Adam Whatling 21 April 2017

Categories B2B, B2C, Customer Experience

Driving Customer Loyalty – The Final Piece in the Puzzle for Digital Marketers

The UK promotional marketing industry is worth more than £50 billion, yet much of this spend remains focused on discounting. Too little is spent on developing deep brand loyalty and transforming consumers into brand advocates.

Loyalty schemes tempt more shoppers, more frequently than price offers aimed at getting them to switch to a different brand, according to the fast.MAP Marketing-GAP report¹. These schemes need not be expensive but they should have a major part to play in driving both online sales and real-world footfall. 

Here are three tips for using loyalty rewards to drive bottom-line returns:

1. Segment your customer base with sophistication. Generic personas and sweeping demographic assumptions never worked well for sales and marketing and they do not work when it comes to rewarding customers and creating brand advocates. Good data is key to getting this right. Supplement customer lifetime value data with other metrics such as the number of recommendations a customer has made, or the number and value of individual purchases. Design incremental, tiered reward schemes that have the specific aim of moving customers up the different value chains, whether rewarding them for recommendations to friends and family or making a purchase of higher value from a different family of products.
2. Provide a variety of rewards for customers to choose from. Even with the best demographic data to hand it is not always possible to be completely accurate when defining what rewards customers will respond to. To address this, offer a variety of rewards so that people can pick and choose what works for them. This might include multi-retailer gift cards that allow the recipient to spend them at the retailer of their choice, or their electronic equivalent for ease of distribution.
3. Make reward schemes fun and interactive. Gamified reward platforms that present customers with challenges and rewards for reaching the next step are not just for millennial gamers. These also tap into the well documented ‘local ladder effect’ – that is the human desire to increase social standing relative to others. If customers know how they are doing in achieving rewards relative to others that may drive them to make that extra purchase from you, consolidating the relationship still further. Introduce a ‘wow factor’. Ways of doing this range from making an unexpected customer care telephone call through to offering rewards with a perceived high value that are aligned to the business. For instance, media companies might offer free mobile devices with a subscription, or a customer service representative at a retailer might make a quick phone call advising of a reward to a customer who has made a negative comment on social media.

The right rewards represent the final piece in the marketing puzzle. Having first attracted a customer to the business, then persuaded them to purchase from you, it is vital to not only retain that person as a repeat customer but also to transform him or her into an advocate for your business, recommending your products and services to others. That way, a relatively low cost investment in rewarding individual customers can produce a long tail of dividends.

¹ ‘fast.MAP Marketing Gap’. http://www.fastmap.com/allreports/marketing_gap_report_2014.pdf