Are your loyalty programs falling short of their objectives?
Maybe it’s because they’re like the handful of programs you yourself belong to. And like the vast majority of consumers, you have no idea how many points you have, how you earned them and what benefits they bring. The sole connection between you and those brands is a long-forgotten customer number and often impersonal communications. It’s not exactly engaging.
And that is precisely what loyalty programs lack—engagement plans. Engagement strategies are the best way to generate excitement, inspire interaction, build loyalty and, of course, encourage consumers to buy. So, how can you create genuinely attractive programs? How can you ensure they will build lasting relationships between your brand and your customers?
Three questions to ask yourself right now
To get more people to engage with your brand, you need to create the right conditions. Before launching a loyalty program, consider the value proposition of your brand. What community of interest does it share with your clients? What promises do your products and services communicate? What story are they telling? Without such an approach, you can’t expect to foster true engagement among your clients. And if their emotional bond with you is weak, they won’t think twice about going to one of your competitors for a better offer. The idea is to go beyond your traditional objectives and offer consumers a world they can relate to.
To achieve this, you must first identify their needs, what attracts them, what retains them as customers, what helps them and what saves them time. But it also involves investing resources and making significant efforts before even thinking about your own returns. Your actions must create experiences and emotions that consumers can only experience with you and your products. It’s vital that they naturally associate these emotions with your brand and come to you for these experiences. It’s also about creating a desire to sustain this relationship and the emotions they feel from it. This translates into communicating about your brand and its services and innovations by posting articles on social media and, optimally, by motivating people in their community and through their online presence.
For example, French fashion label Kaporal chose to position its brand according to climate action and social initiatives. Through its “Kaporal Buys and Recycles your Jeans” campaign, potential customers receive a €20 voucher in exchange for bringing in old jeans. The voucher can then be used to buy a new pair from the brand. Old jeans are then recycled by 13 A’tipik, an economic inclusion workshop, into limited-edition fashion accessories sold in Kaporal stores. You can imagine what kind of impact this initiative has on customers whose values align with it.
This approach is about more than the promotions you offer your clients. By giving them something extra, they’ll be more likely to engage with your brand. They’ll give you deeper insight into who they are by interacting with your services or even communicating your image to other potential customers. Your brand positioning is, therefore, a key foundation for customer engagement.
So, just how far should you go with your loyalty program? What kind of compensation will be most likely to ensure customer retention and engagement? For instance, if you were a travel agency, it wouldn’t necessarily make sense to gift gold member clients a free trip. Thus, depending on your business and value proposition, you’ll be able to generate a range of engagement opportunities for customers and update your loyalty program regularly (see below, “You’ve got the data… So what now?”). Your levers will be different if your brand is in the retail sector, where purchasing issues are always challenging. On the other hand, banks and gyms need to implement anti-churn programs and measure satisfaction levels if they want to retain customers who already “subscribe” to their services.
This leads to the third question: what true purpose should your loyalty program serve? Do you want customers to sign up for an extra month or return to your brand once more than the average consumer? Once again, depending on your business model, you’ll aim to boost site visits and thus increase revenue. Or maybe you’ll be working towards longer subscription periods or increased customer lifetime value.
Once you’ve addressed these three issues, your loyalty program will have every chance of being successful. But you’ll still need to maintain it and keep it up-to-date!
You’ve got the data… So what now?
Building an engaging customer relationship means knowing your customers well. That means obtaining a range of data about them, which you can analyze to get the maximum of actionable customer insights. But it doesn’t stop there. Data collection and analysis must be done continuously. Suppose you only aim for the maximum amount of data you can get at the start of the customer relationship, and you fail to update it after. In that case, you will inevitably doom your loyalty program to failure. For instance, if you based your insight on a single consultation of your database, your client might eternally remain a single thirty-something renter with no change in income. As a result, they would eventually receive irrelevant communications and offers.
On the other hand, with a large volume of data—above all, relevant and fresh information—you could understand each behavior analyzed. This would allow you to respond in a relevant way and create a profitable interaction. Collecting data is obviously essential. But the key to engaging customers lies in how you maintain your loyalty program.
This maintenance involves short-lived, key moments via five different axes:
1. The transaction:
No loyalty program would ever neglect this opportunity to reward a customer who has just bought their products or services. But technically speaking, this is the one time you don’t have to build loyalty—they’ve just shown their commitment to your brand! That said, the majority of programs only reward customers when they purchase something.
2. Customer insight:
reward customers every single time they give you information about themselves. Don’t miss out on the incredible opportunity they give you when they tell you who they are. They’re providing you with valuable data. If you reward them in turn, they’ll be more likely to share insight with you again and more often.
3. The frequency of your customers’ interactions with your brand
Whatever form it takes—transactional or emotional—must be rewarded by your loyalty program.
4. Co-marketing with your brand:
This is when your customers post about your services on your site or their blog, when they refer new customers, test your products on social media or share photos of themselves with your brand. Their enthusiasm for the program and spontaneous desire to spend time promoting it demonstrate a close relationship and solid commitment to your brand. In turn, you must show that you value each interaction. You also need to pay special attention to them and reinforce their commitment through meaningful interactions of your own, such as new product previews, invitations to events or other extras.
5. Show them the depth of your product range:
Another way to build customer loyalty is to introduce them to your other products and services that they may not be aware of. In addition to boosting your revenue, this approach will strengthen customer loyalty by meeting their need for change and discovery while offering them the chance to stay in a universe that speaks to them and from which they can obtain new sources of satisfaction. French footwear and textile company Aigle is a great example of this approach. In 1989, the brand began diversifying its offer, initially with a mono-product strategy—its famous rain boots—and moving towards a single strategy aimed at outdoor activities. Today, the company derives most of its revenue from its clothing, having maintained the perception that its customers have of the authenticity and quality of its products.
Ultimately, you must determine what you need to offer customers to encourage their loyalty. If they can relate to your brand story and values—along with the interactions and emotions that they only experience with your brand—then you have the essential means to forge a unique relationship that will set you apart and keep them engaged in the long term.
Want to learn more ?