As increasing returns inspire U.S. companies to spend over $2 billion a year on loyalty programs, competition to keep members engaged has intensified. While consumers now hold an average of 13.4 loyalty program memberships, the number of programs in which members are active has declined slightly, according to the 2016 Bond Loyalty Report. Based on findings from the report, here are five steps you can take as a marketer to make your loyalty program stand out among the rest:
1. Make redemption fast and easy. Many marketers focus on rewards, but today, the redemption experience matters more than the reward itself. Seventy percent of loyalty members find instant retail redemption appealing, indicating speed to be a large component of a member’s satisfaction with a program.
A poor redemption experience makes your program vulnerable to defections, and non-redeemers are 2.3 times more likely to defect than those who redeemed in the past 12 months. Meanwhile, members who have recently redeemed are two times more likely to be very satisfied than those who have never redeemed. To increase engagement, think beyond the rewards themselves to create a broader experience that's aligned with customers’ preferences and needs. Based on these statistics, that means implementing effortless, quick redemption.
2. Increase personalization. Members today expect much more personalization than they’re getting. One in two members agree personalization is important in the program experience, yet only 22 percent are very satisfied with the level of personalization they're experiencing. Of course members want birthday offers, but they also want you to remember their usual purchase, make recommendations based on their purchase history or make offers based on inferred preferences. They want the barista to greet them by name when they purchase their morning coffee. They want to order and pay for a customized sandwich by phone, tap an “I’m Here” button when they arrive in-store and score some free food in the process. None of this comes easy to marketers who need to segment, analyze and respond to customer data. However, the effort generates results: Highly personalized loyalty programs deliver eight times more member satisfaction than other loyalty programs.
3. Update your loyalty permission policy. “Set it and forget it” no longer works. Permission builds trust, but in 2016 just 34 percent of consumers strongly agree that loyalty programs are trustworthy, down from 37 percent in 2015. Stay vigilant about your place on the “cool to creepy” scale of customer personalization. Don’t overcomplicate the permission process. Collect only the information you need. Ask permission — even permission to infer. Use what you collect, and show members what you’re doing. And check back often with your customers.
4. Ask the right questions about mobile. While 49 percent of members don’t know whether their loyalty program even has a mobile app, many marketers see the increasing penetration and potential of mobile and move straight to a mobile-only mind-set. You need to take mobile seriously, since 57 percent of U.S. loyalty members would like to engage with loyalty programs via mobile phone. However, depending on your situation, a mobile-first or mobile-enabled approach may work better than mobile-only. Before charting your course, ask what customers need from your brand, how your program can help fulfill those needs, and how mobile can help you do that effectively. Member preferences should drive your decisions.
5. Create a consistent customer experience. Today, every marketing interaction represents either loyalty in the making or in the breaking. Consistency is crucial: brands that create consistency across channels see nearly threefold gains in loyalty member satisfaction. That principle extends to interactions with front-line staff, as brands whose representatives reportedly make members feel special and recognized have 2.7 times higher program satisfaction. Yet today, only one in five loyalty program members strongly agrees that brand program representatives make them feel special and recognized. To work effectively, your loyalty program should complement the live brand experience, digital brand experience and overall customer experience.
Program operators and marketers will be pleased to affirm their investment in loyalty yields favorable outcomes, yet should also take note that they must ensure their program differentiates itself to sustain member engagement and activity. With a customer commitment that extends throughout your business, you can create the kind of engagement that turns potential brand defectors into brand evangelists.
Scott Robinson leads Bond Brand Loyalty’s loyalty design and strategy discipline.
Scott Robinson is vice president of design and strategy at Bond Brand Loyalty, a global customer experience marketing, management and measurement company that specializes in building brand loyalty for the world’s most influential and valuable brands.
Scott Robinson leads Bond Brand Loyalty’s Loyalty Consulting & Solutions discipline and is our thought leader for consumer loyalty strategy engagements. His focus is enabling clients with the best possible solutions for their specific objectives and environments, and ensuring Bond maintains market leadership in terms of loyalty and CRM innovation, technique and approach.
Scott has over 10 years’ experience designing, implementing and optimizing large-scale loyalty and CRM programs, and helping clients understand how to use them as stepping stones for inspiring powerful relationships with their customers. Along with his strong experience across a number of industries, including consumer retail and financial services, Scott brings a highly disciplined analytics approach to strategy development for clients.
Earlier in his career, Scott launched and developed our Consumer Insights and Strategy Group, and spearheaded the development of the CRM principles and techniques, campaign management protocols and consumer data-driven strategy development tied to some of North America’s most celebrated loyalty programs. Scott’s current focus is the intersection of marketing and neuroscience, through his involvement with The Maritz Institute. Scott is frequently called upon to comment in the media, and is a frequent speaker at industry events including conferences by Loyalty360, eTail, CMO Exchange, CMA and AMA. Scott holds an MBA from the Richard Ivey School of Business at the University of Western Ontario.