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Most technology suppliers we speak with point out that brands really need to differentiate themselves in the current environment. The customer loyalty space has changed, they say, and points-based programs are no longer interesting to customers. Brands use to be able to stand out just by offering a loyalty program, but that is no longer the case.
Now, brands need to become relevant to customers and stay that way by offering experiential, rather than transactional, programs. In addition, they need to personalize to their customers, not just because they’ve come to expect it, but because personalization is the basis of the value exchange that any program represents.
To address these very issues, Loyalty360 recently spoke with Mike Brinn, Global Loyalty Director for Pure Loyalty, a division of TLC Marketing. Brinn believes that every loyalty program should endeavor to achieve pure loyalty. Brands that don’t offer such programs won’t remain competitive.
How has customer loyalty changed over the last few years?
Many loyalty programs were built with a bribe in mind, a reward or discount for increased share of wallet. They were essentially discount programs dressed up as loyalty programs, with all their metrics focused on sales. This may have worked for a time when loyalty programs were not as prevalent, and competition was influenced more by location and price. However, customer loyalty today needs to be firmly rooted in how relevant your brand is in your customers’ lives. Is your program relevant enough that it warrants an investment of their valuable time?
We are a global, always-on community with reduced concentration spans. As such, the yield signs that make us stop in our tracks need to resonate with our needs, or we simply keep on moving. Your brand has a story to tell and this story needs to be told. More importantly, it needs to be lived, by customers, through your loyalty program. The days of expecting customers to sign up and use a card for a discount is well in the past.
What is the biggest challenge that your clients face in driving deeper customer loyalty?
Transaction-only led programs do not add any value proposition to you or your members. I buy, I earn. How boring. This approach focuses too much on chasing a points dream and can lead to apathy when that desired reward is always just out of reach. This approach also eliminates the opportunity to open a two-way conversation with your customers.
The biggest change in loyalty is from a strategic approach. Brands have to build non-transaction elements to their programs that are relevant to their customers and their brand values. Content that creates talk-ability will increase social sentiment. Give your customers the chance to be more than just a member of a program. Give them the encouragement and tools they need to live your brand, turning your storytelling into storydoing, and along the way, acquire your most valuable marketing assets: brand advocates.
What is the single most important thing that you have done that has helped a client increase customer loyalty?
Customers are exhausted from and overloaded with endless generic discounts. They want to benefit from something that excites them. We have helped our clients look at their customers as individuals, with specific interests and things that motivate and excite them. We ask customers to nominate their key areas of interest when they register. We have helped customers to be seen as something more than merely a segment or demographic that can be served a generic offering. Through our experiential rewards that are chosen to reflect and remain true to clients’ brand values and vision, we have seen an increase in Net Promoter Scores and social sentiment.
How important is personalization?
If you start with the principal that a loyalty program is a mechanism to learn about, understand, and change member behavior (not a points collection program to provide a discount on future purchase), you have a good chance of success. Why? Because you are on the road to making your communication and offering personal, and this creates a competitive advantage that the competition can’t have unless they have the same data as you.
Personalization also allows you to build emotional momentum that can sometimes live long in the memory. At its simplest level, by knowing someone’s birthday, you can help define that moment with content or an offer that can define that occasion (not just a happy birthday message), and this will build emotional bonds, which circles back to the principle that it’s not about the customer being loyal to you, but you being loyal to the customer.
Our discussion with Mike Brinn offers a lot of relevance for brands trying to differentiate themselves. Like others we’ve heard from, Brinn believes that transactional programs are no longer the hook they once were. Focusing on relevance and personalization, rather than points, appears to be the best strategy that brands can adopt in the current marketing environment.
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