There is a discrepancy between what customers want and what brands are delivering when it comes to loyalty.
Recent research found that while 72% of customers say they are willing to stay loyal if offered discounts and rewards, half of brands say they don’t currently provide any sort of customer loyalty rewards. Considering this, we can predict it’s only a matter of time before brands must start making loyalty a critical part of their business to influence where customers choose to spend their money.
Crucially, loyalty schemes can’t be shoehorned into marketing on top of existing job roles. They must be treated as a separate project given they require a time and financial investment from the business.
Redefining loyalty strategies clearly needs to be top of mind for brands as they continue trying to keep customers loyal and feeling valued. Or, they run the risk of losing revenue in what is already a tough economic climate.
Understand the numbers
There are alternative customer retention strategies that are often seen as more quantifiable than loyalty. But a well-structured loyalty programme – aligned with business goals – can drive results for the company.
According to Antavo’s Global Customer Loyalty Report, 81% of loyalty programme owners feel their programme helped them overcome the economic downturn. This was through nurturing existing customers that provide their core revenue.
Crucially, any retention programmes must leverage transactional data and insights to define the challenges with retaining customers. Then, create a strategy around solving these barriers to loyalty. Whether this is rewarding second purchases if the issue centres around people who only buy once. Or identifying common behaviours in the most valuable customers – such as purchase frequency, basket size, or product variety. And then creating a structured loyalty programme for a customer that provides an optimised experience to suit their needs.
Don’t let your creative muscle weaken
Alongside the data and insights needed to develop a credible programme, innovation is needed to change customer behaviour. Without innovation, companies are unlikely to stand out in their respective markets, which are already saturated with points schemes and rewards programmes.
However, providing a fresh programme to customers, along with clear and simple communications, all while retaining sight of commercial objectives can be challenging. Whether this is implementing a programme which allows customers to secure a financial reward in return for unlimited use of a product; exchanging their points for rewards; or creating a programme around a company’s value proposition. For example, a sustainability-focused loyalty scheme.
It can be difficult to balance the innovation needed to achieve business objectives against ensuring customers understand and use the rewards the loyalty programme offers. All while balancing the time and financial investment available across the organisation.
However, this is where marketers need to make sure they are constantly flexing their creative muscles with effective problem-solving and reviewing learnings from other brands to see what could work for them.
Get into the customer’s mind
Understanding the customer involves asking what makes them tick, and then using these insights to form a programme that works for everyone. Whether this is a transactional loyalty scheme or one that promotes a more emotional response from customers.
Brands already have the data programmes in place to access the insights they need to attract and retain their target audience; they just need to use their data in the right way. With third-party cookies in the process of being eliminated, and brands entering the shift to a first-party data strategy, business leaders have a job to do in making sure their customers feel comfortable and incentivised to share their data.
Brands have an education piece to do here to make sure customers understand where their data is being used and how they are benefiting from it being shared. Loyalty schemes are the vessel through which this is possible, as they help to create a symbiotic relationship between brand and customer.
Final thoughts
It goes without saying that building long-lasting loyalty with customers needs a dedicated focus to be successful – it’s not a side project tacked onto a wider marketing programme.
Markets are only becoming more saturated with the increase in available products and services. And companies have a job to do in making sure they are the chosen brand for customers in an ever more competitive and economically challenging time, given rising costs and inflation.
Fundamentally, brands need to understand the value that a loyalty programme can bring to their business. From here, they need the right balance of innovation and data insights to keep customers coming.