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Every quality relationship is built on trust. And it doesn't matter whether we're talking about our relationship with another person or something seemingly less life-critical, like a brand. It doesn't even have to be our favorite, although positive emotions play a significant role in sustaining lasting relationships.
Loyalty stems from trust, devotion - feel free to use the word that feels more natural to you. Think about it: would you ever stick with someone if you didn't feel you could trust them and that the relationship would benefit both sides?
Experiences lie between trust and loyalty. Every experience that generates a sense of satisfaction and is repeated regularly creates an emotional connection. And that connection is your ticket to success.
So, it's all about psychology. Do you want customers to be loyal, to keep coming back to your brand and choosing it over others every time? All you need to do is follow the path described above. (Any resemblance to classic media headlines is intentional.)
Focus on Existing Customers
When it comes to customer loyalty, it's much simpler and cheaper to focus on those who have already interacted with your brand than to put effort into acquiring new ones.
The point is to reward those who are with you. But to do that in an adequate and effective way, it's important to truly get to know them. This doesn't just mean personal data like names or birthdates; it also means understanding their interests, needs, habits, and shopping philosophies - whether they buy online or offline, how often they buy, what they buy, what happens after purchase, and so on. Only this way can you manage your business to achieve the desired results in the long run.
Satisfaction is Key
Customers are loyal when they are satisfied with the product or service, when their user experience is excellent. They value quality, view the brand's identity through the lens of their own identity, and connect with it based on goals and values. When they feel that the brand respects their needs, when they feel valued and seen on a human level rather than just as a target, they won't leave. Moreover, a satisfied customer will gladly share their positive experience with others, and the potential of such word-of-mouth marketing is simply immeasurable.
However, there's a significant difference between consumer loyalty and consumer habits, and you can easily test this by changing the price of your product or service. Customers loyal to the brand itself won't have a problem paying more for what suits them, regardless of what the competition offers. Customers who don't care which brand they buy from, as they don't identify with any, will readily go for a better offer without hesitation. In the long run, no one profits from those who chronically switch brands they interact with.
Therefore, the goal of building loyalty should be sustainability and a lasting change in consumer habits, and it's believed that this can be achieved through building shared values.
Purpose of Loyalty Programs
Expecting a customer to remain loyal forever might be a bit utopian. Yes, your relationship is based on something fundamentally unbuyable, but even in that case, a small gesture of appreciation and recognition won't push anyone away. Loyalty programs exist to show brands' customers that they appreciate their loyalty, but before you announce another discount, try to think more strategically.
Research has shown that 77% of customers stay with a brand that has a good loyalty program, and 70% of them would recommend it to others. Even 63% of customers are willing to modify their consumer habits to get the most out of the loyalty program they belong to. But what makes a good loyalty program?
The question to ask isn't broad, like "what do your customers need," because all those things they need can be found anywhere and in different places. The question to ask is which of their needs your brand can fulfill so that they are satisfied while you profit. So, it's a win-win situation for both sides.
Why Loyalty Programs Fail
Achieving what was mentioned above isn't that easy - the challenge is to create a program that will understand users' needs and desires correctly and enable their fulfillment.
On the other hand, the brand must also consider its goals - loyalty programs can often be a significant expense without bringing relevant results. For example, the discount you currently provide may attract both old and new customers, but it doesn't guarantee that they will return or come more often after that action. And this is another confirmation that, in that sense, your plan should be long-term.
Not all customers are the same. This is why loyalty programs exist - to differentiate between those who are loyal and those who are only there when it suits them. The truth is that it's easier for smaller brands to identify important customers since the circle is smaller and the relationship with them is more personalized. This leads us to perhaps the biggest challenge loyalty programs face and why they often fail - lack of personalization.
It's already been mentioned that each of us wants to be seen and recognized as a real person, not just one of the numbers in a marketing target group. Customers need to feel important to the brand; they need to feel that the brand recognizes that, and that's why it wants to reward them with benefits that no one else has. So, it's important to get to know those you're communicating with, and it's important to conduct that communication strategically and humanely.
Technology Assistance - A Friend's Help
Besides personalized experiences and exclusive benefits, the ease of implementing loyalty programs for brands and the ease of consumer participation are crucial for success. And we're more than interested in avoiding any kind of complications!
How do we achieve this? Simply put - the solution is in technology. And when we say "technology," we mean artificial intelligence.
The application of artificial intelligence is expanding every day, and the reason for that is its undeniable power to improve almost every aspect of our business. And yes, it can definitely be used to enhance loyalty programs as well.
The marketing agency Smartpoint has developed SmartPromo, an innovative loyalty platform based on artificial intelligence that offers a complete solution for the successful implementation of every segment of a loyalty campaign. In this way, the goal we aim for (better results and customer satisfaction, participants in the campaign) is guaranteed.
SmartPromo is quickly implemented, saving time and simplifying the process of running programs, while users themselves will be thrilled with the ease of use. The campaign itself can be adjusted and corrected at any time, and the results can be tracked in real-time.
Remember the story about trust? Perhaps the biggest advantage of the SmartPromo platform is its aim to make loyalty programs as fair as possible - thanks to an advanced algorithm for extracting information from images, including scanning receipts and detecting potential fraud, equal chances for all participants to win their rewards are ensured.
The selection of winners is quick, unbiased, and precise. With no room for the slightest mistake in the entire process, consumers will trust not only your loyalty program but also your brand more.
Loyalty as an Imperative
Today's market is highly competitive, and in the constant battle for development and success, having someone on your side is important not only in good times but also in challenging ones. In fact, it might be crucial then.
A brand cannot exist without customers. Loyal customers. But to be that, they must have a reason to give their trust to you specifically. Make sure that reason is a good one.
Source: InStore Magazine
