Are loyalty programmes the holy grail of customer experience (CX) and the secret to true loyalty?
The average South African carries around nine loyalty cards. Why? Because of rewards, benefits, points, and cash back… But is a loyalty programme really working?
After all, there’s a big difference between having thousands of subscribers on your loyalty programme and having 50 truly loyal customers.
For example, let’s say there are three different grocery stores within a 10-kilometre radius, each with its own loyalty programme offering rewards, special discounts, and a free coffee here and there.
All three have a constant flow of customers redeeming these enticing deals, but the customers aren’t truly loyal at all. Not only do they have loyalty cards for all three competitors, but their wallets are overflowing with such cards.
What Does Loyalty Mean?
Loyalty, in its truest sense, is about more than just rewards. Pets, for example, show loyalty through affection, protection, and trust.
However, there may come a time when the neighbour offers cat food that tastes better than what you offer your cat. In fact, the neighbour is also more affectionate and lets your cat sleep on the bed, in the sun.
Before you know it, your cat develops loyalty towards someone else, even though you’ve spent years loving it and feeding it.
Humans aren’t much different. When customers feel they are noticed, valued, and treated better elsewhere, they develop a new loyalty.
Adding insult to injury, it doesn’t matter whether or not the competitor has a loyalty programme. It’s about whether they understand your customer better than you do.
Checkmate.
“What’s In It for Me?”
When you reflect on a campaign or loyalty programme, does it really tip the scale towards customer value? Or are you using it primarily to get more sales or track more behaviours?
A loyalty programme should not only be about the behaviour you want your customers to follow, but also about creating an experience that relates to their journey, adds personalised value, and benefits both the business and the customer.
Starbucks, for example, is a massive global company, but it isn’t known for affordable coffee. Apart from providing a wide variety of coffee concoctions, it uses the very popular (and genius) tactic of writing the customer’s name on their cup.
Why is this so brilliant? Is it because customers receive the drink they ordered?
Sure, but it’s not that simple…
You see, asking for a customer’s name, writing it on the cup, and addressing them directly adds personalisation and value beyond sales. This approach turns a simple transaction into an experience, something that every effective loyalty programme should aim to do.
Buying a Valuable Outcome
Consumers don’t judge your service or product quality based purely on deals, marketing emails, reward points, “convenient” chatbots, or “DEAL25” coupons. The overall experience lies in the outcome of the purchase.
Many people would rather buy from a local butcher they know and trust than a grocer offering cheaper meat with inconsistent quality, even if that grocer has a loyalty programme.
This is why many customers don’t like it when a favoured provider has new management. Loyalty isn’t about the products but the brand in its entirety, which should be the foundation of any loyalty programme.
Converting Bargain Buyers
Here are some tips for transforming bargain-hungry consumers into loyal fans through your loyalty programme:
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Make It Meaningful: Offering generic deals may make you a nameless discount on a grocery list. Meaning and value create loyalty that goes beyond monetary benefit, a crucial element in any loyalty programme.
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Make It Relevant: If you’re going to track customer behaviour, be sure to actually personalise the experience. There’s no use in advertising loyalty programmes deals based on data that is irrelevant to the specific customer’s needs.
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Make It CX-Based: When introducing a new system or service, like chatbots, consider how it affects CX, not just the business. Customers don’t want to get social with a bot or go through several call redirections to get a solution. A loyalty programme should enhance the overall customer experience.
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Make It Reciprocal: If you want customers to be loyal, show loyalty in return. This includes learning their names, developing relevant and exclusive deals, giving them royal treatment, and focusing on their purchasing experience—all key components of a successful loyalty programme.
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Make It Real: Let InteractRDT help you to create customer personas that are based on authentic and best-practice CX metrics, audits, planning, and more. A well-executed loyalty programme should be grounded in genuine customer insights.
Conclusion: Elevate Loyalty Beyond the Programme
Loyalty programmes can be powerful tools in building customer relationships, but they are not the sole answer to cultivating true loyalty. The key lies in creating a holistic experience that resonates with your customers on a deeper level. It’s not just about points or rewards; it’s about understanding, valuing, and engaging your customers in a meaningful way.
To achieve this, businesses must go beyond the basics of a loyalty programme and focus on delivering personalised, relevant, and emotionally engaging experiences that truly connect with their customers. By doing so, you’ll not only retain your customers but also turn them into passionate advocates for your brand.
Let InteractRDT guide you in designing a loyalty programme that doesn’t just reward transactions but fosters genuine, lasting loyalty—because true loyalty is earned, not bought.
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