4 Best Loyalty Tactics to Build Emotional Connections with Customers

Loyalty program membership may be up, but “Consumers’ overall engagement in traditional customer loyalty programs has declined consistently over the past four years,” according to Retail TouchPoints. This is largely due to the fact that the traditional loyalty tactics that most companies are still relying on merely encourage transactional behaviors, which generally doesn’t help brands move the bottom line in the right direction.

The most successful loyalty programs are designed to deeply connect with customers and drive long-term, repeat business, which boils down to the experience they provide. In this blog post, we’re taking a look at four of the best loyalty strategies for brands to employ to build long-lasting emotional connections with customers and increase revenue and lifetime value. Let’s dive right in.

Infuse Mobile

In a survey of over 8,000 quick service and fast casual restaurant diners, those that were members of at least one loyalty program (70%) identified free menu items, the ability to track rewards/points, and personalized rewards as the top three program features. These are all features that are easiest to be deployed via mobile. If you’re trying to make customers like your brand (and be more loyal), you have to cater the experience to their behavior. And consumers are behaving on mobile, so you should be too.

With their mobile order feature, Starbucks already has your most frequent order queued up in the app, and by connecting your Starbucks card to the app as well, all you have to do is click a button and voila–your drink will be waiting at the nearest Starbucks location in a matter of minutes. My Starbucks Rewards members earn 2 Stars for every $1 they spend using the Starbucks® App. Accumulated stars result in Star Rewards that can be redeemed for free food and drinks. Starbucks makes a daily ritual just a little bit more convenient with rewards, elements that together serve to not only improve customers’ lives, but also build loyalty.

Multiple Benefits

Consumers, even those with an affinity for the same brand, are motivated by different incentives. Some want exclusive experiences; others prefer gifts; and some want free shipping or discounts. Offering a variety of options for consumers to earn and redeem points not only increases redemption, but also creates a better brand experience with a wider audience. As an example, Sephora’s Beauty Insiders program provides shoppers with a wide variety of ways to redeem their rewards.

Sephora has also created the Rewards Bazaar, an online portal to which new rewards are added every Tuesday and Thursday. Beauty Insiders can use their points to redeem one-of-a-kind experiences, personalized services, and coveted sample rewards. Sephora offers good old-fashioned samples with purchase or a free birthday gift, as well as incredible, over-the-top experiences, like having famed makeup artist Kevyn Aucoin fly a customer and her friend to New York for a behind the scenes look at an exclusive New York Fashion Week Event, plus hotel accommodations and a gift bag full of products from the brand. The point is (no pun intended!) you can only get these gifts and perks, small or large, if you’re a Beauty Insider.

Gamification and Social Integration

Most loyalty programs reward their customers only for the amount of money they spend, which makes sense, but lacks originality. Brands need originality and creativity to stand out from the competition. In order to encourage more than just transactional behavior, brands must create additional opportunities for consumers to earn rewards, while maintaining focus and alignment on their business goals. Taco Bell has incorporated gamification and social integration into their loyalty strategy with great success.

With Taco Bell’s Explore game, which is part of their mobile app, users are rewarded not only for their patronage, but also for sharing what they’ve dubbed as “Live Mas” experiences on Facebook, Twitter, and Instagram. Many of these experiences are unrelated to Taco Bell. Users can unlock puzzle pieces when they share photos on social channels or order using the app. Consumers get a free Freeze drink if they complete the first puzzle. If they complete additional puzzles, users are eligible to receive rewards like a $100 gift card, a reserved booth at a Taco Bell restaurant, or a trip to Taco Bell’s California headquarters.

When it comes to the effectiveness of loyalty programs that incorporate gamification or social sharing, the proof is in the numbers. As a report by Colloquy revealed, “Programs that reward for Instagram follows have an average redemption rate that is 7.76% higher than the average across all stores. The redemption rate for programs that reward for a Facebook like are 12.26% higher, and programs that reward for a Twitter follow are 16.39% higher.”

build-emotional-connections-with-customers.jpgAdvocacy

Loyalty programs are not just for brands selling lower cost items; they’re also an effective way to drive more revenue from customers of high consideration products. Take Harley Davidson for example. People aren’t exactly going out and buying motorcycles everyday, or even multiple times a year, but the brand has a die-hard customer base. Harley Davidson harnesses the power of their devotees to spread the good word through their Harley Owners Group (H.O.G). This program is focused on encouraging advocacy and building a community, which results in higher lifetime value. Don’t take our word for it though: H.O.G members typically spend 30% more than other Harley owners (Clifton, Rita; Simmons, John; Ahmad, Sameena (2004), Brands and branding; The economist series (2nd ed.), Bloomberg Press).

H.O.G. is all about deepening the emotional connection Harley customers have to the brand. This type of program would not work for every company, as having a strong brand is a prerequisite for success. However, a program like H.O.G. is also difficult to replicate because of how focused it is on the the needs and desires of Harley evangelists. Whether your brand sells frequently purchased items or high consideration goods, your loyalty program should be designed around your customers’ lifestyle and your brand’s specific business goals.

Traditional loyalty tactics simply won’t do anymore. Consumers have become much too savvy for them. In order to drive the type of loyalty that’s going to move the needle on key loyalty metrics such as number of members, percentage of sales from loyalty program members versus non-members, average lifetime value of loyalty program members versus non-members, and other crucial goals, brands need to focus on building long-term, emotional connections with consumers. The four real-life loyalty programs discussed in this blog post are some of the most effective tactics modern marketers can employ to foster lasting, profitable relationships. We hope they inspire and enlighten you of all the possibilities in store to transform your brand’s approach to loyalty this year.

 

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