Disrupting the Loyalty Program

Brands are raising the bar on customer loyalty with authentic experiences, data-driven strategies, and more.
Customer Experience

Customers are the lifeblood of business, but winning customers is only half the battle. Keeping customers engaged and retaining their business is just as critical. However, offering a loyalty program is not enough. Consumers have a plethora of loyalty programs to choose from. The average American household holds memberships in 29 loyalty programs but is active in just 12 of them, according to research firm Colloquy.

Merchants must give people a reason to remain loyal to their brands-or risk losing the customers they worked hard to gain. Delivering an authentic brand experience, understanding and meeting your customers' needs, as well as making it easy for customers to interact with your brand are some of the critical factors for building customer loyalty, say industry experts. Here are examples of brands that are taking these lessons to heart.

Keeping your Brand Promise
Companies don't just sell products or services anymore. Product features and services are quickly duplicated by competitors-often at lower prices-making it difficult for brands to compete on this level alone.

The most successful brands differentiate themselves through authentic experiences, observes Ray Wang, principal analyst and founder of Constellation Research. "We're moving from selling products to selling brand experiences," Wang says. But companies must do more than tell a simple brand story. "Every touchpoint must reflect the authenticity of the brand's promise," he adds. As an example, Wang points to Disney, a company that has perfected the branded experience. Visitors know that they can expect a family friendly experience that is reflected by the company's highly trained employees and branded merchandise.

Retaining customers is about providing an experience that customers can trust, agrees John Vance, senior manager in West Monroe Partners' customer experience practice. "Ultimately it comes down to providing an effortless experience, and providing a trusted environment so consumers can transact knowing they are getting the deals they need and the experiences they desire," Vance says. "It's the same whether that is best price for a commodity product, excellent post-sales service to de-risk gift buying, or providing personalized engagement-a wowed customer, one who feels that she's experienced something extraordinary, and without any effort, will always come back for more, and advocate on your behalf."

For The Greene Turtle, a sports bar and grille, maintaining an authentic brand experience is critical. Founded in 1976 in Ocean City, MD., The Greene Turtle consists of more than 40 restaurants across the mid-Atlantic region including Maryland, Delaware, Virginia, and the District of Columbia.

The Greene Turtle is more than a sports bar and grille, says Marketing Director Nick Kegg, it's a community hangout. "Sports and the community are a huge part of how we operate and who we are," Kegg maintains. "A lot of managers coach local teams and we try to stay active in the community."

The company offers a rewards program, but wanted to make its program more engaging. In October 2014, The Greene Turtle selected loyalty software provider Paytronix's open API to embed a mobile gaming platform created by Gamescape into its rewards program application.

The platform lets guests play games in The Greene Turtle's app, such as predicting game outcomes, like who will gain the most yards in a football game or win the coin toss. If they get a certain number of correct answers, they win a $10 reward for food or drinks at the restaurant. Users can also build their own fantasy sports teams and compete with other patrons.

The Greene Turtle communicates with its guests about earned rewards and upcoming sports games through push messages and emails. Since launching the mobile games, the company sees about 1,000 unique users playing per week and guests who play the games visit the restaurant locations more frequently and spend 58 percent more than guests who don't use the app.

The games are successful because they contribute to a sense of community among the restaurant's patrons and offer a relevant way for loyalty members to stay connected, Kegg observes. "What I find exciting is not only are people playing [the app games], they're coming back and playing again," he says. "People are watching the games together at our restaurants and engaging with the app even after they leave. We're creating loyalty and a great experience for our members outside of the restaurant as well as inside."

A mobile app is a great way to engage customers but it must offer experiences that are organic to the brand, points out Stephanie Trunzo, COO and CDO at PointSource, a mobile app developer. "A generic mobile site or app that doesn't integrate into your overall brand strategy will fail," she notes. "Also, remember that you're having an intimate conversation with people on mobile devices and it shouldn't feel intrusive."

When contacting people on an app, Trunzo continues, brands should create a notification strategy that includes geolocation data, time of day, customer profiles, and other data points to build a contextually relevant experience. It's also important to let users control their experience. Allow users to select the types of notifications they want to receive and explain why you're asking for information. "You're asking people for space on their phones and so it's important to earn their trust," Trunzo explains. "Clearly explain the value of the app-maybe it's to receive early notifications of sales or points-and why you need information from users for the app."

Relying on Smart Data
It's no longer a question of whether companies have enough data about their customers; what matters is how they use the data. Data has become a "competitive weapon" that can give business owners an advantage over their competitors, Constellation Research's Wang notes. "It's not about omnichannel, multichannel, or those other buzzwords," he says. "It's about delivering a continuity of experience and giving customers what they want in a way that's better and faster than your competitors."

Value City Furniture relies on customer intelligence and personalized campaigns to target shoppers who haven't made a purchase yet and promote customer loyalty. "Loyalty is different in the furniture business," notes Steven Haffer, CIO and EVP of omnichannel customer engagement for American Signature, the parent company of Value City Furniture. "You may be in the market for a sofa, but after you bought it, you disappear. So we find that we build loyalty by solving the customers' problems leading up to the purchase instead of just trying to win them back with discounts."

Furniture shoppers often spend weeks researching and comparing products before making a purchase. Value City Furniture tries to make the research process easier for shoppers by making targeted recommendations.

The first thing a visitor sees on Value City Furniture's website is a box inviting users to submit their email addresses to receive information about new arrivals, offers, and tips, and style updates. With the help of predictive analytics platform SmarterHQ, Value City Furniture uses tags on its website to track and segment the behavior of visitors.

For example, if a visitor clicked on a number of couches and shared an email address, the site will take that behavior into account and include recommendations for couches in an email, along with other items that people have purchased with the couches. The site also offers specialists who can answer questions via chat. Within 45 days of using the SmarterHQ platform, the furniture company saw a 190 percent increase in revenue from its emails.

However, predicting the shopper's next purchase after a certain point becomes difficult, Haffer notes. "People may buy a few smaller items in addition to the big ticket purchase, but it's very difficult to predict that just because you bought a living room set, you'll buy a master bedroom set next," he says. "What we do know is the consumer will remember you if you give them a differentiating experience."

The customer experience goes "beyond the transactional relationship," Haffer adds. "If you're relevant and simplify the experience, you're more likely to win that customer's loyalty and their advocacy."