That is a very intriguing question in the customer loyalty world, reversing the traditional model.

Loyalty360 asked Evan Magliocca, brand marketing manager for Baesman Insights & Marketing, for his thoughts on this compelling topic, among others.

How can brands demonstrate loyalty to their customers?
Magliocca: There are many ways to demonstrate brand loyalty to customers. What’s important is it shows altruistic recognition and proves to customers that they’re special and meaningful to the brand and its cultural fit with the member.

Simple tactics include surprise and delight gifts, free points events, and exclusive brand content—each given to the customer for no return transaction. More sophisticated options focus on broader strategies of innovation for the customer.

Under Armour is a prime example with its suite of exercise and health apps. It provides daily benefits and huge impacts to the wellness of its members with no obvious reward to Under Armour. Although Under Armour is most likely collecting invaluable data points and each app links back to UA Record which aligns to its e-commerce platforms.

The idea is to go beyond transactional loyalty and transform it into emotional loyalty. It’s much more valuable in the long run.

Philosophy and mindset to demonstrate loyalty to customers?
Magliocca: What we always tell our clients is that loyalty isn’t just a program, or a strategy, or a tactic. It’s a mindset. And it needs to be intrinsic throughout the company.

A couple years ago, the big buzzword was “customer first,” always think about the customer experience. Well, now the paradigm is loyalty first.

Always consider how brand and customer can mutually benefit, align and advocate for each other. It’s prioritizing lifetime value before the quick win.

Do you think brands do this?
Magliocca: Retailers, especially, are in such a tumultuous time right now. Store traffic is plummeting and there’s a new technology disrupting the industry on what feels like a daily basis. There’s a lot of worries to keep CMOs up at night.

We find loyalty sometimes gets lost in the pressure-packed moments. The stressful moments when marketers scramble to make up ground.

What’s interesting is there couldn’t be a better time to focus on loyalty than when the brand is in dire need. It’s the old 80/20 rule—80% of sales come from 20% of the customers.

If you’ve shown loyalty to your valuable members, you can rely on them to make up some of the slack in tough times. It gives brands a better foundation.

I can’t stress enough how important it is for CMOs to just have room to breathe and focus on what matters long-term instead of scrambling because of this morning’s flash report. Good loyalty programs are designed to help solve those issues and we can’t put a price on how valuable that is to marketers.

How are brands doing this well?
Magliocca: The earlier use-case of Under Armour shows a great example of utilizing an innovative app suite to provide mutual benefit to the member and the brand.

Amazon Prime is another great example. Obviously, Amazon is cutting into retail quite drastically, but there’s a reason Prime members are so loyal to Amazon. 

It’s also interesting because Amazon really doesn’t have much cultural clout—it’s mostly a third-party distributor with a broad, seemingly fragmented array of services. Two-day shipping and Amazon video? Who would’ve thought that would work?

But if we flip that perspective and look at it through the member’s eyes, it’s quite illuminating. When people think Amazon, they think about the fastest shipping in retail, truly innovative services, and most importantly, transparency and trust.

What is your advice for companies?
Magliocca: Every program is different and it needs to be tailored to the brand’s culture, strengths, and weaknesses. Even so, there’s some overarching counsel that each brand can use to its benefit.
Baesman and our clients focus on these key themes:

  • Everything is measurable.
I mean everything. If your agency says otherwise, find a new one.
  • Eat, breathe, and sleep incrementality.
You need to prove your worth the investment. You don’t get to show customers any love unless you’re generating revenue.
  • Focus on the end-goal—lifetime value.
The mindset and program foundation is long-term. Don’t be shaken by the ups-and-downs of the industry.
  • Loyalty isn’t created equal.
Not every member is a good member. Focus time, energy, and attention on the ones that matter. It’s OK to let the little guys burn out. You’ll build better, emotional loyalty in the long-run.
  • Loyalty is customer transformation.
Every strategy, tactic, goal, or approach should have one North-Star goal. Transforming top members into advocates. 

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