Published September 10, 2020
Customer loyalty programs are brands within brands. How they resonate with consumers depends on a sound loyalty strategy and execution. As a retailer, you can evaluate your strategy and execution by gauging customers’ reactions to their loyalty experience. What might your typical customer be thinking about your program as they’re waiting to check out?
More and more retailers are catching onto the fact that their loyalty programs have the potential to fit into the second ‘brand feel category.’ That’s because loyalty shouldn’t just be a program—it’s a relationship. To make your loyalty experience into a vehicle for true relationship building (and the positive brand feel that results), it should meet four customer needs:
Obviously, the second example above meets all these customer needs. The program in the first category…well, not so much.
So how can retailers keep their customer loyalty program from being less like a commodity and more like a relationship? Data and automation. These make sure the program is capturing as much customer data as possible, and as efficiently as possible, to serve up a personalized loyalty and rewards experience across customer touchpoints and interactions.
First, for purposes of evaluating a current program or launching a new one, it’s useful to take inventory of the different types of customer loyalty programs available.
While there are many different kinds of loyalty programs, there a few trends that impact all of them, starting with what makes them successful. There’s no doubt, loyalty programs that create an ongoing, personalized relationship with the consumer have a bright future:
Until now, most retail loyalty programs were free. But in an effort to provide even more value while differentiating their loyalty program and enticing shoppers to come back regularly, some retailers are rolling out premium loyalty programs with more regularity. These fee-based, member-only programs have a lot of win-win potential:
The growing popularity of premium programs is a strong indication that consumers are more than open to enrolling if they see value in them. Data, personalization, machine learning and artificial intelligence—and a POS platform that can easily integrate it all—can elevate your customer loyalty program into a personalized relationship that increases customer lifetime value.
To achieve loyalty program personalization, you’ll need to commit to learning as much about customers as you can. As mentioned above, the critical factor here is data. Tools such as customer loyalty software are available to enable you to build a data-driven loyalty program, but what matters is how you use the data:
It doesn’t matter how great your loyalty program is if no one knows it’s available. To get the adoption and engagement you need to create the best return on investment, try varying your promotion methods.
One program includes five ways to recruit new members:
For even more reach and engagement, brand ambassadors are your force multipliers. They form the backbone of your loyalty referral program. As independent third parties, they lend credibility to your program promotions and can provide a boost to enrollment.
Here are some ideas for operationalizing an ambassador program:
To recap: Keep your focus on using your loyalty program as a means to build stronger relationships with your customers. Analyze the available data on any interactions they have with your brand. Learn their preferences. Personalize your program to the preferences.
You’ll know it’s working when they tell you they feel valued, they’re in control, they’re being rewarded for their loyalty and they’re getting rewards to spend.
Don’t forget to keep the conversation going with loyal shoppers over time. Try conducting surveys or focus groups to confirm you’re on the right track. And if you have the right loyalty platform that integrates directly into your POS, ecommerce and analytics, you can track their loyalty program activity levels, spending and purchase habits to give you all the evidence you need.