focused on transactions or discounts to strategies that strive to deliver great customer experiences. It’s these great customer experiences that create the positive emotions that customers can have with a brand. According to a Forrester research report, emotion can have a bigger influence on customer loyalty than effectiveness or ease.
While one of the many benefits of a loyalty program is the ability to collect rich member data, many brands still struggle with how to use and apply the data they collect. Often, the struggle in how to use data is related to finding the right technology, tools, resources, or even the right expertise to do so. But, the brands and marketers that find ways to leverage their data and apply the insights will be more successful in delivering meaningful and relevant customer engagement.
And in terms of what’s missing? Being different. Brands continue to look for engaging ways to stand out from the crowd to create truly differentiated experiences that tug on consumer’s emotional strings. As a professional in the loyalty industry, I’m a member of many, many loyalty programs. And the loyalty programs I’m most active with are those that relate to my values. I participate in Walgreen’s Balance Rewards because I’m rewarded not just for making purchases, but for my healthy activities—my “steps.” It gives me just a little more motivation to get my steps in each day. And, I choose to shop AmazonSmile Prime because part of my proceeds goes toward helping animals in need through the ASPCA.
Can you talk about how loyalty marketers should pursue relevant customer engagement?
Browers: The most fundamental component of relevant customer engagement is “content.” As mentioned above, collecting, mining and applying data is core to being relevant. Behavioral and transactional data is the foundation to curating and delivering relevant content for personalized engagement. Additionally, content relevancy is about leveraging the channels consumers choose to engage with your brand. You need to personalize in the right channel. According to recent Epsilon research, personalization can pay off. Consumers who believe personalized experiences are very appealing are 10 times more likely to be a brand’s most valuable customer—those that are expected to make more than 15 transactions in one year. Additionally, those respondents who believe companies are doing very well on offering personalized experiences shop more than three times more frequently.
How can a “back to basics” approach simplify, yet also enhance, a loyalty program now and in the future?
Browers: We’re all so “programmed” with the technology world we’re a part of, that often, we forget about the basics. A simple thank you. It goes a long way. When’s the last time you received a handwritten note thanking you for your business and your loyalty to the brand? Or, how about a phone call from a real person inquiring about your recent shopping or service experience? These personal touches go a long way.
Don’t overlook the low hanging fruit of back to basics communication. If you don’t have some of these, consider adding a few into your member engagement strategy: welcome program, thank you (for being a loyal member), points or dollars needed for next reward, available rewards dollars to spend, celebratory communications like birthday or program anniversary, and so on.