Scoping the Loyalty Landscape for 2015 and Beyond

As brands fine-tune their customer strategies to accommodate current trends, marketers must also nurture loyalty in ways that support both the consumer journey and their ultimate destination.
Customer Experience

Expansive and relatively unexplored, the loyalty landscape holds much promise in 2015. While marketers have gravitated toward transactional rewards programs in the past, future strategies will move beyond this traditional approach in an attempt to engage consumers and enhance customer relationships at every step along the buyer's journey.

Though many companies still depend upon loyalty cards and points-earned programs to sustain consumer interest, many have come to recognize that such initiatives limit loyalty growth. These programs facilitate discount addiction, but neglect to foster brand intimacy. Thus, as loyalty continues to evolve, brands will begin to move beyond the traditional "get and give" system to achieve their goals. According to the "Keep Customers: Successful Loyalty Through Analytics" report, marketing executives pursue loyalty programs in order to retain valuable customers (53 percent), keep current customers (47 percent), increase sales to current customers (44 percent), and create strong brand affinity (43 percent). Therefore, moving forward, brands will focus on understanding precisely what customers want from these relationships so they may cultivate the best possible approach.

"The top brands make people's lives better by anticipating customer needs, determining what's important to them, and improving their lives as a result," says Errol Greene, solutions development manager at Clear Harbor. "Great loyalty programs make the customer feel they play a part in the company's growth and success. The experience becomes one that's intertwined with their own identity. Engaging customers in a way that tells them that they matter-that their feedback and input make a difference-is one of the keys to creating customer advocates."

In business, as in life, if companies ask, they shall receive. Thus, it's imperative that brands ask customers for constructive feedback in order to determine which elements of their loyalty program, and their overall experience, resonate the most and which aspects need work. Not only will such methods improve their strategies, but they will also build loyalty outside the traditional program. Consumers appreciate and seek to do business with those brands that encourage their feedback, for loyalty can no longer survive on price alone. Brands must pay special attention to the post-sale experience as they gather the insights necessary to drive increased loyalty earlier in the customer lifecycle.

Brands also recognize that transactional rewards no longer hold the same power they once did because consumers increasingly seek experiential rewards over monetary compensation. Points-earned programs fail to stand out, for brands that tap into the consumer's emotions are more likely to enhance experience and extend loyalty beyond the typical interaction.

"Loyalty is both behavioral and emotional, and companies that really want to compete for their customers' loyalty need an evolved approach that extends beyond the program," says Wilson Raj, global director of customer intelligence for SAS. "This means designing and delivering a program that not only incentivizes behavior via transactional rewards, but also recognizes and acknowledges customer value by deepening engagement outside of the loyalty program."

Social media has emerged as an effective tool for cultivating loyalty outside the confines of the average rewards program. While such channels can easily support giveaways, loyalty campaigns, and limited time offers, social media also enables brands to communicate with consumers in ways that build rapport and reliability. Social media allows brands to engage with customers by developing direct conversations that demonstrate continued care and dedication to the consumer experience.

Lanc??/a>, for instance, was the first luxury cosmetics company of its kind to launch its own loyalty program, Lanc??Elite Rewards and reward consumers for social engagement. L'Oreal, the brand's parent company, implemented this innovative approach to loyalty, luxury, and service in an effort to reward frequent transactional behaviors and promote social engagement simultaneously.

In addition to purchasing products, rewards members can also earn points by connecting and interacting with Lanc??via social media. From posting selfies on Instagram and watching makeup tutorials on Lanc??s website, to checking in at Lanc??beauty events on Foursquare, members can easily track and manage their points in real time.

"We saw an opportunity to engage with our customers, and to help our customers engage with each other, in a deeper way that's true to our brand," says Alessio Rossi, vice president of digital marketing at Lanc?? "Because the program incentivizes social engagement, we believe it will turn our best customers into our best advocates and it will provide new insights on their journey with the brand."

These real-time insights into the member's behaviors and preferences also enable the brand to personalize the given consumer's experience. Once members have accumulated enough points, they can redeem their rewards in exchange for free products. However, Lanc??goes beyond the transactional by also allowing members to turn points into one-of-a-kind experiences, such as private beauty consultations, an all-inclusive day at the spa, or access to New York Fashion Week. This experiential approach to loyalty not only encourages repeat business, but also taps into the brand's desire to elevate and enhance customer relationships.

Brands like Lanc??will also find that social media offers increased insight into what truly drives customer loyalty and satisfaction, as the sentiment shared goes far beyond the transactional insight gained via loyalty cards and their accompanying programs.

"When customers take to social media to express complaints, praise, or concerns about a product or experience, they now expect brands to respond," says John Donnelly III, senior vice president of global sales and marketing at Crimson Hexagon. "The companies that succeed in 2015 will be the ones that create a seamless customer experience on social, and do so in a way that is aligned with the overall brand voice. Responding quickly and thoughtfully to complaints is one aspect, but so is thanking customers for sharing positive experiences and finding creative ways to keep the conversation going."

By understanding what motivates, excites, and inspires customers, brands will be able to create future experiences that are increasingly targeted and personalized, thereby boosting retention rates, building brand affinity, and empowering brand advocates.

Fuel Rewards Program Converts Loyalty Into Valuable Currency

While many loyalty programs promote frequent brand interactions, others aim to reward consumers for everyday behaviors and purchases. Fuel RewardsProgram, for example, rewards members each time they complete qualifying transactions by transforming the traditional points-earned model into cents-off at participating Shell gas stations. Customers need only sign up online or at their local Shell station to receive their loyalty account and card. Members can then link their existing payment cardsin order to start earning rewards at participating grocery stores and restaurants. Program members can also earn cents-off per gallon at the pump by making qualifying online purchases from an array of popular in-network retailers.

"Brands need to view loyalty programs as their way to build and engender long-standing, meaningful relationships with customers and really make sure to get across the message of why customers do business with them," says Brandon Logsdon, president and chief executive officer of Excentus, owner of the Fuel Rewards Program. "When customers are really loyal to a company or product, it's typically not about what they get or how they get it-it's about why. It's about the experience and the feeling they get as a result of the relationship and what the brand does for them personally. Well-designed programs understand that relationship and convey that message on behalf of the brand."

By converting loyalty into an in-demand commodity, Fuel Rewards Program allows brands to extend their reach, while maintaining brand loyalty. The program rewards consumers for going about their daily business, all the while allowing them to earn money toward something they frequently need-fuel. By encouraging customers to link their payment cards with their loyalty cards, the Fuel Rewards Program also reduces friction by creating seamless experiences for both the consumer and the brand participants. Consumers need only use their designated card to continue earning money at the pump, whilebrandscan easily manage transactions and collect data in an effort to continuously refine and improve the overall customer experience.