They say great artists always steal from the masters – and loyalty marketing can certainly be an art. There’s a lot of wisdom in learning from what the experts do (or don’t do) well.
So whether you’re revamping an existing loyalty program or implementing one from scratch, here are five tips to take away from big brands that are succeeding at customer loyalty.
1. Soft benefits lead to solid loyalty – Amazon Prime
Conventional wisdom suggests that charging customers to be a part of your loyalty program is a bad idea, yet Amazon has made it work. The ecommerce giant consistently ranks in customers’ top ten favourite loyalty programs, and generates an estimated $600 million in membership fees alone.
The takeaway here is not that you should be charging customers to join your loyalty program (there are relatively few brands that can pull that one off). Rather, what is it that makes Prime members so engaged – and willing to renew their subscription year after year?
There are many reasons Amazon, as a brand, wins customers’ hearts – convenience, a consistent experience and trust are a few key ones. And their Prime program embodies all three.
An ever-growing list of “soft” benefits – like their famed free shipping, movie streaming service and early access to deals – make for an excellent customer experience that keeps members coming back to Amazon for a variety of needs.
Consider what benefits your organisation could offer loyalty program members. For a retailer, free shipping is just the start – think early access to sales, extended return periods, etc. A hotelier, on the other hand, might offer free late check-out or special upgrades.
Whatever your business, there’s likely low-cost benefits you can offer that will add significant value to your members’ experience.
Key takeaway: Soft benefits (like free shipping or exclusive access) contribute to a better overall experience – and experience is essential.
2. Be consistent and convenient, at every touchpoint – Starbucks Rewards
When it comes to consumers’ favourite loyalty programs, Starbucks Rewards always comes out near the top. Even after a rocky period last summer, when changes to the U.S. version of the program upset lower spending customers, membership continued to grow overall.
One of the key factors in the success of the program is it’s convenience – especially on mobile. Starbucks Rewards is a great example of a mobile app perfectly integrated with a loyalty program. Members can view and redeem their rewards, pay for their coffee and even order ahead for pick-up from some locations.
I decided to download the app while researching this post to see what all the fuss was about. I haven’t used my Rewards card in a while, and it’s linked to an old email address, so I had no idea what state my account would be in. In seconds, I was logged in to the app and could see that I still had 8 stars and two rewards waiting to be redeemed.
I’m already planning when I can get to Starbucks and use my rewards before they expire… And just like that, the app re-engaged a previously lapsed loyalty customer.
Of course, it’s not just me. According to Nielsen’s latest Global Loyalty Report, 60% of customers found store-specific loyalty apps appealing. And two-thirds of consumers were in favour of loyalty programs that could integrate with mobile payments.
So, if you havenât got a mobile app or integration for your program, itâs time to consider having one developed. And look for other ways to build convenience into your program as well.
Key takeaway: Make convenience – especially on mobile – a priority, to keep consumers engaged and active in the program.
3. Keep it simple – Boots Advantage
In a survey from Rare Consulting, the Boots Advantage Card ranked well amongst consumers for it’s simplicity. And it’s no wonder – the points earning and spending scheme is very straightforward. Members receive 4 points for every pound they spend, and each point is worth 1p to spend in store. It’s easy for members to earn points, understand what they’re worth, and redeem them.
The danger with a points to cash scheme is that it’s easy for competitors to replicate, and doesn’t necessarily build the deeper, lasting loyalty brands need. Still, there’s something to be learned from the ease and simplicity offered by Boots’ program.
Ease of participation is essential, especially for newer generations of consumers. 89% of consumers said they’d be more influenced by a program that was quick and easy to use, according to a report from Ecrebo. And 36% of 16-24 year olds said they were put off by complicated schemes, compared 25% of over-35s.
In an effort to keep programs profitable, keep up with changing technology and encourage customers to engage, many brands have unintentionally built a great deal of complexity into their programs.
Take some time to assess your program and see where you may have added unnecessary complexity. Give plenty of thought to the customer’s journey through the program, from signing up to earning points, through to redeeming rewards.
You might consider having a few test subjects who are unfamiliar with the program complete several tasks with it (such as checking their points balance or redeeming an offer), to see where they get stuck and where the journey could be simplified.
Key takeaway: Reduce friction where possible and make it easy for customers to understand and engage with the program.
4. Learn to be flexible – Tesco Clubcard
Supermarket loyalty schemes have a way of feeling more like data mining machines than a way for companies to show their appreciation to valuable customers.
Yet in Rare Consultingâs survey, the Tesco Clubcard scored high on personalisation – likely due to the customer’s ability to choose the rewards they want, rather than having to accept the same generic discount as everyone else.
What can brands learn from this? Customers want options. Nielsen found that 81% of customers wanted flexibility in where they can earn points (i.e. online, in-store, etc.), while 79% wanted loyalty programs to offer them a choice of several types of reward. This is where Tesco Clubcard does a particularly good job, offering members several ways to use their points, from in-store discounts to vouchers at popular restaurants.
Take some time to assess how flexible your current loyalty program is. Are customers all given the same generic reward, or do they have the option to choose the one that suits them best? Can they select when and where to redeem their points or are they locked in by restrictive expiration dates?
Building more options into your loyalty program allows customers to personalise their experience and feel that they’re getting real value from their relationship with your brand.
Key takeaway: Customers want flexibility – both in when they can use their points and the rewards they can redeem. Allow customers the freedom to customise their loyalty experience.
5. Build a brand customers connect with – Apple
Apple is the only brand on our list that doesn’t have a loyalty program. Yet they’ve managed to retain an incredibly loyal base – customers line up for hours to buy their latest products and even passionately defend the brand to non-Apple users.
Of course, not every brand can be Apple. An engaging loyalty program is often essential to your customer retention strategy, especially if you’re competing in a crowded marketplace such as the retail sector.
However, there’s still a key lesson to be learned from Apple that can improve the stickiness of your loyalty program and your brand itself. Apple have built a brand their customers can connect with on an emotional level. They’ve turned customers into not only fans, but advocates. How? It’s fairly simple…
As Simon Sinek argues in his now-famous TED talk: “People don’t buy what you do, they buy why you do it.” (If you haven’t seen Sinek’s talk, take 20 minutes and watch it here – it’s worth it).
What does this mean? Instead of placing all you focus on products and features, work on establishing brand values that will appeal to your customers. Then communicate them in the way you handle every interaction – not just within your loyalty program, but throughout the customer experience.
Apple has crafted a story and a personality around their products that their audience wants to buy into and be a part of. Their customers simply âlikeâ the brand – a lot. And likeability – in other words, an emotional connection with a brand – is an essential ingredient in customer loyalty (Rare).
Key takeaway: Loyalty is an emotion, not a transaction – create lasting loyalty by building a brand and a story that customers will connect with.
What lessons have you learned from successful loyalty programs? Let me know in the comments!