Renew loyalty customer program: Towards emotional experiences

Renew loyalty customer program: Towards emotional experiences

The digital revolution is changing the way that companies sell goods and how customers buy products. Accordingly, customer loyalty programs are seeking the methods to innovate and make a difference.

The old ways of offering promotions, paper of elctronic discount coupons, ean reward points are becoming “daily” and no long longer meet demands of customers. They are busy but they are very knowledgeable about products and technology, so the old methods are difficult to strengthen customer loyalty.

However, that don’t lose the importance of a strong customer loyalty program. According to a study conducted by IRI Worldwide, in 2017, up to 74% customers chose a store because of discount program or attractive customer program. This rate is 79% for Y generation customers (also called “millennium customers”, 25-35 years old).

Building a loyalty program is quite expensive so not all businesses can do it. In the JWT Intelligence report, Bryan Roberts, customer research director of TTC Global, a loyalty-based marketing company, writes that “especially when profit rate is too thin, I think retailers tent to find ways to reduce the cost of reward programs for shoppers”. According to Roberts, in the picture, the orientation for companies is to pursue customer loyalty based on emotion, not from each transaction.

Roberts said: When asked what factors motivate the formation of emotional loyalty, customers say two main factors: (1) Experience inside the store: the friendliness and beauty that customers feel when shopping (2) Retailer’s interest: not only caring for customers as individual but also about health and safety for both staffs and business merchains. Roberts thinks that the smartest brands are tented to build customer loyalty by emotion and succeed because of implementing it creatively according to the following trends.

Replace membership card with mobile application

Insteaf of using loyalty cards or membership cards as before, interprises are turning customers into “virtual” members online or mobile application. Martin Lewis, fourder of Money Saving Expert website said in January: “It is an idea of using a plastic card to record reward points for customers, thereby redeeming them into discount coupons. But now, this method is gradually disappearing”.

Starbucks is a classic example. Customers of Starbucks can use the mobile application to order, pay and enven enjoy popular music. With My Starbucks Rewards program, the members can accumuplate stars into prizes and use the prizes at any time. This application helps Starbucks strengthen its image as a brand that enriches the customer experience. According to Starbucks data, the company’s Mobile Order and pay application currently accounts for 11% of all transactions in the USA market. In Europe, Yoto mobile wallet is incorporating online payment transactions with automatic earning points programs and electronic bill payments. This application can offer personalized document based on location information and readiness to connect other companies to enrich the functionality of their mobile apps.

Creat privilleges for members

Is there a loyalty program better than a program which customers are willing to pay to become members? It is the case of Amazon’s Prime with more than 80 million global members. Customers need to spend about 100 million per year to receive 2 delivery days, broadcast Prime Video live images and access free Prime Books library. When the customer spends money to “invest” to become a member, they will tend to buy more or use the services to have the feeling that they are getting the most value. Amazon also runs the similar loyalty program for corporate customers with Prime for B2B name.

Bed Bath and Beyond, a furniture and houseware brand, is also testing a VIP loyalty program with membership fee of $ 29 per year. Steven Temares, the company’s general manager, spoke at a 2016 event: “The discount coupon program has been associated with us but we are really working hard to better understand our marketing and make them more personal reducing dependence on loyalty building strategies.

Create unique experiences

According to a study conducted by Eventbrite in 2017, 75% “millenium” customers said they put experience on top priority when deciding to buy a particular brand regularly. Marketing experts advise enterprises, especially travel and lifestyle field, should segment customers by a life perspective rather than by demographic charateristics. For example, in 2017 Marriott brings customers a vivid experience at the Coachella music festival in Palm Springs, California. Members of loyalty program can use the accumulated reward points to get a chance to sleep at one of eight luxury tents bringing safari style. One of these huts is initiated by Moxy, a brand aimed at Marriott’s generation Y customers. Vicki Poulos, senior brand manager for Moxy hotel chain, said the brand’s goal is to “create fun experiences directly to customers”.