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Behavioural segmentation: The complete guide for ecommerce marketers
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The saying "too much of a good thing" is often true—too much ice cream, too much sun, too much rational thought. While ice cream, sunshine and logic aren't harmful in general, too much of them can cause problems—a stomachache, sunburn and a one-sided approach to marketing.
Striking a balance with food and lifestyle is great for your overall health—just like balancing rational and emotional factors are essential to the overall health of your loyalty initiatives. Research confirms something most of us already know intuitively: The reasons people make certain decisions are often strongly influenced by emotion rather than pure rational calculation.
Emotion plays a critical role in decision-making, and emotional decisions are often even stickier than rational ones.
Brands whose initiatives are based solely on rational incentives are missing out on a powerful opportunity to strengthen their connections with top customers, as well as create more customers like them. It doesn't mean scrapping discounts and rewards points—people, after all, represent a complicated mix of emotion and rationality—but it does mean including and emphasizing elements designed to appeal to consumers' emotions.
That's especially true in an era where the average consumer is enrolled in more than seven loyalty programs. Clearly, consumers will provide information to a brand as part of a loyalty value exchange but knowing what emotional (and rational) levers to include starts with personalization.
The first step is a paradigm shift. Personalization and making the customer the center of your loyalty initiatives is key. Brands should analyze their initiatives through the lens of connection and affinity as opposed to blanket special offers and impersonal messages. What content, offers or experiences could you present to your loyalty members that foster a greater sense of connection with your brand and drive a purchase?
It can be surprisingly difficult to hit on the right formula, partly because many brands think they have a far better handle on their emotional appeal than they really do: According to a recent survey, nearly 70% of business owners don't understand how their customers think. Which, knowing why your customers churn, or their attitudes and values can make a huge impact in your loyalty initiatives and your bottom line.
That said, connecting to your customers in emotionally different ways may be beneficial.
One smart goal is to draw consumers into relationships with the brand, and with like-minded others who share a similar aspirational identity. Those connections are especially powerful because when together, consumers can affirm and deepen their shared values and brands reinforce their role in providing value. For example, when members reach the top, invite-only loyalty tier at NOBULL, a CrossFit-focused fitness gear brand, they're invited to VIP-only events such as classes taught by the company's founders. That experience enables the customer to feel like a core member of an elite club and underscores NOBULL's essential role in helping customers achieve their CrossFit dreams.
Research shows a growing number of consumers prefer spending money with brands that demonstrate values in alignment with their own—a link which has grown steadily in the past eight years. For brands whose customers unite over certain shared values, this can lead to a stronger emotional connection to the brand. Outdoor retailer REI, for example, created a charity to work for expanded access to outdoor opportunities and donates $5 from each new loyalty membership payment toward the effort. Other brands, like Kroger, demonstrate a similar commitment that allows consumers to pick their own philanthropic project. Kroger reward members select a charity of their choice that then earns rewards based on purchases.
Adding immersive experiences are also a draw for loyalty customers. Take, for example, designer accessories brand Vivrelle. They opened a chic new members-only showroom in Manhattan where membership customers can stop in for a cocktail as part of their regular membership fee.
Vivrelle's approach accomplishes two things: One, it gets people into the store. Once there, visitors feel part of the luxurious Vivrelle community thanks to their membership, thus creating a memory and an emotional connection that lasts long after the visit.
Your bottom-line can benefit from emotionally loyal customers, too, especially in the long-term. One study showed emotionally loyal customers are more than twice as valuable than highly satisfied customers on a lifetime value basis. So how do you cultivate more emotionally loyal customers? And how do you measure their emotional attachment?
"The first step is knowing who customers are, what their needs are and how emotionally attached they are to your brand," according to Tamara Oliverio, VP, Strategic Consulting at Epsilon. "Epsilon's proprietary Attachment Loyalty score does just that—it leverages first-party and zero-party data to measure how emotionally attached a customer is to a brand."
This piece of Epsilon's loyalty platform is fueled with real-time sentiment, so you can see how campaigns, promotions, and engagement strategies impact customers' emotional attachment.
If you want a customer loyalty relationship that lasts, you'll need to appeal to customers' hearts as well as their heads. Loyalty initiatives that combine rational incentives, such as discounts and rewards, with emotional appeals, such as a sense of belonging, will be best positioned to win customers' deep and ongoing loyalty. The strategic balance of both strategies will lead to a happily ever after.
