Buy three coffees, get one free! 20% off on Tuesdays! Marketers too often rely on transactional offers alone, underestimating the value that loyalty programs can provide. While the transactional strategy can convert top-of-funnel sales near term, it doesn’t inspire long-term customer value and engagement.
Brands can elevate their loyalty efforts in three simple ways:
Offer active, not passive, brand experiences. To highlight how marketers can guide customers actively, let’s pretend we’re operating a boutique fitness company. Instead of an app to book classes more easily, the brand could provide loyalty members with an enhanced omnichannel customer experience that directs them to supplemental services and products, such as smoothies, nutrition coaching, or merchandise.
However, it shouldn’t stop there. To create active loyalty programs, marketers should identify moments within their customers’ journeys to provide surprises or spontaneous moments of joy based on location, interests, and how frequently they make purchases. The fitness brand could also provide non-monetary perks like early class booking and cancellation forgiveness for loyalty members to deliver tremendous value to passionate customers. In fact, using hardcore customers as a “north star” for a loyalty program is an excellent tactic for attracting more people to join.
Incentivize and gamify. Badging is an effective method for gamifying the shopping experience and unlocks another opportunity for non-transactional benefits through incentivized offers. We see this happen a lot in the D2C space as challenger brands frequently offer exclusive access to premium products to customers based on the volume or value of their previous purchases. This tactic is how several challenger brands, particularly in streetwear, vaulted their brand recognition into the stratosphere and created rabid fanbases.
Brands can go a step further to create a badging system that gamifies the shopping experience and gives passionate customers a goal to strive towards. In our fitness example, the organization could offer exclusive merchandise for customers who have attended 100 classes. Again, this strategy has minimal costs, but generates brand loyalty and significant customer engagement.
Drive relevance through personalization. Personalization does not necessarily mean a targeted email marketing campaign, but rather, employing strategies based on true drivers of loyalty for a brand’s customers. Leveraging artificial intelligence and machine learning for ethical data-driven insights can provide a personalized customer experience—individualized webpages, offers and messaging—that resonate and drive continued engagement.
For example, a bank could offer a personalized dashboard where customers opt in to location-based services to receive tailored, relevant offers and experiences in real time from nearby merchants. Going a step further, cardholders could set personal saving goals as well as monitor and track their progress through gamified experiences.
The consumer has changed dramatically this past year. If loyalty programs are going to stay relevant, they need to change, too.