According to a study by Forrester, ‘89% of US online adults surveyed belong to at least one loyalty program – and when done well, loyalty programs deliver a positive ROI.’
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Today’s customers are likely to keep going back to organisations that offer a positive experience throughout the buying journey, and personalised engagement strategies and rewards programs help drive customer loyalty.
However, loyalty requires more than just a shiny new rewards program. Although organisations across industries are investing in rewards, it takes a strategic approach to obtain loyalty that lasts.
Creating a program that provides an obvious value to customers based on their buying behaviours can bring positive results. For instance, according to Forrester, ‘Nike credits 50% of its quarterly digital growth to Nike Plus members’.
This incredibly competitive market pushes B2C pros to strategise new approaches that reach customers’ emotions and target specific buying behaviours, going beyond just rewards.
Organisations are embracing rewards programs, but it takes more than just a solid program to maintain customer loyalty.
Where Rewards Programs are Going Wrong
Rewards programs create positive customer buying experiences, but they cannot stand alone and must be timed correctly. As these programs are reaching out to a saturated market, your organisation’s strategies should include more than just a great offer – customers want personalised programs that are more than just a poorly timed discount in their inbox. For this, you need to know your brand’s “customer journey”, in detail, you need to know in which moments you can push actions that match the context of your customer; context is everything.
Most organisations aren’t paying close enough attention to customer emotion. This poses an issue, as emotion drives behaviour and can lead to customer retention. When a customer feels valued, they will place value back into the company, in turn becoming loyal to a brand.
The data collected by organisations is not being properly utilised, either. Though behaviours are being tracked diligently and there is a surplus of customer data gathered, organisations are having a hard time using it to create personalised offers.
In Forrester’s words, your organisation should ‘use the program to deliver the best of what your brand has to offer and to make your best customers feel heard, valued and understood wherever they choose to interact’.
‘They can do so by defining the value of their CRM and introducing strategic initiatives as well as precise execution and optimisation techniques.’
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A Strategic Approach to Generating Loyalty
Customer loyalty isn’t going to be an instant consequence of a rewards program. Developing a solid understanding of customer wants and needs will allow B2C marketing pros to create valuable offers.
Insights from truly understanding your customers are powerful. The customer data collected should be applied to all areas within your organisation, creating a personalised, positive approach that anticipates issues and creates a seamless journey from start to finish.
Implementing a framework to measure loyalty will make the difference in your program’s lasting effects. According to Forrester, ‘31 of the top 50 Fortune 100 companies mention loyalty in their 2019 10Ks/annual reports but don’t offer any evidence of actually tracking it’. Tracking and analysing your customer loyalty data will help you build a stronger program that leverages behaviour and emotion.
A Four-Phase Transformation
Updating your company’s loyalty program or creating one from scratch can be done efficiently with a four-phase approach.
Obtaining customer loyalty requires your organisation to place value on relationships, personalise offers in an oversaturated market, track customer behaviour and use emotion as a driving factor.
In phase one, your organisation will watch today’s changing loyalty landscape and begin to strategise based on customer emotion and behaviour. You will also build an ROI model that allows for continuous improvement.
The second phase pushes your organisation to analyse its strategic strengths and weaknesses. Focus areas include technology, loyalty measurement and strategy. Once identified, your strategic approach can be modified to best suit your needs.
In phase three, you will put your strategy into motion. We at redk can help your organisation implement the proper tools and technology to collect and track data for efficiency.
And in the final phase, your organisation will reevaluate its strategy, optimising the techniques that have positive outcomes and eliminating those that just aren’t working.
You don’t have to transform your loyalty program alone – we are here to help. With over 15 years of experience in consulting, we are ready to guide you to the best possible program to build customer relationships with retention. Reach out to us today.
CRM Transformation Practice at redk
Hideki applies over 15 years of experience in the field of CRM and Customer Experience to overcome business challenges in the customer cycle.