Boosting Customer Loyalty
Develop and encourage customer loyalty in six key ways.
By John Findlay
Customer loyalty has been on the decline for years. “Must have” brand loyalty has decreased in three out of four packaged goods categories and member satisfaction in loyalty programs sits at less than half for most product categories.We’ve been quick to blame the rapid decline on fickle millennials, but the truth is millennials are one of the most brand-loyal generations. Sixty percent say they are often or always loyal to brands.
So, what’s going on? Some people suggest the decline in customer loyalty results in part from a discrepancy between how consumers think about loyalty and how brands operate their loyalty programs.
Loyalty is an emotional response. It’s a feeling. Brands, however, often treat their loyalty programs as coupon dispensaries, handing out discounts for purchases. Not only does this breed bargain hunting and put you at risk of a price-slashing war with your competition, but it also misses the emotional side of loyalty.
If we want to create sustainable brand loyalty, we need to stop looking at it from a sole purchase perspective. Instead, loyalty programs should be an extension of the customer experience, showing members that they are appreciated and offering exclusive rewards – not only making purchases but for engaging with the brand.
Here are six ways you can improve your loyalty program and boost brand loyalty.
1. Gamify It
The entire point of a loyalty program is to engage consumers with your brand, so they complete actions that drive your bottom line. But engagement in loyalty programs is a serious problem: the average consumer is involved in only half of the loyalty programs they are registered for.
Gamification is a great solution for engaging consumers because it makes it fun – and worthwhile – to do so. There is something in it for consumers, even if that something is just a really fun game. When you gamify your program, it’s simple to encourage members to take actions, such as making purchases, engaging on social media or inviting other people to join your program. All you have to do is reward members for taking those actions.
You can add gamification elements like levels, progress bars, customizable avatars and collectible icons to gamify your program and boost engagement.
2. Personalize It
To create the kind of emotional connection necessary to inspire brand loyalty, you should treat customers as individuals. That means personalizing their experiences.
Personalization can be implemented in some different ways, from letting customers customize their rewards to offering personal recommendations. The key is to use personalization to offer value to consumers. Its main purpose can’t be to sell more of your products; increased sales are a result of good personalization, not the main goal.
The best way to approach personalization is to consider what your customers want. Talk to your audience on social media, poll your current members and find out what features your consumer base are interested in using.
3. Offer Convenience
One great way to show customers you care is to show them you understand their problems. Take a look at your customer journey and find out what their pain points are. Then use your loyalty program to make the experience more convenient.
For example, if you have a lot of products, or products that are only suited to specific customers, you might discover that deciding on a product is overwhelming for your customers. A solution would be to implement a product recommendation quiz in your loyalty program, so a customer can easily find what they are looking for.
4. Award Special Perks
A simple way to encourage repetitive engagement and drive product sales is to have a featured offer that changes regularly. Consumers can earn special perks when they purchase the featured product. This encourages consumers to regularly engage with your loyalty program to find out what the featured product is. You could also personalize this offer, customizing the featured product for each shopper based on his or her preferences and shopping history.
5. Reward More
Purchases aren’t the only way customers show their loyalty. They also recommend your products, talk about your brand on social and engage with your content. All those actions can have an impact on your bottom line – and are key indicators of real loyalty. Yet they aren’t rewardable actions in most loyalty programs.
Instead of only rewarding for purchases, loyalty programs need to start rewarding for active engagement that goes beyond just buying your stuff. Other ways to earn points could include: updating profile information; inviting friends to join the program; sharing on social media; answering polls; and playing branded games.
Having a variety of options for earning rewards shows customers you care about them and their actions – not just your bottom line.
6. Incorporate Thresholds
One of the main challenges with transactional rewards programs is getting consumers to engage repeatedly. Progress indicators (such as levels) effectively encourage repeat engagement because they make it hard for us to stop playing. They tap into our completion instincts; our natural curiosity about what lies ahead.
You can use this instinct to drive engagement with your program by creating a level-based reward structure. In this kind of structure, members try to reach the next level and gain access to exclusive rewards. This helps keep consumers engaged with the program by giving them extra motivation to use it repeatedly.
The bottom line is that your loyalty program has to put your customers’ needs and desires first. You can’t just give customers a few bucks off a product and expect that to keep them around for the long haul. If you want them to engage with your brand, you need to give them a reason. You have to make it worth their while. You must give them a reason to feel loyal.
John Findlay is co-founder of Launchfire, a digital engagement shop that helps leading retail, restaurant, and CPG marketers drive engagement at every step along the path to purchase. You can learn more about John athttp://www.launchfire.com/about or visitwww.launchfire.com.