Brand Loyalty Programs: Using Customer Engagement

As a consumer, I am conditioned to seeing the brands I use sell me on loyalty programs. Everything from “cash back” and “reward points” to discounts on additional products and services. So many companies are becoming successful, what I call, “Individual Marketers”. Most of the larger brands and distributors though are still tying loyalty programs to direct buys from the shopping channels. In the emerging world where we are surrounded by advertising and being force fed all methods of sales, who do we choose?

Touch points
Every consumer touchpoint is an opportunity. Looking at a product, product reviews, sharing products on social media, responding to product questions, or any other communication or interaction is good for a brand. Rewarding users for active engagements is far superior to sales alone. It drives repeat business and adds to all the information that is collected on user patterns and product information.

Not all touch points are created equal
A sale is obviously a very powerful indicator of loyalty. The first sale is good, but the second and third sales are far more telling of loyalty. I prefer to think of sales as a measure of success in your loyalty strategy. Many companies offer huge loyalty bonuses for that first sale, then neglect to reward repeat business in a similar manner. Opting for quotas to retain a certain “status” (Ex: Best Buy). These are good for the core users but do little to entice new or the occasional shopping decision makers.

There are other activities, centered around the customer, that bring value. A customer sharing your content or mentioning your brand on a social channel, sharing offer or referral codes with friends, opening emails and reading marketing materials, writing a review for your product, or a consumer performing various functions on your website. All of these have value and thus, should be rewarded in some way.

Engagement? Why…
Where does a brand get it’s best value? Where does it get the most bang for it’s buck. If I have a good shopping experience, or if I find a good price, I am likely going to share that with my friends and family. If I have the ability to earn loyalty points for referrals or simply talking about or to a brand, I would be much more likely to perform those actions regularly. Many companies are starting to take advantage of the increase of social media usage but are not valuing the engagement side of it yet.

Establishing good content strategies and understanding consumer behavior is key to boosting consumer engagement. Consumers want to engage with brands, they want to be seen as ambassadors and get the perks that come with gamification. You want to drive users to your content but that is only part of the goal. Having a user interact or do something actionable with your content (such as a sale) is the goal. Direct sales only account for less than 2% of driven activity on an ecommerce website so what about other actionable goals that could be of benefit and have less barriers? Shares, reviews, feedback, questions, all of these are important and could drive 10 other people to purchase a product or service.

Don’t neglect non-sale engagement when building loyalty programs. Let your consumers amplify your message and drive brand awareness by being ambassadors.