In times of uncertainty, customer loyalty is the secret weapon that helps brands win the battle.
While organizations realize the importance of building a loyal client base, they often struggle when it comes to nurturing the relationship with their customers and developing a customer experience that fosters a deeper connection between the customers and the brand.
Designing loyalty programs based on the know-how of the customer’s buying patterns is an effective way to do that because it personalizes your customer’s interactions with your brand and wins their trust and support.
In this episode of One-to-One, Bryan Pearson, Strategic Advisor and Former CEO of LoyaltyOne, takes a deep dive into the nuances of building customer loyalty and gives us an in-depth analysis on why organizations need to integrate data into their loyalty programs.
One-to-One gives you a glimpse into the world and mindset of CX leaders. If you liked this conversation and don’t want to miss future episodes, catch us on Spotify, YouTube, Apple Podcasts, Google Podcasts, or your favorite podcast app.
Here are some actionable insights from our discussion with Bryan
Migrate your focus from rewards to relevance
Price-specific benefits help you appease only a small proportion of your customers who fall into the category of “financial optimizers”. For rest of your customer base, brand loyalty is influenced by numerous factors in addition to monetary rewards. So, loyalty programs need to be so much more than discounts and monetary incentives. Successful brands usually sell their products and services at normal prices and find other ways to generate value for their customers.
“Just offering rewards does not tug at the emotional heartstrings of most customers and does not generate loyalty. Customers always feel a deeper connection to people and brands who seem to understand what they value and why they find it important. The migration from rewards to relevance is thus highly critical as it creates emotional loyalty.” - Bryan Pearson, Former CEO of LoyaltyOne
Get rid of data silos within the organization
A data silo is a phenomenon that occurs when customer data is not made available to all the relevant departments across the organization and is shared only among particular teams. These kinds of data silos are often responsible for untargeted marketing and lack of relevance in loyalty programs. Focus on understanding data as an asset and how you can structure it and consolidate it to create a language that is spoken across departments.
Understand how customers engage with your brand
Know how your customers engage with your product and services and understand the context surrounding those purchases. Go beyond the Recency-Frequency-Monetary (RFM) model and dig deeper into the data to get a better idea about the ways in which customers interact with your brand. By optimizing your database of customer information, you can come up with more targeted offers and your marketing all of a sudden reflects a deeper understanding of your customers’ preferences and buying intentions.
Ask these questions to assess the efficiency of your loyalty programs
According to Bryan, you need to answer three questions to ensure the effectiveness of your customer loyalty initiatives:
Do you know the customer in terms of their preferences and needs?
Are you doing something to help the customer experience your brand in a new and different way?
Are you finding unique ways to provide value-added offerings that reflect who the customer is and what they prefer?
By not losing sight of these three questions, organizations can design loyalty programs that are highly relevant to their customers, which in turn, will foster customer loyalty.