Are loyalty programmes the holy grail of customer experience (CX) and the secret to true loyalty?
The average South African has nine loyalty cards. Why? Because of rewards, benefits, points, and cash back… But is it really working?
After all, there’s a big difference between having thousands of subscribers on your loyalty programme and having 50 loyal customers.
For example, let’s say there are three different grocery stores within a 10-kilometre radius, each with its own loyalty card offering rewards, special discounts, and a free coffee here and there.
All three have a constant flow of customers redeeming the yummy deals, but the customers aren’t loyal at all. Not only do they have loyalty cards for all three competitors, but their wallets are filled with cards.
What does loyalty mean?
Pets 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 are not very 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.
“What’s in it for me?”
When you reflect on a campaign or programme, does it really tip the scale towards customer value? Or are you using it to get more sales or track more behaviours?
A loyalty programme should not be only 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 the business and the customer.
Starbucks 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. Customers feel personally accommodated and considered throughout the process.
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 and 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.
Converting bargain buyers
Here are some tips for transforming bargain-hungry consumers into loyal fans:
- 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.
- 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 deals based on data that is irrelevant to the specific customer’s needs.
- 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.
- 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.
- 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.