In fact, all too many companies pay little more than lip-service to loyalty - running outdated, unimaginative programs that fall far short of surprising and delighting their customers. So, how do you best address loyalty, how best can you improve returns and reduce churn, how do you identify winning use-cases?
A good starting point in answering those questions is defining what loyalty is. We’d propose this working definition: “Loyalty is when customers choose a particular brand more often than competitors’, based on their belief that the chosen brand will be a better choice both rationally and emotionally.”
If we accept this then we can see that loyalty has two aspects:
1. Behavioural: This is reflected when customers stick with a brand; buying more of it than they do of competitors’ products.
2. Attitudinal: This is reflected in the more abstract reasons why a customer might prefer one brand to its competitor’s offering.
So, if we’re looking to identify the components of an effective loyalty program, then the key question is “what drives behaviour and positive attitude towards a brand?”
The correct answer, beyond the transactional, might be that loyalty is founded on something that’s hard to measure (which, perhaps, is also why a detailed definition is less straightforward than it appears). We believe that loyalty can only be truly developed as an effective strategy if the basis of an offer (driven by price & service) is consistent in its appeal but we would also suggest that, instead of creating an entire marketing strategy around what prices and services you want the customer to prioritize, you would do better to prioritize instead a strategy driven by how we want the customer to feel. In short, emotions and returns are not mutually exclusive.
Separating what we’ll call our humanity from your immediate marketing goals is important because real, lasting brand satisfaction is achieved through the application of different strategic parts, not just the obvious ones. And in our years of experience as loyalty marketing experts, emotion lies at the heart of true loyalty more than anything else. Emotion is the glue that binds together all the other elements (service, price, trust, reliability, empathy, rewards etc.) that contribute to satisfaction and creates a compelling, desirable offer.
In simple terms, what really counts is how we make customers feel about the component parts of the offer we’re presenting them with, how we wrap and position everything and how/when/why we communicate our offer and brand. These are the steps that will really define the kind or relationship and associated emotions we try to build to represent our brand. Accept this as true, and we believe it is, then only brands that build more positive emotional relationships with their consumers will enjoy a higher rate of long-term profitable revenue growth.