Loyalty programmes were once all about buying products and collecting points, but not anymore. Cutting-edge loyalty is now about emotional engagement – tapping into, encouraging and sharing a consumer’s love of a product, destination or lifestyle.
This approach can powerfully reinforce brand values and demonstrate there is a vibrant community of like-minded consumers out there ready to validate and encourage particular purchasing behaviours.
Why is this important right now?
Consumers are generally suffering from loyalty points fatigue. There are so many loyalty programmes out there that promise the world at the point of sign-up, but they do not reward customers soon enough and lose customer engagement. Points keep adding up for consumers, but they may have forgotten what they were actually collecting them for in the first place.
That kind of apathy marks the death knell of a loyalty scheme, and this disconnection is exactly the opposite of what successful brands are aiming to achieve in today’s competitive market. Consumers have more choice than ever before – be it who they shop with, which company they use to travel or where they choose to eat. It is the brands that can give something extra, such as a compelling experience, a personal touch and feeling of belonging, or relevant customer service, which win out.
Deeper dive:
The new emotion-driven loyalty is generally driven by the following ‘three Cs’
-
- Community – When a brand builds a group of like-minded customers who can share their own real-world stories, tips, experiences and reasons why they love a brand.
- Content – When a brand shares information and actionable insights that resonate with their customers and enrich their lives in some way.
- Charity – When a brand donates a proportion of each sale to a good cause which aligns with both its corporate values and the values of its customers.
- Community – When a brand builds a group of like-minded customers who can share their own real-world stories, tips, experiences and reasons why they love a brand.
The need for a community connection:
Ralph Browning, Business Development Director EMEA at Epsilon, explained on the latest Let’s Talk Loyalty podcast that the rewards dished out by loyalty schemes need to be much more connected with a customer’s lifestyle.
Browning said: “With many loyalty programmes, it's a bit of a tick-box thing, so you'll spend a buck or a euro or a pound, and you get points. Brands throw it out there and expect it to really work, but it's not really that connected.”
Brands need to consider what it is they stand for and why customers are shopping with them in the first place. North Face allows its members to earn points for doing what they love – for example, sharing a picture of themselves on top of Yosemite Valley or proving they have climbed some massive cliff face in The North Face gear can help accrue loyalty points.
“It reinforces the brand as being adventurous and it's a really cool little idea,” Browning explained. It is the type of thing members will share on social media too, and that word of mouth brand exposure can help stimulate interest in brands and grow their audience.
The power of loyalty content: There are also organisations in the health and wellness sector rewarding healthy consumer behaviours, or sharing content about positive lifestyles. On top of that they are creating communities where customers can share experiences.
Public acts of charity: The third ‘c’, charity, can be a powerful factor in any loyalty scheme too. We live in an age when consumers want to support a cause and are not afraid of telling people about it. Placing a charity partner or social initiative at the heart of a loyalty programme taps into that line of thinking and can really make a brand-consumer relationship fly.
Fostering the digital village hall: If brands can make consumers feel like they are part of a community, they’ll keep coming back. Putting like-minded people together online so they can connect and discuss experiences and products truly validates a brand.
Some brands also have chat groups which include brand advocates. It is all part of brands going beyond rewarding a transaction to creating emotional attachments and, instead rewarding a lifestyle.
The bottom line:
A focus on emotion-led loyalty is part of wider changes in how organisations are engaging with customers. In a world of online third-party cookie depreciation, brands know they must think differently and build first-party data to ensure they can connect with consumers. In terms of loyalty, Browning said: “Rather than the idea of, ‘I give them points, they'll spend more’, it's more about ‘if I give them points, they'll tell me more about themselves’.” And that represents further plus points of emotion-led loyalty. Brands doing it well will continue to engage, continue to boost relevant customer data, and continue to grow.