To Make Customers Loyal, Discover Who They Are
I have a large coin purse bursting at the seams with loyalty cards. I could join Key Ring or Stocard or any of the other apps to lighten the load. Instead, I keep the cards as a reminder in my role as a customer advocate that loyalty should mean more than a piece of plastic floating around the bottom of someone's handbag.
Loyalty programs began as a sales gimmick. As data piled up, retailers began to wonder whether the data was more valuable than the mechanic. Knowing who was buying, what they were buying, and in which channels they were buying yielded information retailers rushed to better understand and monetize in an emerging digital ecosystem. But data alone failed to reveal and recognize customer motivations behind the transactions.
Data means nothing if a retailer doesn't believe loyalty is more than a card. True loyalty considers customer spend and preference for a retailer, and encompasses retailers doing things "for" their customers, not just "to" their customers. The best loyalty programs enable even the largest retailers to transcend a mechanical give-and-take, into recognizing and appreciating customers.
Retailers must prioritize customer engagement above short-term interests.
Too often, data-rich loyalty programs benefit the retailer alone. Many attempt to persuade the customer they are "lucky" to shop with them, with offers designed to drive sales where the retailer needs them. We've all received the "congratulations" offer for something irrelevant when a "thank you" attached to something we cared about would have been more relevant.
Retailers must continually commit to understanding customers' evolving needs through data, and developing new ways to create relevant 1:1 experiences to meet them. Customers have not only changing life stages, but also ever-changing needs (self-expression, control, recognition, etc.) across the stages of purchase (discovery, planning, buying and reflecting).
Retailers should understand how individual customer needs manifest themselves in different ways. It's one reason why the Starbucks mobile app is so successful. Pre-order and pickup solves a customer need for convenience and allows Starbucks to connect with customers in a way a loyalty card and discount cannot. Retailers must ensure solving customer needs, versus sales growth alone, is the predominant goal.
Discounts and coupons alone are not loyalty.
Loyalty begins before a customer walks into a store or visits online. It starts with customers' emotional needs, and can span a broad spectrum from control and self-expression to belonging and care. These innate needs can vary by day, occasion or a myriad of other factors. Coupons and discounts alone can't address them all. That's why retailers need diverse solutions for these ever-changing needs that tap into customers' desire for recognition and dialogue. Rather than pushing offers or content, offering experiential solutions allows customers to engage how and when they desire.
The time to expand the thinking on loyalty is now.
One critical reason to expand the current thinking around loyalty lies in my coin purse with my collection of loyalty cards. I feel no personal loyalty toward those retailers. I use the cards, and it reminds me I have no idea what they do for me. I do, however, know I'm bringing them valuable data along with my trips, and someday soon I'm going to expect something in return. Those who never use my data to recognize and appreciate me will lose me altogether. Customers are already faced with more loyalty programs than they can manage. They will vote with their hearts, giving loyalty to those retailers who reflect who they are by knowing them and meeting their unique needs in a meaningful way.