It is well known, a loyal customer is more profitable and spends more, but too often marketers think of loyalty as a program rather than an outcome. While traditional loyalty programs have their place, marketers should first start with developing a Customer Engagement Strategy. A Customer Engagement Strategy should focus on value generation, not revenue extraction and encourage your customers to participate in activities you design for them.
Every brand connects with their customers in unique ways. It’s important to understand the current relationship when defining a Customer Engagement Strategy. Here are a few approaches to consider beyond a points program to foster loyalty:
- Interact with your customers outside of a purchase. Programs that only reward a customer when they spend money can feel insincere. Outside of shopping experiences, offer opportunities to earn rewards through contests, games or activities that communicate a positive brand perception – such as reviews, testimonials or social posts and videos.
- Plan for things to go wrong and be prepared to act quickly. Your most loyal customers will understand that mistakes happen. How you handle those mistakes may cause a customer to lose faith or may strengthen their loyalty. Having a strong appeasement program that allows you to act quickly and provide the right amount of value back to the customer is key.
- Connect your brand with a cause that matters to your customers. According to a recent study, 92% of consumers say they have a more positive image of a company when it supports a social or environmental issue. Giving a customer the chance to connect with a cause by allowing their brand interactions to increase contribution amounts or be targeted toward their own community can make a lasting impact.
The ultimate measure of a customer’s loyalty is not the number of points they have earned, the amount they have spent or the number of interactions you have had with them. Real value is created when customers are willing to refer your brand to their friends, family and social networks. Their willingness to advocate for your brand is a true measure of their loyalty.
Todd Carter is the Chief Digital Officer at YA. He works with clients everyday to design customer engagement strategies.