Programs

Unconventional Loyalty Programs Meet Consumer Needs, Marketing & Advertising News, ET BrandEquity

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Brand loyalty is driven by more than loyalty program rewards. To keep customers engaged with a loyalty program, rational and emotional benefits are needed. Consumers continue to expect personalized, personalized and channel-appropriate experiences throughout the journey. Consumers are open to relationships with brands through loyalty programs and other means. This provides brands with significant opportunities to build customer loyalty and drive business impact.

Ogilvy Experience and Sitecore set out to survey consumers around the world to better understand their current loyalty needs and expectations. The survey was conducted in 13 countries, including India, in the native language of each country, to brand-engaged consumers (BECs).

Most consumers are open to listening to brands. Those who have given brands explicit permission to communicate with them through a program or outside of a program, help influence their hearts and minds.

Michelle Wildenauer, Senior Vice President, Strategic Services, The Lacek Group, said, “Value definitely matters to consumers. But that’s not the only thing. We asked what makes you loyal to a brand? This question therefore did not concern loyalty programs. It was just a matter of loyalty to our brand. And in the responses we got, it was almost a mixture of rational motivations and emotional motivations.

“Rational motivations were high-quality products, discounts, discounts and promotional offers, some of the value-related elements. But there are many more emotional elements like their loyalty program, customer service provided by a brand, knowing that privacy is protected, understanding and aligning with brand values.

The survey found that sixty-six percent of respondents have signed up for a brand loyalty program, providing those brands with a rich source of insights based on digital engagement and transactional data. This information is critical to maintaining brand engagement and increasing customer value.

Eighty-one percent of respondents opted for communications. Consumers in the United Arab Emirates, New Zealand, Hong Kong and Australia are more likely to be members of a loyalty program, while those in Brazil, Spain, India and Indonesia are more likely to opt for communications.

The study revealed that consumers expect more from brands: they want personalized, immersive and connected experiences.

Address me as an individual

Personalized communications and experiences are essential. What was once a way to differentiate a brand is now table stakes. Moving from segmented interactions to individualized interactions is necessary to meet the expectations of today’s consumers.

Make it relevant

When consumers provide personal information and preferences, they expect relevant interactions in return. In other words, if I share my information with your brand, your brand will do better than be worth it.

Share my values

Fifty percent of respondents indicate that the importance of brand values ​​has increased over the past few years when it comes to joining or staying engaged in brand loyalty programs. This is important: a brand does not want to ignore half of its audience or its members.

Recognize me along the journey

Consumers want to be recognized and treated as loyal customers through brand interactions.

Brands need to consider known and unknown consumer behaviors, mindsets, journeys of engagement, and needs to drive brand loyalty.

Brand loyalty is driven by more than programs

Understanding what makes consumers feel more loyal should inform how you influence them to act more loyally. While rational reasons (eg, offers, perks, and rewards) are still essential, an increasing number of emotional factors are showing significant importance.

Brand engagement is key to avoiding churn

Loyalty programs can build brand trust, but one misstep in the customer experience can profoundly erode the consumer-brand relationship. 44% of respondents stopped using a loyalty program because of a single bad experience.

And that percentage increases with members of Generations Y and Z. Loyalty is more important than a program: it extends to the entire customer experience.

Loyalty programs must evolve to meet all consumer needs. The old approach of relying on regular communications, discounts and a points-based currency is not sustainable.

A new approach, strengthening emotional loyalty and personal relationships, is what is needed. Eight out of ten consumers surveyed indicate that emotional benefits help maintain engagement in a loyalty program.

It’s not about one type of advantage over the other. It is a balanced approach that appeals to a wide range of generational and regional segments.

An engagement approach that addresses both rational and emotional motivations helps programs evolve to deliver richer experiences and targeted value to customers.

Most consumers are motivated by paid loyalty offers

What will customers pay? 91% of respondents say they’re willing to pay to get what they want, whether it’s free shipping or surprise extras. For new programs, paid loyalty is a smart consideration. For existing programs, paid loyalty is often a layered strategy aimed specifically at revenue generation.

97% of respondents indicate that at least one type of digital interaction with a loyalty program is important for member engagement; 73% call it critical.

Wildenauer also talked about Metaverse and how customer engagement will be key in this space.

“A really interesting approach to interacting with customers who are in the Metaverse. We’re probably not going to drive a lot of customers to the Metaverse, but those who are there, it’s an opportunity to engage them with the brand and in a very fun way.

The survey also revealed that customer service is of vital importance to consumers. While digital customer service is effective, connecting the consumer to a real person who understands their needs can create an exceptional experience. Imagine having an interaction with a brand that doesn’t recognize your loyalty or issue. Clearly, individual experiences are imperative at every touchpoint.

People live across multiple digital channels: they’re on a brand’s site, app, social sites, and so on. Nearly a quarter of respondents identified four to six types of digital channels as critically important to member engagement. As more and more options emerge on social and messaging apps (e.g. WeChat, WhatsApp), a brand needs to effectively expand its loyalty ecosystem. Data and technology can connect and power personalized and scalable customers
experiences from acquisition to activation to brand promotion.

A brand’s retention strategy and single customer view must work in tandem to achieve customer lifetime value. Customer data is the fuel for continuous analysis and measurement of the value proposition and impact on business goals.

Brand experiences live beyond the individual customer. It is certain that a good or a bad brand experience can impact the perception of a BEC. But such an experience is not limited to a single consumer.

Previously, a customer could tell a few friends or family members about good or bad brand experiences. Today’s empowered consumer can exponentially influence brand impressions by reaching out to their social media followers. This can mean a few dozen people or tens of thousands. Positive experiences are more likely to be shared, but even neutral or negative experiences show up in the social sphere. Knowing this, brands need to think about not only how they deliver great brand experiences, but also how to help consumers tell the brand story. Respondents in India and South Africa are particularly vocal on their channels.

Brands need to develop creative loyalty strategies based on customer data to be successful. They must implement retention strategies at all phases of the customer journey, from acquisition to activation to brand promotion.

Currently, loyalty extends far beyond points and miles. It’s more than a loyalty program and requires more than a marketing team. It’s not just about exchanging monetary value, x for y, with a customer. If this were true, loyalty programs would only exist for brands’ current, or even best, customers. In fact, data improves brand interactions, and therefore loyalty, throughout the customer journey for all consumers. Thus, loyalty today presents vast opportunities for
brands.

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