Simple question, multiple answers.
Working in the loyalty industry means that I am constantly rediscovering, re-evaluating and reinventing what the definition of loyalty means to me. Loyalty itself can represent a multitude of things to different people, so perhaps it is best if one first reviews the true definition of loyalty, otherwise how do you deliver on the promise?
1. the state or quality of being loyal; faithfulness to commitments or obligations
2. faithful adherence to a sovereign, government, leader, cause, etc.
3. an example or instance of faithfulness, adherence, or the like
This definition is fine for understanding the basic concept behind the word ‘loyalty’ but loyalty is so much more than that. The standard dictionary definition misses the key concept which most of the top loyalty blogs and companies refer to throughout their content – the concept of:
Reciprocity is the word that I believe, sums up the essence of what loyalty should be today. In this new digital age, customers are the ones who shape the agenda; they have the power and influence to control the outcome. With a wealth of information at their fingertips and the ability to search the internet for answers, customers have become empowered and informed. They make decisions for themselves, independent of company advertising and propaganda.
Blindless loyalty is a thing of the past. No longer do customers devote themselves to a business or brand when the perception is that they gain nothing of value in return.
As a result customer retention strategies should be at the forefront of business planning. The question to ask is how can your business forge an effective loyalty program that is meaningful to your customers and keeps them coming back for more.
The questions I ask are: Why does a customer become loyal and how can this be achieved?
Loyalty implies a mutual relationship. This means reciprocity is key, where a metaphorical handshake takes place between the parties to this relationship i.e. there is a give and a take on both sides. A customer will give you their custom and keep coming back to you if they perceive you value their patronage.
So, how does one add value you ask?
This is a good question.
I believe it is when your devotion to your customers becomes apparent. Your business needs to be seen as personable. Your customer needs to feel recognised; made to feel special, possibly unique and looked after. This creates endless value.
Offering Free items or discounts?
A loyalty program in its classic and most basic form will see that the customer receives incentives and rewards for spending money or the number of times they visit. For instance, receiving a freebie (e.g. buy 9 cups of coffee and get the 10th one for free) or a discount on the product or service purchased (e.g. members receive a 15% discount on winter clothes or spend over $100 and get $10 off).
These types of incentives, however, sometimes only work to discount the brand’s integrity as many of these customers only support the brand when the price is right, that is they become ‘bargain hunters’ rather than loyal supporters.
The reciprocity factor is missing.
It’s the difference between going to your closest coffee shop 9 times to get a freebie on your 10th visit, only never again to be seen in that caf (not that they would notice anyway) versus walking a kilometre to visit your favourite coffee shop with that friendly barista, Andre, who greets you by name and writes quirky quotes on your coffee lid.
Establishing an Emotional Connection?
My recipe for loyalty success: Create a point of difference. Make your customer feel special. Turn them into your best friend! Personalisation and attention to detail is essential for this to work.
This type of loyalty ensures reciprocity is at its finest. A business or brand creates an impact and establishes an emotional connection with their customers through a great product, brilliant customer service and/or the construction of a ‘wow’ moment.
This formula guarantees to turn consumers into lifelong customers because they trust your business to deliver and do a good job of it as well.
They feel valued. And because they feel valued, there is the multiplier effect not only do they support you BUT they promote you as well.
Example: This sometimes includes going that extra mile to make your customers happy, as seen in the following YouTube clip.
Make it a Game
Turn loyalty into a game. This can be extremely successful because it gamifies loyalty, turning something that can become mundane into a fun, entertaining and exciting experience for the customer. Customers still receive freebies and discounts but at unexpected times, so the process of receiving these benefits turns into a challenge or surprise.
This can work extremely well through digital media, in the form of an app or a business’ social media page.
This is exciting for businesses because it means that they can offer the customer more than just physical rewards for their loyalty. Loyalty suddenly becomes fun and so they become engaged on a whole new level.
Example: Starbucks has adopted this strategy well. In addition to discounted offers, their new loyalty app delivers experiential rewards that includes frees songs, movie trailers and special promotions to loyal customers that engage with the brand.
- Add value to your customer, show them you are devoted
- Be personable so they know you care
- Make them feel special (treat them like your best friend)
- Make loyalty fun!
Where is Loyalty Heading?
The digital age is revolutionising the face of loyalty as we know it. I think that we are in for extremely exciting times. Mobile technology will cultivate closer real-time engagement with customers and if used effectively, will provide opportunities to create, nurture and take customer loyalty and B2C relationship opportunities to a new level.