Loyalty programs thrive or die on understanding what customers are looking for, why they come back, and where they will likely go next. Failure to recognise customers’ motives, mindset, needs, and emotions are equivalent to walking blind and expecting to reach your destination successfully. Almost every business or organisation operates in a highly competitive space. Taking the same tactics as everyone else, with generic approaches to customer retention, results in bland brand personalities that neither stand out nor appeal to values and beliefs that consumers hold. Today, relevance is the driving force behind revenue, and data is the pool from which businesses can draw insight to perfect personalised loyalty programs.
There is no shortage of data online or collected by businesses. Almost any online activity, engagement, or touchpoint fills the pot of data, from transactions to comments, reviews, and referrals. This information builds a story, which businesses can leverage to create highly effective personalised loyalty programs.
Why is customer loyalty crucial?
According to KPMG’s The Truth About Customer Loyalty report, 86 percent of brand-loyal customers will recommend that company to family and friends. This is a vital statistic because people who have received a recommendation from a trusted friend or family member are 50% more likely to choose that company when they next need a product or service.
Forty-six percent of loyal consumers say they would stay loyal to a brand following a bad experience and 66 percent are likely to write a positive review following a good experience. Therefore, good and bad reviews are vital in consumer decision-making and present independent verification of your proposition.
So, should you hastily bring your marketing teams to the conference room to plan and implement a points and reward program to increase brand loyalty?
Thirty-seven percent of customers say points and rewards programs increase their loyalty to a brand, which holds true across almost every country. However, customers say a traditional points and rewards program is no longer the most influential component that generates brand loyalty. Instead, they say that the loyalty-building crown now firmly sits on the head of corporate honesty, responsibility, trust, and transparency.
What prompts customer loyalty?
The seven fundamental pillars of brand loyalty are:
- Product quality
- Value for money
- Consistency
- Customer service
- Shopping experience
- Product range
- Price
Unfortunately for businesses, these metrics fall broadly to the same level in each sector. Where this is true, marketing, retention, and acquisition can only be influenced through personalisation and establishing an emotional connection.
Personalised loyalty programs
Personalisation within loyalty programs should focus on where the heart lies, and this differs by generation.
60% of millennials would rather give their loyalty rewards to a good cause. However, only four in ten baby boomers feel the same way.
Aligning rewards to charities and good causes close to millennials’ hearts would be a practical and strategic move. For baby boomers, exclusive experiences and unexpected offers reign superior. Millennials and Generation Z are more likely to engage with loyalty programs that focus on sustainability, innovation, and transparency.
Once engaged, the customer is more likely to make positive online reviews, word of mouth recommendations, and social media posts. Furthermore, eight out of ten millennials and 66% of baby boomers confirm spending more with businesses where they are members of a loyalty scheme.
75% of consumers would switch brands for a superior loyalty program, making them an effective retention and new customer acquisition tool.
The future of marketing to target customer segments
Conscious consumerism is clearly showing signs of dominance over attractive pricing and high-quality products or services. Alignment of beliefs and values, providing greater depths of information, transparency, and honesty are the future of B2C marketing.
To raise brand loyalty through personalised loyalty programs, businesses and organisations should:
- Identify the value propositions most important to customers
- Use value propositions to create strategic incentives and an ecosystem of value
- Target the loyalty drivers for each customer segment and demographic
- Remove barriers from loyalty program registration and improve ease of use
- Raise awareness and clarify their purpose
For a free consultation about loyalty marketing for your insurance company, Jamie Fisher (Commercial Commercial Officer – The Super Marketing Group) can offer advice and options – please click here.
