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Some marketers are buying into a pervasive — and incorrect — belief that loyalty marketing is not as effective as it once was.
However, cultivating customer loyalty is actually more important than ever. Competition within all consumer industries is high and driven higher because price comparisons are so easy to do—just open an app or ask for an online price comparison. This increases price matching. When everything is effectively the same price, customers won’t hesitate to turn to your competitors if they can get a better experience for that same price. That is where a quality loyalty program can be your secret weapon to gaining a competitive edge.
The stakes are high for your brand to create engaging and exciting experiences that keep customers returning — which means loyalty programs need to provide more than just a discount. The kernel of truth to rumors about program effectiveness may be due to stagnant results from “set it and forget it” programs that haven’t been updated in years.
Kobie Marketing conducts ongoing research among loyalty program members to determine what motivates shoppers most. The research revealed three tenets that dominate the loyalty landscape: convenience, savings and status. And while customers have always appreciated these perks in a loyalty program, they expect more nuances from their favorite brands’ programs. In the age of the connected consumer, here’s what shoppers crave in a loyalty program:
But what does that look like? In most cases, it means more personalized experiences: early access to products they would like, invitations to events where they can bring their friends, and special information they can use. You can’t just send an email that says “Dear Valued Customer” and expect the customer to feel valued. Today’s savvy customers, who are used to product recommendations based on past behavior, can instantly see through pitch that has not been tailored to their individual needs and preferences. When they can feel that the experience has been customized for them, that is what makes them feel that they have status with your brand.
The key: Know your audience
While overarching trends might help brands refocus and refine loyalty efforts, it ultimately comes down to knowing your customer as an individual and acting on what you know in ways they will find meaningful. Remember, an effective loyalty program can’t be all things to all people.
These differences illustrate the importance of understanding your customers, and tailoring your loyalty program accordingly. That way, your loyalty program will truly differentiate your brand in an increasingly competitive marketplace.
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