It is incredible but true, there are company managers that refuse to implement loyalty strategies because they still associate them with those old-school reward programs that consisted in collecting points to gain prizes which would become obsolete right after the launch of the campaign.
Contrary to what many think, the loyalty industry is in full swing. Thanks to profound technological transformations, martech companies will see a substantial increase in their growth rate and the entire loyalty industry is expected to exceed $13 billion by 2026 at global level.
How did we get here?
Step number 1 was realizing that loyalty strategies apply to the entire consumer base, not only to a small percentage of high-spending clients. This realization has led to a new way of conceiving loyalty. Today’s loyalty is an attitude, it is about showing that you care about yourcustomers throughout the entire customer life cycle. Retention strategies need to return value to customers by rewarding them for the purchases that they make and for building a mutually beneficial brand-consumer relationship through daily interactions with the brand.
Hence the idea of BEHAVIORAL LOYALTY. Behavioral loyalty is a multichannel approach that integrates digital solutions, business intelligence and machine learning tools aimed at getting to know clients’ tastes, preferences, and inclinations to create personalized customer experiences that change over time.
Behavioral loyalty deeply relies on a data-driven approach and a set of technologies that allow for the tracking of user behavior. Only in this way can brands implement targeted communication strategies in line with customers’ interests.
Before diving into the sea of “Data Loyalty Management”, we need to debunk some old myths about loyalty. Here are 4 behavioral loyalty rules to keep in mind:
Engage your entire customer base, not only high-spending customers The idea that the more consumers buy, the more loyal they are, is anachronistic and fails to consider our social structure. A single person, for example, is likely to buy only one pack of cookies but they might love the brand just as much, they might serve as a brand ambassador and participate in the initiatives launched by the brands, namely contests, surveys, events etc. They might even persuade their friends to buy the product, so why leave them out?
Go beyond RFM (Recency – Frequency – Monetary value) People who share the same socio-demographic characteristics and have the same buying habits are not necessarily the same and might very well belong to different user clusters. When monitoring user behavior, we must take into account customers’ attitude towards a certain brand or service over time. This is what churn rate management teaches us. Imagine to be dealing with a client of an energy company, would you rather tell them to consume more or to consume wisely and let people know about it?
Think and act in real time. Monitor your performance on the go Why settling for a bunch of data at the end of the campaign, when you can know all about your clients in real time by simply using Data Loyalty Management strategies? Business intelligence and machine learning tools are there, we now need to develop the necessary skills to use them properly to generate a positive impact on ROI during the campaigns.
Loyalty is a value to be shared across all company departments. Stop the silos! Behavioral loyalty programs don’t only generate transactional data acquired from the purchases that customers make, they also provide extremely valuable information to all company departments, R&D included. Behavior-oriented retention strategies lead to a better understanding of the customer base satisfaction and give access to relevant insights, thus becoming a real market research tool.
“Customer centricity” is on everyone’s lips. However, this is something that should be given for granted today. Look at what the companies whose products are approved by the early adopters are doing. They work hard to improve the way they interact with their target audience, they offer personalized customer experiences, they create improved UX and UI designs and they have abandoned outdated RFM and cut-price strategies.
Loyalty must become an ongoing process where brands show consumers how much they care about them day after day. To deliver real value, loyalty must be built on consumer behavior and data analysis.