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7 new strategies brands are using to build customer loyalty

7 new strategies brands are using to build customer loyalty Geoff Smith

In 2014, global e-commerce sales eclipsed the $1 trillion mark. That number is staggering, but what's more interesting is that nearly 35 percent of those purchases occurred on a mobile device -- a 61 percent year-over-year increase. This rapid growth in mobile adoption shows us that the ways consumers interact with companies and, ultimately, buy goods and services, are changing.

While brands are experiencing changes in consumer behavior, the No. 1 goal remains to build long-lasting, loyal customer relationships. Yet, the tactics used to create that loyalty have evolved. As more and more people start buying online and move away from brick-and-mortar locations, engagement and retention initiatives must keep the pace. Luckily, there are many new strategies that help companies provide compelling engagement activities for their customers in a loyalty program.

Surprise and delight customers

One way companies have been ramping up their loyalty marketing strategy is by introducing a tactic aptly called "surprise and delight." By giving customers unexpected prizes or experiences out of the blue, brands can provide a long lasting feeling of excitement and engender positive sentiments. This goodwill can extend to others as well since happy customers are more likely to share their experiences with their social networks and become advocates for the brand.

While surprise and delight is a good strategy for many industries, it has proven particularly effective for companies that lack consistent or direct access to customers such as Consumer Packaged Goods (CPG) or Quick Service Restaurant (QSR) companies. Caribou Coffee, for example, devised a way to stay with customers after the brief transaction through its Caribou Perks surprise reward program, which gives members randomized gifts like free coffee and gift cards for their activity in stores. These surprises help the brand build a positive perception while giving customers unexpected, pleasant experiences that helps build relationships over time.

Leverage customer advocacy and social networks

These days, it's difficult to run a successful loyalty program without leveraging the power of social media and by making customers vocal advocates for brands. By reaching into customers' social networks, companies can strengthen existing relationships while also improving overall brand awareness. Tying a social media element to a consumer engagement program helps brands amplify their messages through word-of- mouth (WOM).

USA Track & Field (USATF) for instance, uses its Facebook page to encourage registration for its own rewards program, USTAF Rewards. The brand then gives points related to any USATF-related social media activity completed by members, which can be redeemed for exclusive merchandise or to attend events. By providing compelling rewards for social interactions, USATF is leveraging the power of its biggest fans to act as digital megaphones for the brand.

Form a partnership

We know that people love having choices. To broaden the reach of their rewards programs, brands are teaming up with partner companies to offer things they never could on their own. By working with partners, brands can tap into each other's respective audiences and help engender loyalty by engaging more customers with more varied and compelling rewards.

For example, Zumiez, a specialty retailer of action sports-related apparel, equipment, and accessories, works with partners to develop its most prized rewards -- limited edition or autographed merchandise, such as skateboards, guitars, and apparel. Through its partner relationships, My Zumiez Stash offers exclusive rewards that loyalty program members can't find elsewhere, broadening the exposure, appeal, and value of the brand and its partners.

Make it personal

Consumers expect brands to give them more personalized offers and services beyond traditional discounts. Yet many brands fail to properly leverage customer data in their loyalty or rewards offerings. To get the most from the additional consumer knowledge gained through loyalty programs, companies must use these data points -- such as demographics, purchase history, product preferences, or reviews -- to offer more meaningful experiences and rewards.

Office Depot is one brand doing a great job customizing its rewards for members. During the sign-up process for Office Depot Rewards, members select one of three membership types: Local Business, Loyal Customers, or Star Teachers, to receive offers customized to those groupings. Members only receive exclusive rewards tailored to their respective group. This approach helps Office Depot segment customers and develop more relevant customer relationships that mutually benefit the brand and program participants.

Build a community

Cultivating loyalty isn't just about developing a physical program. It's also about building a sense of community among fans. The internet, for example, makes it easier than ever to reach niche communities that have particular interests and demographics and bring them together to support a brand. Communities, whether online or offline, also enhance loyalty to help companies create long lasting relationships.

To extend reach and amplify messaging, it's integral to build a community that allows fans to interact with one another and share ideas to improve their experience with a brand and its products.

The king of this tactic might be Harley-Davidson. The company has placed a premium on nurturing not only a strong relationship between itself and its riders, but among the owners themselves. In 1983, the brand founded the first nationwide Harley Owners Group (lovingly called "HOG"), which provides everything from roadside assistance and nationwide riding events to custom riding maps that detail the best routes for biking around the country and special concerts. Harley-Davidson also recently expanded these efforts to specialized owner groups for women, Latinos, African-Americans, and veterans to show that the "Harley Lifestyle" is for everyone. For Harley, the quality of the bikes is important, but the community it supports and fosters is what makes the brand truly iconic and forms an emotional tie to its fans.

Incentivize customer feedback

Gathering customer feedback or reviews on products and experiences is becoming critical for success for any company. After all, it's difficult to determine how participants perceive a program and products unless brands ask. By incentivizing feedback via surveys, interviews, or online polls within a loyalty program, companies not only open a direct line of communication between the customer and their brands, but they can also obtain a more complete picture of their audience, leading to more targeted experiences.

Dunkin' Donuts, for instance, sends members of its DD Perks loyalty program occasional surveys to gauge interest in its program and inquire about ways to improve it. Similarly, LancĂ´me has integrated product review incentives as a key facet of its loyalty program to give customers a voice while discovering new and creative ways to enhance products and customer experiences. Feedback empowers customers and shows that their opinions are meaningful to brands. This reciprocal dynamic is the cornerstone of any long lasting relationship.

Keep things fresh

Loyalty program members often favor variety in the initiatives in which they participate, so it's essential to find new ways to reward customers. Creating additional methods for members to earn rewards, benefits, and points, such as new activities to incentivize action, or different ways to introduce the program to friends, helps keep programs engaging and fresh. Regularly assessing and adding to engagement-based activities can help brands amplify their programs and encourage customers to become regular participants.

Some brand loyalty programs, such as Sony Rewards, work hard to continually offer new options for members to earn points. For example, Sony often makes incentives timely, such as allowing gamers to earn points for buying a PlayStation Plus membership at participating stores upon the release of new consoles. Similarly, TOMS continually changes the specific philanthropic endeavors that loyalty program members can participate in as the brand spreads its mission across the globe and finds new issues to support. By offering new ways to motivate customers and persuade them to interact with brands, companies can move the needle on incremental customer sentiment and earn positive goodwill.

The way that people communicate and establish relationships is constantly changing, and the tactics that businesses use to reach them must evolve to keep up. Customers are taking more control in how they deal with brands, so loyalty tactics must take that into account. By implementing some or all of the strategies outlined above, companies can strengthen customer relationships, drive revenue, and build loyalty long into the future.

Geoff Smith is the SVP of Marketing at CrowdTwist.

On Twitter? Follow iMedia at @iMediaTweet.

Geoff leads the Marketing team at CrowdTwist where he is responsible for developing thought leadership and innovative ROI-focused programs designed to build client and prospective client relationships. He helps the sales team move opportunities...

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