Driving loyalty through priceless experiences
Generally speaking, customers enjoy discounts that retailers can offer them through their loyalty programmes or not. However, with so much choice available, it is far from the only motivation for sticking with a certain brand. Worryingly too, only offering discounts in an attempt to keep customers loyal, encourages a ‘race to the bottom’ and builds a cohort of customers who are loyal only for as long as retailers can keep their prices low. With most UK retailers facing pressure to increase prices in the near future, this is looking increasingly unsustainable.
If discounts are not the way to secure consumer loyalty, what should retailers be offering instead? The answer for many, is experience-based rewards. For any brands looking to make their most important and valuable customers feel special, their loyalty programmes should include exclusive rewards that customers can’t get anywhere else, such as limited edition products, or access to special events.
Brands can also go one step further by offering genuinely exclusive rewards. This gives shoppers a specific reason to engage with a retailer’s loyalty programme more than anyone else. It also gives customers something to shout about to their friends and on social media.
Once best customers have been identified, retailers can ensure they nurture their relationships with each customer and continue to make them feel loved. By identifying aspiring or potential best customers, they can begin building that relationship with smaller but still enticing rewards.
Equally important is making such rewards aspirational. Truly exclusive rewards must be reserved for your most important customers now and future, but they can also be used to inspire the rest of your audience. Brands should leverage their top tier rewards to reach a bigger audience, both through their own content and publicity, but also by encouraging the person experiencing the reward to share their experience through photos or blog posts visible both to your customers and their personal connections. This allows other shoppers to understand the rewards that could be available to them as they take advantage of discounts and smaller rewards, inspiring them to build a deeper relationship with the brand that includes more surprise rewards.
When used properly, unexpected and exclusive rewards create both surprise and delight amongst customers. After all, your most loyal customers don’t want to feel as though they’re being taken for granted. One bad in-store experience can lead them right into the arms of your competitors unless you have taken the time to build up a reservoir of good will.
ICLP recently carried out a study to see how different shoppers in the UK and across the world felt about the brands they shopped with. Interestingly, we found a significant difference between generations when it came to exclusive and unique rewards. Millennials are particularly keen on being rewarded with something a little different from the ordinary. We found that 43% wanted to get access to special and exclusive offers in return for their loyalty. Meanwhile 36% said that they wanted their loyalty to a brand to mean that they could experience things that they would otherwise not be able to. The younger generation is looking to be more demanding when it comes to personalised and exclusive rewards.
This again shows just how important customer segmentation is, whether it’s based on purchase history, age, or interests. After all, a reward that might make one shopper swoon, might make another shopper shrug.
When done right, priceless experiences can ensure that a deep and lasting relationship is built with your most important customers, while also future proofing your brand by endearing yourself to a new generation of shoppers. After all, they say that the best things in life are those that money can’t buy.