A new breed of loyalty programmes focused on consumer emotion are helping brands extend beyond transactional engagement with their customers. Emotional loyalty can be driven by nurturing a group of like-minded customers who become advocates of the brand or by using highly relevant content to enrich people’s lives. It also comes when loyalty programmes are entwined with good causes that meet the values of their members.
Why is this important right now?
A lot of loyalty programmes are recruiting members, but then failing to build on that initial point of contact. They are a straightforward point collecting exercise rather than a community-building, content rich, or charity-supporting platform with the potential to truly connect with the way people are living their lives.
In a world full of choice, people want to align themselves with brands that bring additional value. The value exchange between consumer and brand has evolved, with many people now happy to provide their personal information or sign up to an organisation’s loyalty programme as long as they get something tangible in return.
Ralph Browning, Business Development Director EMEA at Epsilon, explained on the latest Let’s Talk Loyalty podcast that consumers who get a reward or something that resonates from a scheme are more likely to return to that brand.
Browning said: “The sooner you can get somebody to get something out of a programme, even if it’s money off a pizza or two for one, if you get that in there in the first 100 days, you’ve got them for life. [If not], eventually, people forget they’re a member of a programme or what the points are for and what [they’re] trying to get.”
Deeper dive
These four brands do emotion-driven loyalty well:
- The North Face – the outdoor equipment and clothing retailer calls its ‘XPLR pass’ the “community that never stops exploring”, playing to its target audience of adventure seekers. It offers money off first purchases over £100, free delivery and early access to products, but really connects with members on an emotional level through its birthday discounts and enabling members to participate in exclusive contests and events.
Points can be earned by registering at national parks and monuments, and selected events and locations, showing the brand will reward members for doing what they love to do. It places the brand in its customers’ everyday lives. Browning said: “It reinforces the brand as being adventurous and it’s a really cool idea. So I think clever gamification, and the community side, is where programmes are definitely moving.”
- Walgreens – The health and beauty retailer continues to reinvent its myWalgreens loyalty programme, and now give access to speedy same-day in-store pickup for online orders and money-off on a range of own-brand goods.
The emotional tie to the scheme comes in the form of “Only for you” exclusive deals based on consumer preferences, as well as personalised health and wellness advice accessible via the mobile app. It has also created communities covering topics such as beauty and wellness, enabling likeminded people to engage with each other online. In addition, Walgreens rewards members for healthy behaviours such as eating certain products and achieving a target number of steps in one day.
- Procter & Gamble (P&G) – the consumer goods company has embedded charity and good causes into its loyalty programme. By joining, consumers can collect points on the P&G items they purchase, and redeem those points on charitable donations such as its global ‘Children’s Safe Drinking Water Program’.
Members can also redeem points to enter prize draws, restaurant trips, and family online entertainment subscription services, showing both a clever use of rewards and the company’s close connection to the wider community.
- Etihad Airways – the airline’s Etihad Guest loyalty programme was one of the first to refer to passengers as “guests” which was intended to build on the idea of premium Arabic hospitality, according to Browning.
The idea of ‘community’ was embedded from the outset, with cabin crew made aware of member status to help foster a feeling of belonging in passengers using the company’s services. In 2020, Etihad Guest brought an additional perk to the programme, ensuring members’ miles now only expire after 18 months of inactivity, rather than after 24-36 months regardless of activity.
Consider the ‘three Cs’
Community, content, and charity. These three Cs are the foundation of emotional loyalty schemes, with the above examples showing how considering one or more of these Cs when developing a programme can create a compelling proposition for the modern consumer.
The bottom line
Both brands and retailers are thinking differently about how they navigate a changing world. In challenging economic times, consumers will be more discerning about their purchasing behaviour and they will want more from brands, but equally brands know they need to continue to improve in such a competitive landscape.
The way brands communicate with consumers online needs to change in light of the ongoing depreciation of third-party cookies. Brands are increasingly looking at loyalty schemes to swell their data reserves, but as Browning said consumers are wise to what is going on. They are asking “why should I tell you anything about me?”, and “what’s in it for me?”. This creates a fertile environment for emotion-driven loyalty programmes.