The following is a guest contributed post from Howard Schneider, Senior Loyalty Consultant, Kobie Marketing
As 2017 begins, the majority of marketers plan to devote more of their budget to driving customer loyalty. This makes sense – as the retail space grows more competitive and price comparisons ever more available, marketers are hoping that brand loyalty will keep current shoppers from jumping ship.
But implementing a good loyalty program takes time and effort, and the wrong strategies can be more of a drain on resources than a boost to customer relationships. How can you design a program that benefits you and your customers?
As market leaders look for differentiated and creative ways to engage their customers and earn their loyalty, here are a few tips to guide the best loyalty program practices:
- Differentiate by being true to your brand
First, understand that no two loyalty programs should look alike, although the truth is that many marketers start their program design by matching their competition. Your strategy should play to the strengths of your brand, informed by the reasons customers shop with you in the first place.
Are you a luxury brand known for personalized service? Then your rewards need to go beyond delivering dollars off rewards. That’s why you’ll see a brand like Neiman Marcus offering wardrobe consultations. Are you a lifestyle brand for savvy young professionals? As a fashion brand, you might offer a sweepstakes that gives members an opportunity to be a part of a photo shoot or meet top designers.
Your loyalty program should support what your brand is already bringing to the table. There are dozens of retail programs offering rewards of $5 off, $10 off or more – simply match that structure and you’ve just invited your customers to compare rewards like they compare prices. You may need the dollar off reward for table stakes, but you need to go beyond that to make loyal customers feel appreciated and create emotional loyalty.
- Solve problems for your customers
Solving frequent problems goes hand in hand with differentiating your brand, because the first brand to do it in their industry owns the innovation. Think of how the popularity of Starbucks Rewards burgeoned once the mobile app combined paying for your beverage and earning stars into one quick and easy scan – no one remembers that there was a program prior to the mobile app version of Starbucks Rewards.
Similarly, the Hilton Honors app’s virtual key functionality enables members to skip the lobby and go straight to their rooms. This can save a member as much as 30 minutes at a busy airport hotel after all the 5:00 p.m. flights land and the lines at the desk become reminiscent of the lines for the most popular ride at a theme park. Such features solve problems and provide the brand with a way to show they care about how their members experience their brand.
- Reward customers for helping you out
Loyalty is a two-way street and today’s customers recognize that there is an economic value in posting images of themselves using, eating or wearing your products. You should consider rewarding customers for activities that have a proven hard value to you, beyond their direct purchases.
For example, an increasing number of brands reward shoppers with points for posting online reviews. This gives you valuable feedback about products and serves as word-of-mouth marketing. Additionally, members might earn points for referring a friend who makes a purchase. The trick is to identify the economic value of the activity and award the appropriate number of points for it.
- Integrate your mobile offerings
Let’s face it: not many people will keep your brand’s reward card in their wallet or on a keychain anymore. For customers to adopt a loyalty program, they need an on-the-go experience that is streamlined and convenient. The mobile apps that gain popularity are those on which customers can quickly check and redeem rewards and even pay for their purchase using those rewards in variable amounts or for items in a regularly updated reward catalog.
Combining payment, rewards, offers and coupons in one convenient app supports a frictionless shopping experience. Brands like Target have been piloting mobile apps where customers can access information about their rewards, scan barcodes to check for deals, search store maps and even report transactions missing points by simply scanning their receipt. They can also tweak the appearance of the app based on their liking – a simple perk that personalizes the experience and creates an engagement opportunity.
Customer loyalty is more valuable than ever, and competitive brands are raising the standards for the rewards model. Shoppers expect more from their favorite brands, and they’ll move on quickly if they feel more appreciated with competitors. To gain a leg up in 2017, a strong loyalty program remains a necessity.
