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Future of Retail — Customer Engagement


issue 05


LOYAL CUSTOMERS ARE ENGAGED CUSTOMERS Let’s clarify for a moment what “true” brand loyalty looks like. It’s not as simple as being an active member in your loyalty scheme or making frequent purchases. These will likely be characteristics of a loyal customer, but they don’t define her. A customer who is truly loyal has an emotional connection to your brand. She doesn’t shop repeatedly because it’s


convenient or because, for the moment, she’s satisfied with your service. She continues to spend because she likes and trusts your brand. Something about your values or message resonate with her, something about the experience she’s had of doing business with you makes her feel connected to your organisation. In other words, she’s engaged with your


business. A study by Rosetta Consulting found that highly engaged customers were more likely to feel that the brand they loved knew who they were and what they wanted. They aligned with the brand’s message, and felt its communications were relevant to them. In other words, just like loyal customers, they had an emotional connection to the brand. The backbone of true customer loyalty, then,


is emotional engagement. And for discount- centric programmes, this is their downfall.


THE DECLINE OF THE DISCOUNT SCHEME The task of a loyalty programme is (or should be) to make customers feel that their relationship with the brand is valued - and in doing so, encourage them to spend more and shop more often. Once upon a time, simply having a loyalty


programme was enough to show customers they were appreciated. Personalised service from large retailers wasn’t really feasible, so a scheme that offered a regular discount in return for continued spend was enough to win customers’ repeat business. Today, however, the market is saturated with


rewards programmes. The traditional points- for-discount model no longer stands out. With every retailer offering similar rewards and point-earning mechanics, programmes fail to connect with members on an emotional level,


or add substantial value to the brand-customer relationship.


GREAT EXPECTATIONS Retailers are operating in an age where customers place a high premium on the experience of doing business with a brand. Having seen examples of exceptional experiences delivered by businesses on the cutting edge, they’re less inclined to settle for subpar experiences from the brands they interact with regularly. And these experiences aren’t necessarily


big-budget, viral stunts. They’re simply about connecting with customers on an emotional level, delivering personalised service and making each individual feel pleased, cared-for and valued by the brand. And this is where the problem lies -


most discount schemes don’t create these exceptional customer experiences. The typical points-for-discount programme


usually works something like this: the customer makes a purchase, earns some points based on how much they’ve spent, and eventually accumulates enough points to earn themselves


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