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When it comes right down to it, a loyalty program is an agreement between a brand and customer. When a customer signs on for a rewards program, they know they’re giving up something invaluable – their information, habits, and behaviors – in exchange for certain treatment from a brand.

Where most businesses get loyalty wrong is they don’t extend themselves beyond the “earn and burn” model. Typically, brands ask customers to do “this and that and have these transactions” to get something for free. Some brands, notably in retail, have very little differentiation between a loyalty program member and another consumer who has simply given their email address to the business at some point. Both customers might end up receiving the same coupons and promotions.

At this point in time, many brands have their sights set on the next generation of shoppers, particularly Millennials, who don’t have the patience to jump through brands’ hoops or complete enough transactions to earn the points for meaningful rewards. When a program is purely transactional in nature – i.e. buy this and get that – the majority of customers fail to make a second purchase the following month.

What customers want is to be able to point to something tangible within a loyalty program and say, “This is why I’m a member.”

Ultimately, a loyalty customer should feel their experience with a brand is different from someone who doesn’t opt into the program. When shifting to experiential loyalty, brands can tap into the emotional connection built with customers, and no longer have to cater to the earn and burn mentality, because they developed a true advocate.

Creating a differentiated experience is something airlines do very well, where other verticals can take a lesson. From the moment a loyal flier makes it through the security line they feel their experience with the airline is geared toward their needs. Flier favorites include priority boarding, in-flight perks, free checked luggage, and upgraded seating. And as the flier’s miles increase, and they feel as though the airline knows them well, their brand experience continues to improve, which in turn makes a flier feel more valued.

Similarly, online brands can create a differentiated experience once their member logs in. Net-A-Porter’s Extremely Important Person program, for example, features a personal stylist, targeted product recommendations and early access to new styles.

However, in the physical retail world, brands often don’t know they have a loyal customer until the checkout line. This is a missed opportunity to cultivate a rich customer experience for the shopper and build brand advocacy with them. By finding a way of early self-identifying – perhaps with in-store beacons, RFID or scanning a member code upon entering the store – the brand can cater to that shopper better. They could offer personal shopping services, private dressing rooms, product suggestions based on previous purchases, refreshments – anything a creative marketing team can develop to offer their most loyal customers the best experience. It could even be as simple as a text letting the shopper know they have a dedicated loyalty associate ready to answer any questions that may arise during their trip.

Such experiences could be that tangible thing customers point to when they enroll in a loyalty program, and the reason they continue to advocate for your brand.
 
Notes:
75% of retailers plan to use wi-fi identify customers by 2019.

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