11 Key Insights for Better Customer Loyalty Programs

11 Key Insights for Better Customer Loyalty Programs

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Two experts in the customer loyalty space, BigDoor’s Director of Marketing Ashley Tate and Maritz Motivation Solutions’ VP of Loyal Strategy Barry Kirk, shared 11 key insights into creating better and more engaging customer loyalty rewards programs with TechnologyAdvice’s Clark Buckner.

Tate and Kirk offered best-in-class ideas from four of the most successful brands in the loyalty space today: Starbucks, Southwest Airlines, Gilt, and Blood and Sand. Through these case studies, organizations can see what criteria may work best for their own customer loyalty program.

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Create a highly mobile-enhanced experience.

 


Contrary to what most brands do, where they focus more on the point of sale or their online presence while putting mobile in second place, Starbucks does the opposite. They focus on primarily designing a better mobile strategy than having a robust website. Purposefully, there’s little a user can do on Starbucks’ website because they want customers to download their mobile app and experience loyalty through that particular avenue.

 

Have a solid, clear program structure.

 


Backed by a well-conceived program structure, Starbucks has different partnerships and promotes them through events like movie premieres. Southwest Airlines has the well-known Rapid Rewards frequent flyer program, which is clearly structured so that members can easily track their status and progress toward their goals within the program.

 

Make it social.

Southwest Airlines offers a Companion Pass to its valued members where they get to assign a companion who can fly with them for free. Southwest is creating a more social experience because not only are they rewarding active members, they’re also connecting with non-members who may eventually become members.

 

Boost loyalty through referrals.

Southwest Airlines’ Companion Pass program makes members feel special, and is a great way of saying “thank you” to loyal customers. More importantly, it’s a way for customers to treat their family and friends through the rewards program, thereby boosting their loyalty. Plus, referrals offer a great avenue for reaching new people and getting new members into the program.

 

Reward more than just purchases.

Online-only retailer Gilt does well in keeping up with its big-brand competition. Gilt goes out of its way to instill loyalty by offering rewards to more than just the customers who buy from them. They look into other channels outside of their online store in order to extend rewards to customers who might buy from them.

 

Social-proof mechanisms

Kirk refers to many loyalty programs as having an “Omega Man” experience, meaning that they treat members as if they’re the last person on earth and, insofar as the loyalty program is concerned, isolating them from all other members. Yet humans are social beings.

A smart loyalty strategy is to let members know what other members are also doing in the program, whether earning points, increasing their loyalty level, or receiving rewards. Such “social proof mechanisms” cement customers’ confidence in a brand, consequently increasing their loyalty.

 

Scarcity

Blood and Sand is a St. Louis-based restaurant exclusive to those who pay a fee to become members. What makes this type of customer loyalty program interesting is their use of the concept of scarcity. First, not everybody can become a member. Second, they limit the number of people who can join the restaurant at any given time. So, just being able to join the club as a member elevates a customer to a certain status. As a result, the member initially becomes attached to the brand itself before becoming loyal to the experience of the restaurant.

 

Maximize personal experience.

Starbucks’ customer loyalty program is one of the best in terms of offering personalized customer experiences within their general customer base.

Blood and Sand is also a perfect example for maximizing personal experiences. Since they limit their number of customers, the brand knows who comes in on a personal level. They talk to customers like they know them. Even the owners may drop by a table for a chat or send a customer an email.

 

Create reciprocity.

Customers want to feel like they’re more than just numbers and that a business sees them as special. Creating a reciprocal relationship means recognizing customers’ value, reflecting back to them how they recognize the company’s value. Starbucks, Southwest Airlines, and Blood and Sand do an excellent job at this.

 

Develop a loyalty strategy.

Kirk illustrated that when dealing with a smaller customer base, like Blood and Sand, or if a company has the right kind of brand, a programmatic approach to loyalty may not be necessary. Such businesses ought to focus more on developing a loyalty strategy rather than a loyalty program. Conversely, if there exists a little disconnection between the brand and the customer, or if the company has a large customer base, such companies might want to direct their attention to a well-structured customer loyalty program.

 

Don’t look at competition.

Kirk highly suggests that when creating a loyalty program, don’t look at what the competition is doing. Instead, position yourself as a market leader in terms of bringing in novel loyalty ideas by looking at what other industries are doing with their loyalty programs and incorporating such ideas into your program. It’s a matter of bringing something new to the table enough for you to wow your customers.

Finally, creating a more engaging loyalty program boils down to personalizing the program to fit your customers’ needs and desires, as well as designing a loyalty experience that is in line with a brand’s offerings and experiences, both online and in the real world.

To learn more about customer loyalty rewards programs, visit Maritz Motivation Solutions or BigDoor. Download the other Customer Loyalty Space episodes for free in iTunes today!

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This interview was provided by Gsummit media partner TechnologyAdvice, an Inc. 5000 company that is dedicated to educating, advising, and connecting the buyers and sellers of business technology. Interview conducted by Clark Buckner.

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