When was the last time you actually felt rewarded by a retail loyalty program? When was the last time you received an email full of coupons or sales that didn’t just feel like a desperate cry for attention?
For years, retailers have shaped customer loyalty programs around punch cards and discounts. While these lightweight programs are often enough to inspire a return visit, they do very little to make a better customer experience (CX). When a sale is the only meaningful way for a customer to interact with their favorite brand, retailers make it very clear that customer loyalty is a one-way street.
That approach simply doesn’t cut it anymore. Consumers have broad choices, and these false attempts at loyalty relationships simply don’t deliver the community of passionate followers every brand envisions. Many retail companies have realized that CX is a critical part of building a loyal community of fans, but fail to consider the entirety of that experience. Memorable customer experiences go beyond the checkout counter and displays throughout the store — it’s an end-to-end strategy that carries through every step of the consumer lifecycle.
Missing The Loyalty Mark
Unfortunately, many retailers have moved beyond the punch card to embrace large-scale, off-the-shelf loyalty programs. While it’s a good idea in theory, investing in these platforms rarely pays off.
Expensive loyalty programs are built on the right idea, but for the wrong reasons. Plenti, the cross-brand loyalty platform, seemed like the perfect solution when it launched last year. It tied loyalty to some of my favorite brands together with some of my most common payment methods, and it gave me an interesting reward structure to choose from.
A year later, it’s hard to see how Plenti is a success. And there’s a great reason for that: it wasn’t purposefully custom-built by my favorite brand to actually reward me for my patronage. While it’s nice to rack up points, it still requires consumer spending as the only transactional way for a customer to prove their loyalty.
These platforms fail consumers because they exist outside the brand relationship, creating yet another layer between retailers and their customers. It does nothing to improve the actual service customers receive, which is aleading reason why customers will abandon a business.
Why? Because loyalty is more than spending. Loyalty is about advocacy. It’s about being excited about the brand even when they’re not wearing it, eating it or using it. There’s no pre-built loyalty program in the world that will turn a customer into a loyal advocate. Consumers are loyal to brands that return their love in tangible ways. That doesn’t mean you have to ditch the discounts or sales emails, but they should be elements of a custom loyalty strategy that is laser-focused on keeping customers happy, rather than just getting new customers in the door.
Building A Loyalty Bridge
Rather than a turnkey loyalty program, brands need to develop custom and strategic platforms that bridge gaps between the rest of their customer acquisition channels and retention initiatives. Done right, a loyalty program is a powerful owned-media channel that can support social media, email marketing and in-store sales.
Unfortunately, most brands focus heavily on revenue growth to the detriment of customer retention efforts.
Brands focus on acquisition because it’s easy to track, whereas quantifying retention revenue requires hard data like customer churn and lifetime value. An effective digital loyalty program can increase retention, while providing the data to target smarter acquisition efforts.
Reach Customers When They Need You Most
Inspiring true brand loyalty requires a different mindset. Rather than forcing people to collect points or search frantically for discount codes, we can build experiences that deliver loyalty experiences when customers want them most. Brands need to focus on delivering tailored customer experiences through engaging content, meaningful support and tech-driven, in-store interactions.
Digital gives brands invaluable insight and inroads to customers. Unfortunately, most brands use the mountains of consumer data they collect to stalk customers with ads, coupons or uninspired sales — none of which give your customers any reason to remain loyal. And customers continue to turn their backs on that model — only 47% of consumers are still willing to trade personal information for a deal, and that will only decrease.
Loyalty efforts should be built like any other marketing platform; they’re built best with your whole digital ecosystem in mind, guided by your customers. With the broad options provided by the digital marketplace, the balance of power has shifted to the consumer. An effective loyalty program must embody brand values and deliver actual value to your customers on a consistent basis.
Once you start to consider the full consumer lifecycle with your business, and decide to build an actual relationship with your consumers built on value (not revenue), you can develop a loyalty marketing strategy that no punch card will ever match.
Geoff Wilson is the president and founder of 352 Inc. and an evangelist for his Barely Manage to Lead philosophy, using agile teams to drive iterative growth. 352 is a digital product development agency specializing in product strategy, user experience design, custom web development and digital marketing. 352 turns ideas into successful digital products for companies like Cox Automotive, Microsoft and YouCaring.