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In Age Of Amazon, Your Brand Needs New Loyalty Program Now

In the past, running a brand loyalty program was simple. Any business could offer a reward, in the form of a discount on a product or service. 

While 71% of consumers want discounts in exchange for loyalty, they also demonstrate a significant willingness to accept higher prices: almost 40% OF consumers are willing to spend more on a product for brands they are loyal to — even if presented with a lower-cost alternative.

Amazon Raised The Bar 

While repeat customers remain the end goal for all brands, in this age of availability, brands can no longer settle for the classic loyalty program because Amazon Prime has raised the bar. According to Citigroup, over 100 million shoppers are subscribed to Amazon Prime, and that subscriber count is expected to double in ten years. Brand marketers need to move fast to create a loyalty experience and scale in the age of Amazon. 

Winning a head-to-head against Amazon Prime requires rethinking how customer relationships form and are maintained.

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Three New Types Of Brand Loyalty

Who are your top customers? Do they simply purchase often, or spend the most? How do you value a customer who follows or engages with you on social media? 

How about customers who refer your company to friends — or leave reviews, or share photos and videos of them and their friends with your product?

These questions expand your brand engagement beyond the initial purchase. Past experience is core to building a fundamental trust in a brand’s value. Brands can now approach fostering customer loyalty in these ways:

  • Transactional: The traditional rewards model, starting with deals and discounts. Spend $100 and get $20 off your next purchase.
  • Functional: Built on generating consumer habits and satisfying their need for convenience, this is the first pillar in building a personalized service. Share a brand’s product on social and redeem points towards a purchase.
  • Emotional: A deeper relationship based on the brand’s identity matching consumers’ set of lifestyle values and choices; price doesn’t factor into it. Even convenience can be discarded when the bond between consumer and company are deeply linked, like the relationship of Apple or Nike fans.

Rising Customer Acquisition Costs Elevate Loyalty Stakes for D2C Brands

As costs for direct customer acquisition go up, loyalty programs must tie purchases from repeat customers to a transactional, functional and/or emotional approach. 

The latest advances in customer loyalty programs are indicative of trends impacting the current retail environment. As retail stalwarts from Sears to Toys ‘R' Us falter, direct-to-consumer (DTC) brands turn to experiences like pop-up shops and niche-oriented outlets. These new physical stores are designed to entertain and emphasize product clarity, visual dynamics and interactivity that play well on social media.

Established brands and retailers are trying to follow the lead built by Amazon and niche DTC brands like Thirdlove, MVMT and Unuckit. Successful and innovative ecommerce startups are rapidly migrating their brands to physical extensions, whether temporary or permanent stores, showing that engaging your customers directly is one of the most important factors in building a loyal customer base. 

Buoyed by the right loyalty strategy, customers form long lines at showroom openings or sell out an exclusive online product offering, creating a cult-like following. Building a reward and referral strategy can be crucial to maintain customer relationships and generate sales.

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