If you ever need to create a new loyalty scheme, there are a few starting points that might seem like common sense. And they can probably go straight out the window. Senior planner James Bartram reveals the five counter-intuitive things he’s learnt whilst researching marketing loyalty.
What have you been up to recently? Me? I’ve been working in a team travelling the UK researching one of the country’s largest loyalty schemes and going to bed at night reading the philosophy and psychology of loyal people - all in an effort to re-engineer loyalty schemes for 2019. Here’s a few things I’ve learnt so far, in case you ever find yourself in a similar position.
1. You can’t aim to create ‘loyalty’, just behaviours that look like ‘loyalty’
The thing I’m working on creating doesn’t really exist, which isn’t a great start. Disappointing, but true. ‘Loyalty’ is thrown around as a catch-all for a load of different behaviours we can observe and even encourage within a customer base. But ‘loyalty’ they certainly are not. And naming it such doesn’t really help us.
So don’t aim for the marketing myth of ‘loyalty’. Instead, take the time to properly find the optimal behaviours you want to see in your customer base. Understand them, nurture them, sustain them, aid them and play them back to other segments with a propensity to act in a similar way. When you’re successful and you see those behaviours happening together, it may well look like your customers are being loyal. Reminder: they’re not. If you were to stop doing what you’re doing, it’s most likely that they would to.
2. Aiming for ‘loyalty’ does marketing agencies a disservice, and confuses what we’re trying to achieve.
When agencies talk about ‘loyalty’, they oversimplify what we achieve with our work. This humanistic, magical quality we haven’t properly quantified and don’t quite understand… (part charisma, part human need to bond, part unknown) makes our impact intangible. Again, it’s better to focus on specific behaviours. They are quantifiable, KPI-able, distinct, interesting and insightful.
We are masters of customer behaviour change, the cumulative effect of which might look like customers care more about us than they do - but often they don’t. And there is a real danger in the complacency that comes with a brand believing ‘loyalty’ will make customers act any other way than what is optimal for them in that moment.
3. A best in class loyalty scheme is just standard marketing now, so why build one?
Back in the day loyalty schemes were held up as great ways to build data profiles, understand customers and communicate directly in compelling ways. That’s routine these days. If your marketing isn’t data driven, experience-orientated and communicated in compelling creative ways, then you’re a dinosaur not long to be stalking the savannahs of adland.
So what’s the point in a loyalty scheme? I’m not sure anyone has a compelling answer yet, but the added element of community and how important that has become in our digital lives is one way greater value can be created from ‘loyalty’ activity.
4. If you have to build a scheme, your building blocks are data, communication and customer experience
When we broke down ‘loyalty’ and rebuilt it in the image of modern marketing, it was clear that a compelling scheme had to be built on data, experience and communication excellence.
Data provides our ability to be relevant and is how we build trust. For customers to adopt ‘loyal’ behaviours we have to show we understand them - because to some degree they’re going to give us responsibility for acting in their interests – and for that, we need data.
Nothing creates stronger bonds than shared experience. Brands that focus on being useful, being problem-solvers and providing experiences that exceed expectations build bonds that prove they are worthy of additional consideration and achieve greater engagement. Both of which can look like ‘loyalty’.
Human beings like simple, so our communication needs to be on point. Make the complex easy and the level of ‘buying in’ you’ll receive increases, because the individual can easily articulate their choice, reaffirm their position, even evangelise your work. All of which build the bonds that tie customers to you.
5. Forget marketing, build a product
Given all of the above, we decided it’s time to think about loyalty and loyalty schemes in a completely different way. I’m not going to tell you more than that (wait a few months and you’ll see what we’re up to). But here’s a starter that might get you thinking how we are.
Instead of asking yourself how to make customers more loyal adopt a product mindset, ask how your current client or brand could build a £0 product consumers pay for with engagement?