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The loyalty landscape is changing. While transaction-based programs are still abundant, programs that offer unique experiences are becoming more and more common. (So common, in fact, that we dedicated a recent webinar to this topic.) In this environment, brands need to differentiate, harness data, and create emotional connections. Not long ago, we sat down with Michela Baxter, Senior Director of Loyalty at HelloWorld, to discuss these very issues.
HelloWorld, A Merkle Company, is a digital marketing solutions company that specializes in strategizing for and developing loyalty initiatives and programs. The company offers promotions such as sweepstakes, games, trivia, and contests to drive consumer acquisition, engagement, and retention. It helps brands build loyalty programs with promotional overlays that go far beyond traditional sweepstakes and leverages established game theories and mechanics to drive real loyalty program results. These programs are designed to reward customers and create brand advocacy. In addition, the company collects customer data to generate insights and enable communications across channels. Its platform offers custom software development, hosting, analytics, and an SaaS loyalty offering.
How has customer loyalty changed over the last few years?
Points-based programs are still king in the loyalty world, but we’re seeing more brands embrace the idea of loyalty coming from the consumer experience, not just a stand-alone transactional program. Marketers today talk a lot about little and big “L” loyalty. We’re seeing brands move more toward the big “L” approach where the outcome is more than a program, where loyalty practices are woven across the entire customer journey, creating a connected brand experience that the consumer feels at every touchpoint. The goal: to create a deep-rooted sense of value that is generated over time, from experiences that are personal, meaningful, and memorable.
What is the biggest challenge that your clients face in driving deeper customer loyalty?
Data—collecting it, consolidating it, analyzing it, and using it in meaningful ways—is a consistent challenge. Brands recognize there is value in their loyalty data and are trying to figure out how to create unified experiences and put the data to work across consumer touchpoints. However, this is all happening in the context of multiple high-visibility data breaches, like Marriott and Cambridge Analytica, and new data security regulations, most notably GDPR, that leave consumers feeling skittish about brands using their personal information and behaviors in marketing efforts.
What is “next big thing” for customer loyalty?
Understanding the “why” in every action. At HelloWorld, we want to know what makes humans tick. What psychological forces compel us to act? How do brand marketing experiences influence consumer behavior? Why is understanding motivation important for engaging consumers? Marketers will be applying approaches rooted in behavioral science much more in the future. Keep your eye open for applications in gamification, behavioral economics, and habit building to sparking engagement and long-term affinity.
What is the future of customer loyalty?
The role of emotion in consumer loyalty is becoming more important as technologies evolve, consumer expectations shift, and our understanding of what drives consumer behavior deepens. Emotional elements will influence the shape of future loyalty approaches. It is about using the tech and the data to inform and create seamless touchpoints of value. At the end of the day, customers want to feel appreciated, not just receive a tangible reward for their purchases. Marketers who want to connect with empowered consumers should reexamine traditional approaches to building loyalty and rethink how they measure it.
How important is personalization?
Delivering relevant experiences is no longer a nice-to-have in consumers’ mindsets today; it’s an expectation. An absolute must. However, we’re seeing consumer attitudes about personalization shift. In HelloWorld’s 2018 Loyalty Barometer Report, 77 percent of consumers said that loyalty programs should have personalized rewards. In our 2019 report, consumers told us that they are less comfortable sharing their data, even when they know it is being used to make their rewards experience more relevant. While consumers are willing to share some information in exchange for a more personalized experience, marketers should be careful to ask only for the data they really need to create a more meaningful program.
What does “authenticity” mean to you?
We are all looking to make meaningful connections—with our families, friends, work—in everything we do. This extends to feeling good about the choices we make in the brand products and services we purchase. Authenticity in brand marketing means having a unique voice, showing a bit of humanity, knowing consumer preferences and communicating those at the right time, and not being a “one-note” corporate entity. To take this a step further, brands can weave what they stand for into their consumer marketing so their audiences can feel connected to their social mission. Consumers are looking for good product, appropriate price to value, but also feeling good about how they spend their money.
Our discussion with Michela Baxter offers a few significant takeaways. First, brands need to plan for the fact that the loyalty space is changing, that it is starting to emphasize experience over transactions. Second, brands need to harness data to adapt to this changing environment. Last, brands need to focus on personalization, as this is the best way to make experiences relevant to consumers. If a brand can bring all of these together, it will more than likely have a very successful program and very happy customers.
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