Customer behavior is a difficult thing to predict.
It is difficult to implement loyalty programs to inspire customer loyalty and retention. Loyalty programs that reward participants (customers, end users, members, consumers, or respondents) for behaviors and attitudes can build deep participant advocacy and a sustainable competitive advantage. Today’s consumers need to feel empowered; the customer has to know what is in it for them, not just for the company, and we (the company) drive that empowerment to advocacy.
People who have tried to define loyalty usually approach it from one of two different directions- attitudinal and behavioral. Attitudinal loyalty implies that loyalty is a state of mind. This means that a participant is “loyal” to a brand or an organization if they have a positive, preferential attitude toward it. In terms of attitudes, increasing a participant’s loyalty is virtually equivalent to increasing the participant’s preference toward your brand. It is closely tied to satisfaction, and any organization wanting to increase loyalty should concentrate on improving its product, its image, or other elements of the customers’ experience. On the other hand, the behavioral definition of loyalty relies on a customer’s actual actions, regardless of the attitudes or preferences underlying that specific behavior. Loyalty is concerned with the “re-purchase” activity, regardless of any previous attitudes or preferences (Peppers and Rogers, 2015). Although each of these directions is valid, they have different implications and lead to very different strategies for businesses.
Customers thrive on recognition and sharing their experiences. The All Digital Rewards team has found that rewarding those types of customer behaviors delivers a well-rounded, three-dimensional experience.
Our team found that rewarding specific actions greatly influence the customer’s behavior. The time of rewarding is out the window! Businesses need to engage not just for transactions and information, businesses need to look at rewarding for social interactions, engagement, and recommendations (referrals).
Think to yourself: What makes a customer feel that a loyalty program is worth joining? What makes a customer loyal? All Digital Rewards understands that customers won’t participate in a program that doesn’t offer sufficient value. According to a recent report from TechnologyAdvice, most US participants (57%) join loyalty programs—both card-based and digital—to receive discounts on products and services. Another reason for customer participation in loyalty programs is to earn benefits, like points, that can later be redeemed for rewards. Earning a status (think VIP) is the third reason for participating in loyalty programs.
Regardless of how you develop your loyalty program, make sure the program supports the customer experience and not the business experience. In certain cases, loyalty programs need to be designed to make the customer feel you are reaching out to them personally, with more specific targeted rewards efforts, and with personalized communication. Customers will feel as though they have been hand-picked to provide their input.
Everything comes down to communication. Set the tone with your communication. Be transparent and precise with information as to the program’s future. Use all communication channels available to carry these messages. Emphasize your intention to continue to recognize and reward good participants in the future. Perhaps allude to future programs/promotions and be generous. Being generous gives you the opportunity to turn a negative into a positive.
Behavior motivators increase loyalty program retention and drive positive behaviors amongst your customers, thus, strengthening your relationships with your audience. As we mentioned, we need to reward for more than standard activities. Special participant contacts or events go a long way toward gaining engagement and loyalty.
We have found a few key behavior motivators, such as
- Referral Programs
- Service Anniversary Acknowledgements
- Reward Incentives
- Social Media Shoutouts
All Digital Rewards works with you to develop the right triggers to further engage your customers. We strive to engage as often as possible and in as many ways as possible. The relationship between customer and company needs to be at the forefront of any loyalty program. Each interaction presents an opportunity to gain more information about customers, to find out about their lifestyles and what they value. We understand that a full-serve incentive, loyalty, and rewards solution can maximize the impact and the relationships that drive your business. We research your participant demographics to recognize individual participants and reward them for desired behavior. Consider topping up participant accounts to the next redemption level. You want participants to continue to have goodwill toward your organization. Consider a small gesture of appreciation; now is not the time to be cheap. In some cases, you are dealing with customers’ bank accounts (many program participants consider their point balances like cash), so don’t leave them feeling cheated.
We have found that setting drip campaigns is a great way to pull lost customers back in. Gamification is a method of spurring activity from a lost customer. Issuing an entry into a game, for example, an instant chance to win sweepstakes, these methods can show personal attention to a participant when previously there has been none. Social automation, triggered emails, and even social advertising all allow your company to have a personalized message ready to go as soon as customers mention a keyword, open an email, or display interest of any kind. The ideal discussion should feel like a one-to-one dialogue. These types of personalized messages can include anything from a response to unhappy participants to offer them a discount, to an encouraging promotion for particular products or product categories based on interest, and to a cross-sell or upsell on a particular good or service. Ninety-six percent (96%) of participants believe email personalization can improve marketing performance. Heavy personalization techniques allow companies to develop highly personalized, relevant marketing campaigns by incorporating participant profile information, segmentation or demographic behavior, channel behavior, purchase history, personalized product or service recommendations, online activity, and other attributes from a participant database.
Providing a program where participants can access their “online store” 24/7 puts them in control of their shopping cart. Experience has shown that participants enjoy real-time availability, fast reward delivery, and comparison features to ensure they are getting the greatest valued reward.
Some 59% of participants say they would be more likely to join a loyalty program that offers a smartphone app.
A large majority (82%) of participants say they are more likely or much more likely to shop at stores that offer loyalty programs.
One study’s finding demonstrates that a reward program’s relative attractiveness has a positive impact on behavioral loyalty. In other words, the more attractive the loyalty program is perceived to be, the greater the perception of rewards gained from participation (Wright and Sparks, 1999), which in turn seems to be effective in driving a share of the wallet.