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This blog series gives insight into the day-to-day life of LoyaltyLion’s loyalty experts. We’ll look at members from all teams – diving into their roles and responsibilities – how they started their careers and what advice they have to share.
I love my job in Loyalty Technology. It is a mixture of hard empirical facts, combined with creating a human emotional bond with a brand. Loyalty is a powerful natural instinct, and developing innovative and creative ways to influence this is both challenging and (as you would expect in a loyalty programme) highly rewarding!
I’ve worked on many loyalty programs over the years, on behalf of global manufacturers including Sony and P&G, to major retailers including Tesco, Waitrose and Ahold. But the one I’ve always thought has been brilliantly executed is Vitality Health. They’ve completely changed the way consumers feel about insurance. They took the dry, morbid subject of health insurance and turned the industry on its head through the Vitality rewards programme.
Through their programme, they give away high-value, highly relevant, points-based rewards that truly created the desired behaviour change. They’ve moved insurance away from being transactional, and have dived head-first into the behavioural and emotional side of loyalty. The really clever thing is that it is a clear win: win.
The rich set of rewards creates a real incentive for customers to participate, and the customers need to be active in order to earn the points and redeem those rewards. This in turn makes them more healthy… more healthy people claim less on their health insurance and everyone is happier! Loyal, emotionally connected customers. I just wish I’d thought of it.
The biggest challenge has always been demonstrating the direct revenue contribution of a loyalty programme. A good loyalty programme creates an emotional connection with the customer, which makes them choose your products and services over competitors’. A board will challenge the ROI of any programme, but measuring the value of emotion is incredibly difficult. The questions are normally along the lines of… “Can you prove that customers bought from us because of the programme? How can you guarantee that they wouldn’t have bought from us anyway?”.
Of course, there will always be customers that are loyal irrespective of a loyalty programme, however an effective loyalty programme actively converts more customers from being disloyal to loyal than leaving this to a purely organic approach. In a world of huge choice and commoditised products and services, rewarding loyalty creates the emotional tipping point between making a purchase with your company and going elsewhere. Having worked with hundreds of international brands, I can guarantee that if there is no emotional connection there is no loyalty. If you don’t have a loyalty programme then you are significantly reducing the chances of creating that connection.
This biggest mistake is taking a purely short term view on your marketing activities. With the spiralling costs of acquiring new customers and the decreasing effectiveness of traditional channels, there has never been a more appropriate time to look after your most valuable customers… your loyal customers. We have seen a consistent trend across our 10,000+ retailers that loyal customers contribute significantly more revenue than non-loyal customers, so you need to retain these important buyers.
To make a retention or loyalty programme successful, you’ve got to invest in creating a relationship that will generate higher customer lifetime value. Discounts and short term promotions have their place, but they don’t create a relationship – in fact they help to perpetuate more promiscuous shopper behaviour. Loyalty is about creating long term value. Investing in incentivising the right behaviours that are of value to both you and your customers will ultimately create emotional, longer term, profitable relationships.
More important than ever.
Actionable insights, enabling merchants to get a better understanding of how shoppers are engaging with their brand, and finding even more innovative ways to drive a desired shopper behaviour.
I have been in scale-up martech for over 20 years and LoyaltyLion is right in my sweet spot. However, it was the people here that made joining LoyaltyLion such an easy choice for me.