Top 25 Loyalty Tips: What We’ve Learned After 25 Years in Loyalty

Jan 9, 2015

LOYALTY TIPS AND TRICKS copyIn celebration of our 25th anniversary, Kobie has put together a list of 25 loyalty tips and tricks we’ve learned over the years. Some of our advice is timeless, while others are part of the current landscape. We hope you find some nuggets of wisdom here to apply to your loyalty strategy.


    1. Treat loyalty as an enterprise-wide effort. Successful loyalty programs are viewed as a company priority, not as a side project competing for resources. Because loyalty can require a significant investment of energy and resources, company-wide buy in is critical to success.


    1. Make it easy for people to communicate with your brand on their preferred channel, in their preferred way. Successful loyalty programs tailor messages to a member’s preferred communication channels. They also leverage touch points across the customer journey coupled with the customer’s profile to tailor the customer experience.


    1. Leverage digital channels to deepen the connection and drive real-world actions. This doesn’t just mean emailing coupons and special offers in hopes someone will make a purchase. Aside from sending promotions, online channels should be used to stay top of mind by telling the brand story and keeping a dialogue going with the customer.


    1. Truly build a relationship; loyalty is more than shelling out perks and discounts. One of the keys to generating long-term loyalty is making program members feel special. Let them know their business matters in terms of a genuine connection between two parties that benefit from the relationship.


    1. Use tiers to segment and incentivize members. Airlines have long used a tier system, and many other verticals are following suit since a tiered approach helps motivate members. A tiered program can elicit positive behavior by offering status-based and tangible rewards exclusive to customers in a particular tier. Plus, these customers can be segmented and communicated with in an appropriate way based on their affinity toward the brand.


    1. Engaging customers doesn’t mean convincing them to give up their bottom dollar. Focus on providing an experience that makes customers more likely to spend their money at your business versus somewhere else.


    1. Speak to customers based on their relationship with your brand. Your most loyal customers are receptive to hearing from you and are closer to your brand.  You should speak to them differently and perhaps more frequently than a new or potential member — just as you would speak to a close friend differently than an acquaintance.


    1. Capture detailed customer preferences to improve targeting. By evaluating transactional data from the loyalty program, you can segment users for offers and promotions tailored to their preferences, thus encouraging more profitable behaviors. Demographic data is vital to this as well. For example, the loyalty motivations of a 30 year old can be vastly different from that of someone in their 60s.


    1. True personalization is giving your members content that is relevant to their interests and needs. Use your customers’ transactional and demographic data to personalize your communications, and focus on their program preferences to talk to them when and where they want to be contacted.


    1. Tailor incentives to the individual, not the group. Rewards should be based on member preferences and emotional drivers. The key here is giving the customer what they consider valuable, which does not necessarily mean currency-based rewards, like points.


    1. Don’t make it impossible to be rewarded.  If it’s too difficult or costly to reach the threshold for a reward, you risk disenfranchising your members. Strike a balance that requires the member to put forth some effort and/or spend, but is still achievable.


    1. Look out for the customer’s best interest. Many brands think of how they can make the customer their advocate, but in a truly reciprocal relationship this should go both ways. In a customer advocacy mind set, you view every interaction as an opportunity to learn more about what the customer wants and use those insights to better serve them. Make your customers feel special by delivering on those wants, whether that means access to exclusive content or events, free trials, important news, etc.


    1. Don’t write off a fee-based loyalty program. Charging a membership fee can be a powerful motivator used to attract and deepen relationships with members. Keep in mind fee-based programs will see an immediate ROI but have less growth potential, while free programs take time to build and have the potential to attract more members.


    1. Consider gamifying the loyalty experience to drive more engagement. Incorporating game-like elements into loyalty programs in the form of badges, leader boards or achievement levels will allow members to earn smaller rewards when they’re between tiers. Gamification also increases social interaction between members, fostering a collective experience where everyone can feel rewarded.


    1. Every employee – from the top to the bottom – should play a role in driving a strong customer experience. Whether they realize it or not, each employee has a chance to shape the perception of your brand, and they must to be trained and incentivized to do so.


    1. Empower employees to deliver on the omnichannel experience. Provide your staff with easy-to-access, pertinent program information, performance incentives and train them on how/when to engage customers and program managers.


    1. Arm frontline staff with customer information. If on-the-ground employees have access to customer profiles while they are interacting with a customer, they can provide a more personalized customer experience. Consider how useful on-demand customer information could be for frontline employees within the hospitality, banking, and retail sectors.


    1. Deliver a strong value prop for joining your program. Make it clear what’s “in it” for the customer and communicate this at every touch point. Don’t make it complicated.  Simplify the rules and earning structure as much as possible to ensure that every employee is able to articulate the value proposition of your program.


    1. Break down internal data siloes to create a 360-degree view of customers. Having data scattered across so many areas of the organization can make it impossible to properly analyze and drive customer insights. The key is to combine as much customer data as possible with your existing CRM system to maximize the customer experience and drive incremental behaviors. Consolidating all of this data into one centralized location may be time consuming and costly, but the long-term benefit will be a more accurate and all-encompassing view of the customer.


    1. Pool data among partners. Partnerships with companies in other verticals – such as retail and entertainment – can be formed, allowing further access to high volumes of customer data and business insights. Think of how much more effective your loyalty program could be if diverse datasets were combined.


    1. Combine offline and online communication for potential upsells. Mobile marketing can be leveraged for upselling already loyal customers. For example, SMS and push notifications can be used to drive members toward additional purchases while they’re at or near your location.


    1. But be wary of invasive communication tactics; always be conscientious of customer privacy. Smartphones are particularly powerful tools for capturing customer profiles, spending data and engagement. However, it’s critical to make sure customers have an easy way to set communication preferences and opt out if desired.


    1. Aim to incentivize the customer to engage in a new way or more frequently. Don’t just reward them for repeating a behavior they’d already do. For example, gamification typically offers badges and rewards for behaviors a loyal customer would probably do regardless of incentivization.


    1. Set up benchmarks to help gauge success. Identify performance metrics and align them across teams, give dashboard access to teams and meet often to assess operational challenges and ways to drive innovation in the overall customer experience.


    1. Treat loyalty as a journey, not a destination. A good loyalty program will constantly evolve and require organizational patience. The best programs are those that grow with its members’ wants and needs as well as trends in the marketplace. Expect that your program will never truly be “finished,” but rather in a state of continual improvement.