Bond EMEA
Loyalty beyond financials
Loyalty programmes have a positive impact on a company's bottom line by improving customer loyalty, increasing customer lifetime value and providing valuable information for decision making.
Attracting customers to become members of a programme is the easy part. However, without the right approach, the initial enthusiasm quickly fades and members soon forget about the programme or stop using it. The challenge of keeping customers active and engaged with the loyalty programme involves companies continually evaluating and renewing the benefits offered. The solution may seem easy: "Let's give more discounts" or "Let's improve the earn-and-burn mechanics", but this financial approach implies high costs for companies.
Is the financial element the only aspect that matters to members of loyalty programmes?
This is one of the questions we answer in The Bond Loyalty Report, a global study we have been conducting at Bond Brand Loyalty for over a decade. In it we analyse perceptions of the performance of loyalty and credit card programmes, looking at both attitudes and behaviours of more than 60K customers.
One of the main components of our study is the "rDriver Model", a framework that allows us to understand how to drive loyalty to loyalty programmes based on a number of drivers that we put together in seven categories. The main finding of this analysis is that all categories have the same impact, so working exclusively on financial is not the only solution.
Some of the elements that customers value and that companies can also focus on are:
- 'Know me', a category related to personalisation and about showing the customer how much we know them in every interaction they have with the company. While 72% of European consumers expect the companies they buy from to recognise them as individuals and know their interests, only 56% of loyalty programme owners report using some kind of personalised reward or offer. In this category, Restaurant Brands International (RBI), which owns Burger King and Tim Hortons, stands out because it is integrating QR codes for its customers to scan, pay and earn loyalty points. This drives the adoption of digital apps and loyalty programmes, while collecting data on customer preferences.
- 'Learning'. It is about the customer understanding and being truly informed about how to maximise the benefits of their membership. Good product education helps get new and existing members to adopt key features more quickly, which helps retention and promotion of programmes. Zalando excels in this category as it relies on communication to educate its customers about exclusive sales of high-demand products. Customers register for an invitation to purchase launch products at a specific time slot, without the time pressure traditionally associated with these events.
- 'Communication'. This is about programme members receiving communications that are relevant and timely for them, based on the stage, lifecycle and action we want to drive in customers. This approach is crucial to keep them engaged and active in programmes from the moment they join, through their membership journey and as they decrease their interaction, before they become inactive. An example of effective communication is Panera Bread (US company), as it allows ordering products with its mobile app and has implemented reminder notifications for customers to complete their purchase based on the expected date and time of pick-up or delivery.
As we can see, there are a number of mechanisms that companies can introduce to improve loyalty to their loyalty programmes. The best practices we have just shared can inspire you to upgrade your loyalty programme, whatever your industry, with a focus on the customer and their experience as a member.
So, we suggest you think outside the financial box the next time you are faced with redesigning a loyalty programme.
If you would like to know more about The Bond Loyalty Report, or would like to subscribe to our Market Intel trends report to find out what other companies are doing in loyalty, CX or CRM, you can contact us at information@bondbl.com