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Loyalty Experience Management

The secret sauce that makes loyalty programs stick

The amount of rebate a brand gives back to consumers, is a key determinant of loyalty program participation. In fact, consumer research we have worked on at Merkle1 shows that the main reason consumers participate in loyalty programs is for discounts (39%) followed by free products (30%). The most attractive feature of a program is the chance to win large prizes, something consumers would not typically spend their own money on, followed closely by instant gratification. However, such an approach of buying loyalty with rewards, rebates, and discounts, comes at a high cost and doesn’t foster an emotional bond with the brand.

To build long-term loyalty, brands need to move beyond discounts to focus on how their program enriches the lives of their members. This requires brands to put the consumer first and focus on their experience at every interaction - what we term loyalty experience management (LXM). Consumers are acutely aware of the number of choices they have and the type of experience they desire. Leaders like Amazon, Apple, Lazada, Grab, WeChat are all setting benchmarks of experience, from 2-hour delivery to one-stop ecosystems.

Here are four key ways brands can interact to elevate the loyalty experience and deepen their bond with consumers:

1. Personalization.

Consumers demand personalized experiences that go way beyond a name and point balance on an email. 85% of respondents in our 2020 Loyalty Barometer believe the ability to select their own benefits and rewards is a key feature of a loyalty program. While 74% also want to see personalization in earn opportunities.

2. Surprise and Delight

Show loyal consumers that their loyalty is noticed, goes a long way, with 59% of respondents believing this is the single most important thing a brand can do, especially when they least expect it. Surprising and delighting consumers, with non-monetary benefits that have a high perceived value, have a strong impact on the relevance of the brand in the consumers lives.

3. Make Lives Easier

From prioritized delivery and concierge services to one-click payments and transparent return/ warranty policies are all ways brands make themselves relevant and meaningful in consumer lives. Brands that are empathic to consumer needs, pain points and able to translate those into value back to the consumer are best positioned to win. However, creating consumer-centric thinking across the organization is perhaps easier said than done. A good starting point is to survey your loyalty members to understand their needs and motivators and use tools like consumer experience mapping to identify the value proposition in each brand interaction.

4. Appreciate and Recognise

76% of respondents in our 2021 Loyalty Barometer want the brands to recognize them as a member. The simple act of saying “thank you” and welcoming a consumer back can make a big difference with 41% of consumers saying this was one of the most important ways a brand can interact with them. While such messaging costs nothing and is easy to set-up, it goes a long way in showing to the consumer that the brand appreciates their business and acknowledges the consumer’s part in the company’s success.