Customer loyalty is more difficult to obtain than ever before, yet it’s never been more vital to a company’s success.
The pathway to securing customer loyalty is to provide an engaging experience your customers can’t get anywhere else.
That’s why more brands are launching premium loyalty programs that offer instant, 24/7 benefits that traditional loyalty programs can’t touch.
But before you can launch a successful program in 2020, there are five things you need to think about now.
1. Who Will Be Your Staff Evangelist?
You already get it.
A premium loyalty tier engages your best customers. Sixty-six percent of consumers say they are willing to pay more for an excellent experience with a company.
Rewarding them with instant and ongoing benefits results in measurable increases in core KPIs.
But, without an internal advocate your premium program dreams will be trampled by an always evolving company project road map.
Will this be another great opportunity that does not see the light of day?
No! Not if you have someone on board on the inside driving the project and keeping it on track.
Think of this role like a project manager.
This person sets the vision and direction of the program, maintains a proper timeline, and serves as the liaison between the brand and your loyalty partner.
Premium loyalty is a difference maker that delivers immediate measurable returns.
So, whether it’s you or someone else in your company, a passionate team member needs to be anointed the in-house evangelist.
This person communicates the clear message of how the program will increase member engagement, impact gross sales, profits, and incremental spend.
Once you have your own premium loyalty evangelist in-house, it’s time to think about the next step.
2. What Do You Know About Your Best Customers?
All retailers say they know who their customers are. Really?
If so, why are they all being presented with the same rewards program?
What’s engaging about requiring your customer to make multiple purchases before recognizing them? With so many options for your customers and direct to consumer on the rise, the answer is, not much.
Retailers need to truly understand their customers to then offer attractive benefits that will magnify engagement.
To achieve this, retailers need to put themselves in their customers’ shoes and ask questions about preferences, habits, and desires.
These types of qualitative insights from customers give retailers a more complete picture.
Each purchase presents an opportunity to win or lose their loyalty.
In fact, the traditional spend now and win later model can be a disincentive.
With the 80/20 rule in mind, your best customers can make or break your year. You need to identify that top segment, understand what motivates them, and then acknowledge them with a rewards program that says I know who you are.
3. What Are Your Competitors Doing?
Eighty-seven percent of consumers satisfied with a retailer’s premium program would choose that retailer over one offering lower prices.
What loyalty and engagement strategies are your competitors employing?
It’s not enough to simply match on price and providing great customer service is a given. A premium loyalty program sets you apart providing a competitive advantage, where adoption and first mover status allows you to grab market-share.
Premium loyalty is new and different.
It moves beyond pay-to-play where enrollment provides access to the same experience.
For example, Lululemon offers unique experiences designed specifically for its loyalty program members.
Premium programs proactively engage your best customers, recognizing them and rewarding them with benefits that are informed by your understanding of your customer and their expectations.
You need to know who your competitors are and assess their offerings.
Armed with this knowledge, you can create appropriate benefits that meet and exceed customer needs. This reinforces your brand value and differentiates you from your competition.
Understand what competitors are doing. And does that appeal to your audience? Or is it lacking?
This is where you can find opportunities to differentiate your program from the competition and build real emotional connections with your customers.
4. What Are Your Program Goals?
A very important and often overlooked piece of the loyalty puzzle is that brands need to set clear program goals from the start to accurately measure results and success.
While every loyalty program needs to be centered on your customers, data is one example.
Data continues to become more important.
Customers are now concerned with where their data is going. You need data for personalization and to find more customers like your best customers.
Increased engagement could be another critical goal associated with your loyalty program.
For example, a new loyalty program that includes instant benefits boosts customer engagement immediately.
Some other loyalty program goals include impact on customer lifetime value, frequency, recency, and spend per transaction.
The more clarity you can give your loyalty program goals, the easier it will be to construct the right program and KPIs.
5. How Will You Get Management Buy-in?
Loyal customers are 5x more likely to make a repeat purchase and 4x more likely to refer the brand.
You are all in on premium loyalty. You know your customer; you’ve received focus group and survey feedback informing your premium tier value proposition.
Internal and external resources are aligned and all that remains is initial testing. What could go wrong?
Well, “the best laid plans of mice and men often go awry.”
If you don’t have C-suite buy-in from the start the likelihood of reaching a test phase is limited and the likelihood of positive program results are diminished.
If management doesn’t care, staff doesn’t care, and that reality is compounded for in-store promotion where store associate buy-in and follow through will determine success or failure.
Customer loyalty must be cultural because if leadership is not convinced, then it becomes a trickle-down effect.
Keep Your Premium Loyalty Program Purring
After launching your premium loyalty program, you’ll want to keep that engine purring by keeping a watchful eye over these five areas.
Optimization is critical to any program, but especially to a premium loyalty program because you want to always offer the benefits that members desire.
Remember to designate a staff evangelist to spread your premium loyalty message.
Truly listen and understand your customers’ expectations and design your program around them.
Be aware of your competitors’ loyalty offerings so you can differentiate your program.
Set specific program goals that can be measured against for progress and success.
Make sure to acquire management buy-in from the C-suite level at the start. You don’t want to work with a small team in a silo and constantly sell your program to senior leadership.
Having corporate backing from the beginning will make the entire process more seamless and collaborative.
Which of these areas do you think is the biggest challenge and why?