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Despite the multitude of resources deployed in pursuit of brand loyalty, many customers appear to be disillusioned by loyalty marketing and the intimacy it promises yet seldom delivers.
Today’s consumer may enjoy a level of intimacy with favorite brands that prior generations could not have imagined. And many consumers are actively interested in fostering that kind of relationship: Aimia’s Loyalty Lens found that 80% of respondents were willing to share key pieces of personal information with brands in exchange for a better brand experience.
However, this willingness also creates new demands and expectations of brands: consumers want to know who a brand is, what it stands for, and how it will move their personal relationship forward over time. And the data indicates brands are mostly failing to effectively answer these questions. In the same study, Loyalty Lens found that only 8% of customers felt they actually receive better offers as a result of sharing their personal information.
Marketers work with tools-at-hand (targeted communications, omni-channel customer experiences, analytics, loyalty programs, etc.) in hopes of driving a more sincere and personalized relationship with customers.
Unfortunately, in pursuit of creating stronger appeal, many brands make the mistake of turning their program into a proliferation of “add on” features, attributes, and benefits. This approach tends to leave customers - and often employees - confused as to its value proposition. To this point, in entrepreneur and communication expert Chery Conner cited a survey in her February 2014 Forbes column that nearly one-third (32%) of U.S. and Canadian consumers can’t identify which tier they belong to in their favorite loyalty rewards programs.
To help me better understand what was happening in the market place, I went on a field trip to various specialty retailers. I was most interested in learning how much the on-floor salespeople tended to know about their employers’ customer loyalty programs. In one example of many from this exercise, after selecting a retailer and location, perusing the floor and selecting a few items, I approached the cash register to conclude my purchase. The salesperson asked if I was a member of their loyalty program. I said no and asked her to explain the details of the program. She began to recite a broad description of the program and its value: paraphrasing, she told me if promised “store discounts, offers, and stuff like that.” Later, as I walked out of the store and into the crowded mall, I pondered the salesperson’s “and stuff like that” comment. What other features, functionality, or value was the company offering? When I went online to complete my post-purchase loyalty program registration, would I be pleasantly surprised? If something fell into the “and stuff like that” category, did that mean it was of lesser value than the benefits mentioned, or was my salesperson simply struggling to remember the program highlights? Regardless, my personal research suggests retailers often approach loyalty with an “and stuff like that” attitude. The 2015 Harvard Business Review article “Why Your Customer Loyalty Program Isn’t Working” is very direct in their assessment: “Organizations should have the courage to either take loyalty seriously — to be as loyal to their customers as they hope their customers will be to them — or get out of the game.”
In her column in entrepreneur.com, author and marketing expert Kim Gorden listed the biggest turnoffs in loyalty programs: “Too much spam and junk mail,” and “abandoning service for savings” were among the top items on her list. More is often less - especially when “more” gets translated to “and stuff like that” at point-of-sale... or it translates to “spam” on arrival in member inboxes. After over 100 years of pursuing more intimate relationships with customers, brands would be wise to recognize that today’s consumer has already invited them to the table and subsequently changed the conversation. The modern day consumer wants to know who you are, what you stand for, and how you can move forward – together. So keep it simple and personalized.
#1 – Make it personal by leveraging your brand heritage.
Designing a program to leverage differentiated aspects of the brand makes it stand out better and makes it easier for everyone – customers, employees, and others – to understand it. The Nordstrom Rewards program does this exceedingly well. With strong founding principles established by their founder, the company has kept it simple by focusing on exceptional service, selection, quality, and value. As the market evolves and technology advancements change how brands engage with customers – these values still hold true.
#2 – Keep it simple.
If understanding the core value of your loyalty program requires a PhD in calculus, you’re not doing anyone – or yourself! - any favors. Simple programs instill higher levels of trust and are more effective in driving desired behaviors. Many brands have brought programs back to basics in light of this newly-discovered truth. Wyndham’s new “Wyndham Rewards” is one of the latest to streamline its program, making the value proposition easier to understand and restore lost trust due to program complexity.
Making your program personal and simple increases the chance of improving the signal strength of your brand in the marketplace. It also makes it more likely the sales team will sell the program with the necessary knowledge and passion to make it successful. In summary, keeping it simple and personal makes it more likely customers will come to view your brand as a remarkable exception in today’s crowded - and largely unremarkable - customer loyalty landscape.
For more information contact us at [email protected] or visit www.aimia.com