The loyalty world continues to grow and morph through program evolution. Starbucks is a perfect example of this, changing their program three times since 2016! The challenge loyalty marketers face is balancing choice and control, so members feel a sense of satisfaction while the business benefits from long-term success.
The magic (or solution) comes together when we, as marketers, masterfully do three things: collect personal data to create a more personalized experience, provide the member with more choices that represent what they want from the brand, and lastly align the loyalty program with the company, rather than treating them as separate entities.
STEP 1: COLLECT PERSONAL DATA
Loyalty programs give brands an excuse to ask for more personal information and customer data. In turn, this helps the brand personalize content, promotions and the overall user experience. Marketers can then leverage loyalty programs and the data derived from them as the source- of-truth to drive a meaningful customer experience that builds not only on transactions, but also interactions and emotions. Think of it like this: the more loyal a customer is, the more data a brand will have, the more personalized experience the customer will receive, regardless of the channel.
Some marketers, however, are still focusing their strategy on short-term conversations and revenue growth, instead of shifting their focus to customer success and building sustainable ROI through personalized, relevant communication and experiences. Brands should take note from those who are doing it well. Take CVS ExtraCare for example — emails are personalized with new product recommendations based on customer data, options to send coupons to email or app are available to better personalize the experience and the ability to opt in for additional benefits is available for those members who know what type of rewards they want.
STEP 2: PROVIDE MEMBERS WITH MORE CHOICE
The next key point is to provide the member with more choices that represent what they want from the brand. Marketers frequently try to over personalize customer experiences, and they end up taking the member’s choice out of the equation. The key to providing more choice is solving for a problem that the consumer didn’t even realize they had. In doing so, consumers remain loyal to brands through a sense of reciprocity and emotional connection.
Utilizing this principle, 7-Eleven launched 7Rewards in 2015 with a limited value proposition: for every six beverages purchased, members receive the seventh free. To participate, members needed to download the 7-Eleven app.
The program evolved in 2017 to include a point-earning component. Members earned 25 points for every dollar spent. Points could be redeemed for food and drinks. The new structure was an improvement that rewarded more holistic behavior, giving members more choice in their rewards.
In 2018, 7Rewards changed the earn ratio to 10 points per dollar spent. They published a reward schedule that gave members more choice in what rewards they could receive and allowed them to determine when they wanted to redeem points based on the four published reward levels.
STEP 3: ALIGN THE LOYALTY PROGRAM WITH THE COMPANY
At the end of the day, customers are loyal to brands who go beyond price or convenience to form an emotional connection. Discounts won’t cut it; it’s about taking your loyalty strategies to the next level, aligning business objectives with loyalty objectives, and working as one entity.
Take American Eagle Outfitters. In 2018, when they launched AEO Connected, the business created one program, with two brands and the united objective to integrate enterprise wide. While members were earning points per dollar spent, the new program also allowed members to redeem for free jeans (aligned with the AEO brand) or free bras (aligned with the Aerie brand). This added redemption choice for the member, made it easier for the associates to sell the program and more enticing for the members to engage. The program also rewarded beyond each transaction, providing points for completing profile information, providing product reviews and sharing outfits on social media. With the experience going beyond the initial monetary interaction and boosting anchor product purchases and redemptions, AEO successfully merged business objectives with loyalty objectives.
So there is the magic that marketers possess, to balance choice and control, allowing members to feel a sense of satisfaction while the business benefits from long-term success. The brands who are willing to go the extra mile to emotionally connect with consumers can deliver memorable experiences that keep their customers coming back. Take note fellow marketers — positive and personalized differentiation can go a long way in creating a long-lasting relationship.