Loyalty As A Behavior, Not A Tactic

0aaPatrick Reynolds SessionMSuccessful loyalty programs are rooted in mutual understanding and fair value exchange — not just of goods and services, but of information. Customers agree to grant brands access to information about their habits, preferences and behaviors, IF brands agree to use that information to deliver them customized recommendations, offers and experiences. In fact, only by demonstrating an awareness of past and present engagements can mutually beneficial future ones be created, maximizing lifetime value for the brand and satisfaction for the customer in the process.

A New Day Has Dawned For Consumers

Loyalty programs were once a way for individuals to demonstrate “loyalty” to businesses — buy four widgets and get the fifth free. Modern marketers are reinventing the value exchange to be more about a business demonstrating its loyalty to its customers, by providing each customer with content, offers and experiences based on their individual customer profile and stated preferences. Only then will customers demonstrate their loyalty in exchange, with greater frequency, bigger baskets and recommending the business to their social graph. Win-Win.

To make this quid pro quo happen, “Loyalty leaders invest in ‘listening architectures’ to capture, analyze and act on customer feedback across internal silos in near real-time,” according to a recent Accenture report.


Aside from necessary (and often modest) technical investments, here are some other strategic recommendations to join the new wave of marketers building their brands from the inside out.

1. Elevate your relationships.

Loyalty is about more than just transactions. Reward people for engaging with content, taking surveys or referring a friend. Use these levers to engage with your customers between transactions, as well as to motivate the next best transaction. Living from transaction to transaction only invites ‘race to the bottom’ competitors in an increasingly commoditized world. Thinking longer-term is paramount.

2. No more pushing cat food on dog lovers (apologies to David Verklin).

Any incentive is only as good as its appeal to the customer. Even big discounts don’t generally compel customers to buy products they don’t want — or have just purchased already. Leveraging a dynamic customer profile, use past purchases to inform future ones. Couple the right product offering with the right incentive and you generate incremental activity.

For example, if you have a customer who comes to your coffee shop every morning for coffee, you could give that customer a free coffee as a thank you for his or her patronage. That could be viewed as a ‘nice’ thank you or as margin erosion. In the view of many, discounting to those willing to pay full price is a no-no. A free bagel tomorrow morning or an offer for an iced coffee in the afternoon (or any other thing but a free coffee that the customer was already planning to purchase) makes more economic and strategic sense. Upleveling a two-buck-a-day customer to a three- or four-dollar-a-day customer, even just once a week, has hugely positive financial implications — and you’re still surprising and delighting one of your best customers.

3. Build off your base.

Maintaining your customer base is absolutely critical to achieving sales objectives. Acquiring customers is expensive and time consuming. Loyalty programs not only keep your base solid, they expand it. By rewarding your best customers for referring their friends and contacts, you can significantly lower acquisition costs while simultaneously increasing profitability. Not only that, but by doing more business with existing customers, you amass a larger and larger data set — data you can leverage to constantly refine product creation, delivery and marketing on an ongoing basis.

While expectations of “Loyalty” have evolved, the basic underpinnings are timeless. People like to be welcomed when they visit, treated like they matter and rewarded when they spend. The “How” is up to you (but even that’s kind of up to them too — whether they know it or not).


Patrick Reynolds is CMO for SessionM, the leading customer engagement platform. SessionM empowers the world’s most innovative brands to forge stronger and more profitable customer relationships. The platform scales for the enterprise, globally. Prior to SessionM, Reynolds ran marketing and strategy for two successful startups in the streaming audio industry. He also has client-side experience as CMO of a publicly traded retailer as well as multiple leadership positions with leading international advertising agencies.

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