Future of Retail — Customer Engagement

issue 05

Creating a more engaging loyalty programme doesn’t have to be difficult, but it will require a bit of a rethink when it comes to your overall strategy.

total of this accumulation - of more positive experiences than negative ones - that defines the basis of a truly loyal relationship. That’s why generic discounts aren’t a

great option. Their value is solely monetary; they’re only really worth the amount that’s printed on the voucher. That sort of value is easily replicated by competitors, and it’s not particularly useful for creating emotional connections. That’s not to say brands should ditch

discounts altogether. Instead, they should be mixed in with other rewards - things like third- party offers, exclusive access to member-only experiences or even free samples of other products and services. Make-up brand Sephora does this well.

Loyalty members are rewarded with free samples, early access to new product lines, and even in-store beauty classes for members only. As a result, Sephora’s loyalty members are highly engaged brand advocates. These sorts of rewards don’t necessarily

cost the brand all that much, but to customers, they’ll often have a higher perceived value than a money-off voucher. And because they offer something that’s harder for customers to find elsewhere, maintaining a relationship with that particular brand becomes more rewarding.

PERSONALISATION IS PARAMOUNT The Rosetta study had a few other key findings about highly engaged customers - namely that personalisation is an essential piece of the puzzle. According to the survey, highly engaged

customers felt that their favourite brand reflected who they were and understood what they wanted. They were also four times more

likely than disengaged customers to say that the brand’s communications were relevant and that it knew how they preferred to interact. What are the implications of this for loyalty

programmes? For one thing, it means retailers must do more than just insert the member’s name into their loyalty marketing emails. Consider how you can use the data you

hold on your customers to recommend more relevant rewards, or encourage new ways of interacting with the programme that suit their preferences. For example, you might send them a helpful video or article related to a product they’ve bought - and then reward them for sharing it with their social community. It’s also important to ensure that your

marketing, loyalty and customer service interactions are consistent. A loyalty member should be recognised as such whether they’re logging into your website, reading a promotional email or calling your service centre to resolve an issue.

REDEFINING YOUR LOYALTY STRATEGY Creating a more engaging loyalty programme doesn’t have to be difficult, but it will require a bit of a rethink when it comes to your overall strategy. To see significant results, it’s important that the principles above are applied across your business, not just to the programme itself. Innovative retailers who have taken this

approach are beginning to see results. As their base of engaged, loyal customers grows, so does average basket spend and overall lifetime value. For retailers who want to win customers’

hearts - and drive sustainable business growth - in a crowded marketplace, prioritising customer engagement is essential.

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