Achieving genuine and lasting customer loyalty is the foremost challenge facing digital marketers in 2014. True, it’s always been the challenge, but after the digital landgrab of recent years the stakes are higher than ever. New customers are great, but loyal customers are any company’s most valuable asset, delivering reliable, gradually increasing earnings over the long term.
In my previous post, I explained how digital marketers can derive more value from less data. Small data is the key to isolating the most relevant and meaningful information for your brand, and turning it into mystery-solving customer insights that rival Sherlock’s genius. In this post, I’ll help you translate those insights into practical steps to inspire and nurture lasting customer loyalty.
Here are three ways to create—or rethink—a loyalty program that benefits you and your audience.
1. Think outside the “Points”
Did you know that “Americans average about 22 loyalty program memberships per household”? I wonder how many are consistently used and loved, and how many end up crumpled and forgotten in a purse or pocket.
Loyalty programs need to go beyond “points” and find fresh ways to engage and incentivize members. I can turn to any airline to rack up frequent flier miles. If all my current airline offers is a miles-for-dollars exchange, what’s to stop me from switching to the next airline that offers me a better deal?
Retailers commonly offer members free shipping, in-store discounts, and rewards points. To differentiate, deliver experiences and services that speak to what’s distinctive about your brand and the lifestyle it promotes. For example, Nordstrom’s offers free alterations for Fashion Rewards members. And Philips launched websites that encourage men to “express themselves every day” to their online community.
Walgreens Balance Rewards puts individual health goals at the center of its loyalty program. Members earn points when they fill a prescription, get a flu shot, log their workouts, and track their weight. Earn enough points, and they get a Walgreens gift card to keep contributing to their health. Customers are rewarded for investing in themselves—something that’s rare to find in any brand interactions. Walgreens doesn’t try to quantify the benefits, making it easy for a competitor to out-do them. Instead, the benefits are tied to something priceless, and customers feel deeply valued.
2. Mobilize Your Loyalty Programs
Going mobile offers multiple advantages. Mobile sites, content, and apps give you more points of contact with customers, providing a more complete picture of their behavior. Brands can glean deeper customer insights from the additional behavior, purchase, and location data (providing they zero in on what matters). Mobile can open up opportunities to dialogue with customers and improve the timing of your communications. Mobile users will reward this kind of seamless, convenient, and open-ended relationship with their loyalty.
Despite all the advantages, “less than a third of loyalty marketers” surveyed by Forrester “are piloting or using tactics like mobile websites, native applications, and mobile messaging.” You can come up with amazing loyalty perks, but if they’re not accessible to your members when they want them—say, in-store when they’re comparing options or are ready to make a purchase—they’ll forget about your program altogether.
Examples of mobilizing your loyalty program include:
However you choose to mobilize, remember the reason you’re doing it: to boost the quality and convenience of customers’ interactions with your brand. You should be continually learning about your members and adapting to their preferences, which brings us to number three.
3. Put the Customer in Charge
Starbucks Mobile is a hugely popular loyalty app, letting users quickly locate stores and rack up free drinks. But loyal user Adam Nash recently wrote an open letter calling for some key improvements. The heart of his message? “I want you to know me.” Nash explained:
There are baristas at five different Starbucks who know the drink I normally order. The one in Los Altos actually knows the drink I usually order for my wife too. And yet, after over 1000 orders, you still don’t know my favorite drink?
To nurture loyalty, put the most important data to work—such as drink orders and payment preferences—to continually optimize the customer’s personal experience with your brand, whether online or in-person.
The prevalent attitude in digital marketing is that brands need to know exactly what the individual needs and recommend the perfect solution at the optimal time. This is a nice goal to strive for, but it simply isn’t practical on a mass scale. Instead of pretending you can make perfect predictions, let the users help you (and themselves). Let them set their own app and site preferences, select exactly which communications they want to receive, build a personal profile, and keep track of their history with you. Countless social media platforms have shown that people like to do this when the result is more relevant connections.
Get rid of annoying email updates, notifications, badges, and other noise that clutter members’ inboxes and homescreens. If you’re constantly in customers’ faces when they don’t need you, they’ll be annoyed and relegate you to the spam folder. If you’re always there when they need you, however, they’ll come calling again and again.
Build Loyalty from the Foundation Up
It costs more to attract and acquire new customers than to retain the regulars—that’s marketing 101. Yet many businesses continue to focus their energies on prospects, taking for granted that current customers will stick around. Take a fresh look at the data and let your customers’ behavior speak. Start by understanding what matters most to them, and why, and build a program that reinforces and builds upon that foundation.