Why you should update your approach to customer loyalty

There was a time not so long ago when a simple loyalty program was considered enough to win and keep customers long term.

But that old misconception has changed. Many businesses now realize that it takes a lot more effort to win true customer loyalty.

Customers want to feel valued. And they want to participate in loyalty programs that stand out. But, once everyone started running their own loyalty schemes, it started a race to the top.

Why a loyalty program on its own isn’t enough

Ultimately, customer loyalty is much more complex than simply offering low prices and eye-catching deals. There’s a significant emotional element to it too.

Emotional loyalty comprises three separate factors:

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Affinity = a customer’s appreciation of a brand and its product.

Attachment = how valued by a brand a customer feels.

‍Trust = how much a customer feels respected by a brand.

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Emotional loyalty plays a very important role in the development of customer loyalty as a whole. Consequently, companies need to understand how emotional loyalty is fostered in everything they do.

Where is emotional loyalty fostered?

Bearing in mind the three components of emotional loyalty, it should quickly become apparent that it’s a business-wide concern.

It’s built every day through customer interactions with the following departments or activities:

• In-person interactions with sales representatives or other employees in stores
• Sales and customer service calls
• Through emails and other forms of digital communication
• Customer reviews posted online or via word of mouth
• Stories in the news or other publications
• Messaging and other interactions through app or website

Brands have always been aware that these factors have an impact on customer experience. But successfully bringing them under the umbrella of an advanced customer loyalty operation requires a different approach.

Keeping a finger on the pulse

Brands aiming to lead the way in customer loyalty need to consider how each of these individual touch points shape their customers’ opinions.

This requires monitoring and reporting methods for qualitative data, e.g. customer satisfaction and customer sentiment. Tracking this kind of data is tricky. But there are tools out there that can help.

Utilizing one type of loyalty data without the other increases the likelihood of an oversight in your analysis. Oversights will reduce the relevance of your offering to your customers, and relevant rewards are the entire point of a loyalty program.

The most important factor with regards to customer data is the way it is used. In this case it’s specifically how you use it to enhance your loyalty offering. Fitting together both key types of loyalty data - behavioural and emotional - requires careful consideration.

Loyalty campaigns are a key feature of out Promotion Engine. Find out how we help our customers set up advanced loyalty programs and much more on our blog.

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