One thing that dog-owners have undoubtedly learned from their dogs is loyalty. The constant devotion, companionship and service offered by man’s best friend constantly raises the bar for humans in our own relationships, and helps us understand what loyalty really means. Thus, the perfect segway for customer loyalty and National Dog Day!
Strong relationships between a brand and its customers help a brand to distinguish itself from competitors, but also in developing loyal customers that buy more, pay more and refer more. However, it’s not transactions that drive loyalty, it’s the emotional connection. When brands lock customers into contracts that don’t work, saturate them with fees, penalize them for not spending money or referring business, they’re not adapting to their customers – they’re trying to change them.
Companies that adapt to their customers work towards a shared goal and express appreciation for shared accomplishments. This is what makes customer loyalty programs so powerful. A loyalty program tells customers that their business is meaningful and that the brand values the relationship. However, 81% of loyalty members don’t know what their program benefits are or how and when they’ll receive them, stating this as the top reason why customers aren’t loyal to the brand.
So how can companies create loyalty programs that work?
1. Set achievable goals for customers
A recent study was performed on a car wash business. Two sets of customers were given two different rewards cards. Customers could get a free carwash if their cards had the appropriate amount of stamps. One set of customers received a rewards card with 8 blank stamp spots. The second set of customers received a rewards card with 10 stamp spots, but with 2 out of the 10 already stamped. Surprisingly, the study reported that the 10 stamp group completed their stamp cards over the 8 stamp group. Why did this happen? The study cites success factors including: giving customers a clear goal, setting up clear actions for customers to take and acknowledging advancement to make progress achievable.
Starbucks does this perfectly by laying out achievable goals in their rewards memberships.
2. Gain momentum and go viral
Using social networks to run an online sweepstakes, daily campaigns or loyalty bonuses are a reliable way to increase visibility. Success is greatly driven by competition and helps amplify a brands voice by demonstrating the consistency of the program.
This Taylor Swift campaign encourages fans to enter the contest by connecting on social media and sharing the contest to score points for more entries.
Pepsi seems to know the value of word-of-mouth marketing. The brand takes a different approach by engaging mobile users by offering free T-shirts for selfies that promote their latest campaign.
3. Obtain valuable customer profile data
The more insight a company has into the customer’s life, the more relevant their marketing messages can be. Collecting information like gender, birthdate, mailing address and phone number isn’t an easy feat, unless there’s an incentive. Lancôme offers their customers points for more than just purchases – they can get points by connecting on social networks and by adding data to their profile information.
Brands like Lancôme, Sephora and Pepsi capture this valuable information to hyper-personalize a customers experience.
4. Offer experiences instead of discounts
An average household is a member to 29 loyalty programs, but only uses 12 of them. These loyalty programs typically give customers benefits like free merchandise, rewards, coupons and even invitations to special events. However, research shows that while discounts are important, people come for the benefits and stay for the experience. In other words, customers want special treatment and offers that are not available to other customers who aren’t in the program. Companies like Sephora and Royal Caribbean invite members to exclusive events to enhance their brand image and create excitement around the brand.
United Airlines allows travelers certain ‘members-only’ perks based on reward levels – like free checked bags, priority boarding and United club passes.
5. Create strategic partnerships
Creating a coalition with a strategic partner can be an effective way to grow a customer base while satisfying the needs of an everyday customer. A strategic rewards partnership shows customers that you care about them and their needs.
Here’s a great example from Shell’s partnership with the grocery chain Ralph’s. As customers shop at Ralph’s they gain points that can be used on gas discounts at Shell.
A successful customer loyalty program is built upon a groundwork of clear value propositions, rich program benefits to the subscriber and relevant offers that entice and excite. Furthermore, addressing technology challenges with customer and marketing data collection, CRM application, segmentation and omni-channel integration ensures seamless implementation and meaningful messaging.
Clearly defining ROI success metrics (such as interaction over clicks and lifetime customer value over purchases) sets the stage for a lasting and mutually beneficial relationship.
Do you know who the best welcome program creators are? BlueHornet of course! Contact us today to see how we can help you go from subscriber to loyal, raving fan.