In this world of price transparency and competition, why should consumers choose your brand? They can easily pick up their phones and find the lowest price for sirloin steak, a car or a vacation. Yet, some customers will consistently choose the same airline, hotel, or retailer even when their preferred provider doesn’t have the lowest price.
Is this because of the loyalty program? The majority of loyalty programs today rely on a set-it-and-forget-it formula of, “Earn points as you spend and get something free after you earn enough points.” Some marketers refer to loyalty programs as bribes because these are the most familiar and common programs in market. Sometimes these incentives aren’t enough to offset the higher cost of buying from the preferred brand, which implies that there must be something else going on. Consumers who belong to a brand’s loyalty program tend to be higher spenders, churn less often, and have higher net promoter scores than non-members. Even if there is self-selection going on, why are they self-selecting and engaging with one program vs. another with similar benefits?
It’s easy to say that this would be considered emotional loyalty. The problem is, “What exactly IS emotional loyalty?” It feels like something that sounds simple and that you should already know, right?
When you look at research from within the loyalty industry, one study of 28,000 consumers found the answer to be: “Meet their Needs.”1 That is eloquent in simplicity, but not terribly specific. How does the marketer make that actionable? What are the needs?
We knew we had to dig deeper. We read numerous academic articles on building consumer loyalty. We focused on three motivations that academics have identified as drivers of emotional loyalty: Status, Habit and Reciprocity. According to our research, you’ll begin to know what motivates their emotional loyalty to a brand if you hear them say:
Status I feel more valued than other customers.
Habit I often find myself on autopilot buying what I’ve bought before.
Reciprocity I feel grateful for treatment I’ve received from this company.
The more consumers endorsed statements similar to those above, the more likely they were to say that they:
- Felt an emotional connection to a brand because of a loyalty program.
- Had purchased from a brand even when that brand didn’t have the lowest price.
- Told people that they are a member of their favorite loyalty program.
We even had some consumers motivated by reciprocity who said there are companies they buy from in order to help make sure the company stays around! In fact, Southwest Airlines was one of those companies.
Here is where it gets interesting. We promised to make this research actionable.
Benefits and positioning can address your customers’ needs when you match them to their emotional motivations. In some cases, the positioning and how you frame your conversations with your customers is as important as the benefit itself. The research found that you could have the same benefit – early access to new merchandise – and the person motivated by status will say it makes them feel more special than other customers while the person motivated by reciprocity will feel grateful. The person motivated by habit will be loyal because of early access, only if it makes their life easier and doesn’t require them to do anything unfamiliar. The same benefit may appeal to all, but if your customers are motivated by habit, you need to talk about your early access benefit differently than you would if they are motivated by status.
Understanding the type of emotional loyalty motivation for a group of consumers turns out to be very useful for explaining what we’ve observed in the market about strategies that worked …or didn’t.
For example, some of our consultants worked with a hotel chain that had been considering the usual elite strategies – gold cards and exclusivity positioning. However, their internal research indicated that exclusivity benefits and elite positioning didn’t resonate – their customers were asking for ease of use and flexibility, so the new program benefits were designed and positioned accordingly. Now that Kobie has researched emotional loyalty scoring, it is very clear what was going on – their customers are motivated by habit whereas the hotel chain they initially modeled their program on has customers that are motivated by status. In fact, we were able to score members who belonged to each hotel program and found that, indeed, members for the brand who redesigned their program for ease of use were motivated by habit while members for the other brand were motivated by status.
The punchline? The brand who relaunched went from zero to hero. Now that this hotel has positioned their program as easy and flexible, they are winning hearts in the market as evidenced by membership growth and even readers’ choice awards. Understanding what motivates your customers pays off and Kobie’s Emotional Loyalty Scoring research will guide that process.
Research referenced: Full reference bibliography attached separately
- “The Battle for Love and Loyalty: The Loyalty Report 2017,” Bond Brand Loyalty with Visa, (2017)