One of the biggest challenges that brands face today is to find and cultivate loyal customers. Most brands have some sort of program to reward loyalty from their customers. But most of the loyalty programs that I am a part of totally miss the point of loyalty itself.
In general, the expectations ofÂ enterprise customers andÂ consumers have increased significantly. They expect brands to not onlyÂ deliver great products and services, but also acknowledge them as individuals, and engage, excite, and/or woo them to become loyal customers. Add to this the fact that we are today living in a world in whichÂ itâ€™s easier than ever for consumers to switch products and services that donâ€™t match or exceed their expectations.
In this scenario, it is critical that brands have a good loyalty program that works for both the brand and its customers.
How to make your loyalty program more effective
1. Loyalty programs should be for loyal customers
Currently I am part of at least 25 different loyalty programs, each with a different retailer or a business. Does that mean that I am a loyal customer to these businesses. Definitely not. Just like millions of others who enroll in a loyalty program, I was also auto-enrolled by the billing clerk while getting my purchase billed. I understand that businesses need to collect information about consumers and track their purchases and affinity towards their business to make many decisions.
However, getting everyone to participate inÂ the loyalty program indicates to me that the businessÂ does not value the loyalty, but just the business. By doing this, the business also setsÂ an expectation that you will get discounts by being part of the program, andÂ that there may be levels in the program thatÂ entitle you, as a loyal customer, to even more benefits. What this tells me, as a consumer, is that if I want better discounts from the business, I should enroll in the programâ€”nothing more and nothing less.
In my opinion, instead of enrolling every customer into aÂ loyalty program, businesses should be very selective about who gets invited,Â andÂ about what benefits areÂ offered to keep these elite consumers coming back. As Eddie YoonÂ explains, loyalty programs should be defined forÂ superconsumers.
This class of consumers can not only help your brand grow, but it can also play a significant part in your product growth strategy, boosting new innovations and even helping your brand become more relevant. For more information about superconsumers and how businesses can find , engage, and learn from them, read Eddie Yoonâ€™sÂ insightful book “SuperConsumers: A Simple, Speedy, And Sustainable Path To Superior Growth.”
2. Engage people with exceptional experiences
One of marketingâ€™sÂ greatest challengesÂ is to engage people en masse. But engaging experiencesÂ haveÂ a significant impact, eliciting emotions thatÂ make your brand memorable and that make people eager to share.
The most effectiveÂ emotion to elicitÂ is positive surprise. If you canÂ positively surprise your customers, most other emotions generally take a back seat. For example, remember the KLM surprise in whichÂ theÂ company spontaneously gave relevant presents to customers based on their social profiles?
3. Create rituals or traditions beyondÂ just an annual Christmas card
Humans have always been creatures of habit, and we have evolved using rituals or traditions. Think about what kinds of habits you wouldÂ like to instill â€“ in yourself, in how you engage your customers, and in your customers themselves. Habits create traditions; traditions turn into values.
Be mindful not to appear selfish in this area as it will most certainly backfire. Keep your customersâ€™ lives and ambitions central when you are creating rituals, traditions, or habits. Cultures are builtÂ one habit, one ritual, one tradition, and one story at a time.
4. Give your customersÂ a voice, andÂ connect them
Nurturing a great relationship between your brand and your customers is as important as creating opportunities for your customers to discover other customers with similar interests. This is an important pillar that most brands forget when they are building the loyalty programs.
Some common mistakes to avoid
- Too often, loyalty programs are designed based onÂ the technology used to manage the program,Â and not the other way around. It is critical toÂ understand this and avoidÂ this mistake when designing a new loyalty program.
- DoÂ not hide behind customer sat numbers (yes, Iâ€™m talking about the NPS and otherÂ customer satisfaction measurement programs). Averages donâ€™t tell you the full truth and can evenÂ be outright dangerous. ToÂ create meaningful experiences andÂ traditions, go out and meet your customers. Itâ€™s all about people;Â in the end, they make up the numbers.
- Loyalty programs are for loyal customers, not the other way around. You canâ€™t build loyalty among your customers by enrolling them in a loyalty program. Loyalty needs to be earned.
If you are creating a new loyalty program and would like to discuss yourÂ ideas, I would be happy to share my thoughts and ideas with you. You can reach out to me on Twitter:Â @rmukeshgupta.Comments