Loyalty is often seen as a phase in the customer journey, but if you really want to approach it well, you should consider loyalty as a separate journey. This journey requires a new strategy. Your data and technology need to be in order, and you need new content. In short, it’s different from your regular marketing efforts.
This article is written by Mi-Choe Emanuelson, Recruitment & Content Marketer at 100procent (Sponsor of the Email Marketing Automation Summit 2024).
Loyalty programs are used to increase customer lifetime value. You not only want customers who spend a lot, but also customers who return regularly. Research from the loyalty platform Comarch found that on average, a consumer participates in 13 or 14 loyalty programs, but feels truly connected to only 3 or 4 brands. 64% of surveyed consumers are willing to provide personal information in exchange for a personal benefit. In this blog, we explain how to turn customers into brand ambassadors using the four pillars of strategy, data, creation, and technology.
The Loyalty Journey
When setting up the loyalty journey, it’s important to know that there are two different forms of loyalty:
- Transactional Loyalty: Customers are loyal because of discounts or gifts. They value loyalty programs and attractive discounts. They don’t necessarily feel connected to your brand, but to your actions.
- Emotional Loyalty: Customers feel emotionally connected to your brand, which is a sustainable form of loyalty. If they could buy the same product elsewhere with a discount, they would prefer the qualitative customer experience they expect from you.
By setting up loyalty as a separate journey, you ensure that your customers have a unique and consistent customer experience across all channels.
What You Need to Set Up the Loyalty Journey
- Data and insight into customer behavior across all channels.
- Good accessibility across all channels.
- Feedback from customers to continuously optimize the journey.
- A mix of email and direct messaging campaigns to reach customers at the right time.
- Dynamic content to show relevant content to each individual customer.
- Advertisements based on customer behavior.
- Monitoring and staying informed about developments in customer behavior and value development.
The Strategy Behind a Successful Loyalty Journey
You want to retain customers and extract more value from them, so you’ve come up with the idea to start a loyalty program. Then it’s logical that you’ll encounter a few challenges, which you can tackle with the right strategy. Ask yourself how you’re going to implement the loyalty journey in practice? Does this fall under marketing, CRM, or is there someone else who will be responsible for this? How do you ensure that the contact moments are well aligned with the regular marketing efforts so that customers are not overwhelmed by messages? What do the loyalty campaigns look like, do you need a different template? How do you use the different channels and how do you deal with customers who, for example, want to redeem a voucher from an email in the store? How do you display the loyalty program on the website?
6 Reasons to Implement a Loyalty Program
- Turning customers into repeat customers
- Collecting (positive) reviews
- Testing new products
- Gathering customer data
- Increasing newsletter subscriptions and other mailings
- Selling specific products
In this blog, you’ll learn more about the strategic value of loyalty and the reasons to implement it.
Data and Loyalty
Now that your strategy and goals have been determined, it’s time to inventory the data. What do you already know about your customers? How much is a customer worth, i.e., what is the customer lifetime value? A loyalty program generates a lot of data. You collect data during every contact moment and every purchase. You can use this wealth of information not only to approach your customers even more targeted but also to better tailor your product offering to the demand. This way, you know better what the customers need, which is exactly what the purchasing department also wants to know.
Create Engaging Content that Connects
With all the data in order, you can create dynamic content and ensure that the messages are personalized. Often, a loyalty program has different expressions, but still in line with the corporate identity. This way, the customer immediately sees that it’s a message about the loyalty program and not, for example, the regular newsletter. By consistently using loyalty content across all channels, it will become a kind of sub-brand for your customers. And you create extra engagement with your brand.
Is Your Martech Setup Adequate?
The loyalty journey presents a great challenge for your martech setup. Customers expect a seamless transition across all channels and a user-friendly experience. Whether someone is in the store or using your app or website. The data from the loyalty program must always be up to date everywhere, and the different channels must work together flawlessly. Your systems must be able to process large amounts of data and ensure that everything is visible and up to date everywhere.
What Do Successful Loyalty Programs Have in Common?
BP was one of the first major brands to start a loyalty program, the well-known Freebees. With every refuel, you collected free points that you could redeem for nice gifts or a discount on a refuel. And who doesn’t collect Air Miles? This loyalty program from Loyalty Management Netherlands has been one of the most well-known loyalty programs for 30 years. By now, we all know the loyalty programs of major brands like Albert Heijn, Hema, and Bol.com. Albert Heijn conquered the Netherlands with personalized bonus offers and various loyalty programs. Whether a loyalty program is successful depends on its user-friendliness. Customers drop out as soon as it doesn’t work smoothly or if the channels don’t connect.
Trends in Loyalty
Gamification: Think of surprising game elements like a quiz, challenge, or reward. It’s all about interaction and engagement.
Sustainability: Showing social responsibility can lead to positive customer reactions. For example, you can offer a sustainable reward. Redeem your points and donate the amount to a charity.
Exclusivity: Customers love preferential treatment and rewards for their loyalty. Exclusive events, early access, and new products in pre-sale always work well. Personalization can also remain high on the agenda. Customers want offers and actions that exactly match their wishes and needs. Let your customers know that you personally appreciate them!
Conclusion
Those starting a loyalty program don’t necessarily expect immediate success. Projects like these require perseverance. First, you need to create awareness, and then customers need to get used to the loyalty program. So, the better you collect feedback, the faster you can optimize the journey. Customers love good news, surprises, privileges, gifts, and discounts. Provide tangible rewards that are relevant to your customer. And use it for extra contact moments that contribute to customer loyalty. Reward your most loyal customers. Be grateful and original!
Author
Mi-Choe Emanuelson
Recruitment & Content Marketeer | 100procent