Earning points for purchases and store visits is no longer what differentiates one loyalty program from another. Rather, the new norm is member engagement.
Goodbye transactional loyalty
When we talk about loyalty programs, many people still have in mind the famous loyalty card that allows you to accumulate points with every purchase or in-store visit. This so-called transactional loyalty has been at the heart of many loyalty programs for many years. However, the field of loyalty has evolved. Relying on monetary rewards (purchase discounts, bonus points and freebies) is no longer enough to build a close relationship with customers. In other words, the points card should no longer be the sole centerpiece of your loyalty program. Engagement initiatives are now the new norm.
A place for engagement and emotion
Working on the engagement of a loyalty program means both creating an emotional bond with its members and encouraging interaction with the program or brand.
“It’s not about what their loyalty demonstrates to us, but what we can deliver to our clients that creates the most meaningful and connected experience with our brands.1” – Allegra Stanley, Sephora’s vice president and general manager of loyalty PO
At Starbucks, for example, it’s no longer the “Get your 7th coffee for free” (transactional loyalty) that leads a customer to make a purchase. Instead, it’s:
- The personalized newsletter that knows the member’s roasting preferences
- A discount on his favorite pastry
- The ease of ordering, paying and earning loyalty points in a single operation
- His order prepared and paid for in advance
- Skip the line
- The chance to earn more points if he reaches the next level
- The cup he gets by surprise for his loyalty
- The possibility of making a donation to fair trade coffee producers
To achieve this, whether in B2C or B2B, it’s essential to know your members well. Customer data is essential for keeping abreast of your customers’ needs and interests. Surveys are also useful to deepen your analysis or to check your members’ interest in new products.
Here are some things to think about first:
- What features can make life easier for your customers?
- How can your loyalty program save them time?
- Which benefits add the most value for your members?
- Does your program reflect your members’ values? Are they well communicated in your various communications initiatives?
- Can your members do without the program easily?
There are many good engagement strategies and initiatives to enhance your loyalty program.
- Non-monetary rewards and benefits (exclusivities, VIP invitations, free or faster delivery, pre-sales, exclusive offers and content, etc.).
- Personalization
- Tiered rewards
- Surprises & delights
- Values aligned with your brand and those of your members
- Content strategy (webinars, white papers, videos, blogs, etc.)
- Social media
- Gamification activities
- Mobile application
The right combination of these engagement initiatives in your loyalty program will benefit both your brand and your business.
Tangible results
Beyond building long-term customer loyalty, engagement has a tangible impact on average basket value, brand awareness and word-of-mouth.
The results of a study by Capgemini2 clearly demonstrate this.
- 70% of emotionally engaged consumers say they spend up to twice as much or more on brands to which they are loyal
- 82% say they always buy from them when they need them
- 81% promote it to family and friends
- 62% defend these brands on social media
Not working on engagement could also mean missing out on a considerable income boost.
In short, points accumulation and discounts are no longer the only attractions of a loyalty program. In order for your program to remain current, effective, and efficient, it is essential to create and maintain customer engagement.
Is your loyalty program engaging? We can help you evaluate it.
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