Seven Key Indicators Of A Loyalty Program That Truly Drives Devotion

  • Written by  Phil Seward, ICLP

0aaPhil Seward ICLPRetailers are regularly revamping, enhancing and merging their loyalty and rewards programs to create devoted customers — as in, the most desirable relationship, characterized by intimacy, passion and commitment to a brand. For instance, Hilton recently announced new benefits for its Hilton Honors members, including the ability to pool points with friends and family, and to use acquired points to purchase items on Amazon. Earlier this winter, Sears decided to double down on its loyalty program by offering credit from in-store purchases during a one-day event prior to the holidays.

These are just a handful of examples that demonstrate how brands must remain malleable to accommodate the evolving market, which reflects a desire for convenience, consolidation of programs and a personalized retail experience.

The more satisfied customers are, the more loyal and ideally, devoted, they’ll become. Devotion, which is a factor of how passionate, committed and intimate consumers feel towards a brand, is key to creating effective retail loyalty strategies that generate valuable and long-lasting relationships. Devoted customers are the most willing to disclose personal information, desires and opinions with brands, and are the least likely to stray to competitors. ICLP’s recent research proves just how powerful devotion is as a business driver, showing that 96% of the 1,000 U.S. consumers surveyed who feel devoted to their favorite retailers would recommend the brand to others. This highlights the value of word-of-mouth advocacy that can be achieved through loyal customers.

However, the research also reveals that just 14% of U.S. consumers exhibit this idealistic sentiment of devotion towards their favorite brands, leaving 86% inclined to “cheat” on their preferred retailers, getting distracted by and potentially even shopping at competitor stores. The question becomes: how can loyalty programs be effectively created and optimized to achieve and maintain that all-powerful level of devotion? In order to answer this question, retailers must identify the key indicators of a successful loyalty strategy, and continually evaluate the strength of its own initiatives against them.

Key Indicator 1: Employees Understand Its Value

Employees must embrace their business’ loyalty strategy and fully understand how it drives devotion. The corporate office must be transparent with customer facing-staff on why these beneficial initiatives are implemented, and how the employee’s role in executing the program impacts the overall brand experience for customers. Staff must understand that the resources, technology and customer information they are provided with is also there to help them succeed in their roles.

Key Indicator 2: Customers Know The Program Exists And Understand How It Benefits Them

Your current customers, and those being targeted through acquisition efforts, must be familiar with your program’s benefits when making or considering making a purchase. ICLP’s research shows that communication is crucial for building a loyal customer base, with 53% of respondents saying that they would purchase and engage more if brands communicated with them better. Similarly, perks need to be kept in check and should never become too difficult to comprehend or use. Participants must easily understand how they can unlock benefits and should be able to redeem rewards seamlessly whether they choose to shop in store, online or via mobile.

Key Indicator 3: Participants Experience Perks From The Start

Offered rewards should be attainable from day one, regardless of whether participants have made a purchase. The most common member complaint is that it takes too long to rack up points or notice any meaningful benefit, so it’s important to ensure that loyalty is inspired and rewarded from the beginning of the relationship. The value of positive interactions beyond transactions, such as event participation and social media engagement, among others, should never be underestimated.

Key Indicator 4: Your Perks Are New, Exciting And Useful

The customer experience must include exciting one-of-a-kind perks that participants don’t expect or receive elsewhere. Devoted customers must feel they’re actually receiving benefits tailored to their needs — as 59% of U.S. consumers reported they would buy more if a retailer took the time to understand their individual requirements. The key ingredient here is creativity. Start by considering what other types of programs your core customers are involved in and consider what kind of supplemental experience you can bring to the table.

Key Indicator 5: You’re Seeing Familiar Faces

Repeat purchase is paramount. One of your main objectives should be to ensure customers choose your brand time and time again instead of going to your competitors, which is more easily accomplished if they feel a sense of loyalty. If you’re seeing familiar faces, you’ve established trust and respect with your customers, which are both essential aspects for driving commitment — a key component in a devoted relationship.

Key Indicator 6: Data Is Used In-Store, Online And Via Mobile To Personalize Devotion

Customer data must be used to enhance customer devotion. In an age where every retailer’s digital presence is growing exponentially, data is vital to personalizing the brand experience. You should be using customer purchase history, delivery preferences, interests and demographics as guidelines to pinpoint the types of perks likely to excite your audience. Mobile is an excellent channel for data-driven targeting, considering the vast volume of information that can be yielded from retail apps, location tracking, entertainment preferences and social media networks. Don’t forget mobile rewards apps are also used amongst Gen Xers and Baby Boomers, despite common assumptions they’re solely used by Millennials, so be sure that your strategy has holistic appeal.

Key Indicator 7: You’ve Given Success A Definition

Finally, ensure that you’re defining progress by setting realistic goals and robust success metrics across all areas of the business. While devoted relationships are the ultimate goal, remember that any level of loyalty is a positive thing, and lesser-committed relationships still need to be maintained and where possible, improved. Goals need to pose challenges, yet still be attainable and measured systematically to evaluate growth over time. Transactions are critical, but additional metrics should be factored, including sign-ups, returning customers, social media engagement, referrals and event participation.

Just like in their human relationships, people can fall in and out of love with brands, and it is a difficult task to not just acquire — but maintain — devoted customers. As a result, in today’s market where purchasing options are spread across in-store, online and mobile storefronts, it’s vital that your loyalty programs are readily present across all the channels your members are using. Equally important is that the strategies you are implementing are supported by data that accurately tells you what people want and need. In today’s challenging and increasingly modernized retail landscape, loyalty and rewards must always be considered integral parts of a company’s overall customer engagement strategy.

Phil Seward is the Regional Director for the Americas at global loyalty agency, ICLP. Combining agency and client-side experience, he is responsible for driving devoted customer relationships for ICLP’s clients across the U.S. and Latin America.

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