A new era for brand loyalty?

Posted in Consumer Promotions and Loyalty, Promotional Ideas, Promotional Gift Cards, Vouchers and E-codes

by Chris Baldwin on Nov 14, 2017 10:17:29 AM

Let's get the conversation started

When a brand pays attention to its customers, it can make people sit up and think “Yes! This company is really listening to me!” A reaction that can lead to a massive boost in brand loyalty – or backfire heartily. Either way, it’s definitely a conversation starter…

This is the position John Lewis found itself in upon announcing that it was no longer printing “boys” or “girls” labels in its clothing.

It sparked massive online debate and has made ‘gender neutral’ an official marketing thing – and that makes it a bandwagon, ready for the jumping.

Don’t believe us? Clarks have since revealed plans for gender neutral school shoes and we’re betting a host of brands follow suit.

It’s a sign of the times when brands need to find new ways to grab their consumers’ attention in order to stay relevant and interesting.

It’s certainly one way of reacting in a world where brand loyalty is apparently ‘broken' – and it signals a new era in the way brands are responding to economic and social trends to stay on top.

LOYALTY? THAT IS SO LAST CENTURY

These days, we live in a culture of change.

Brand loyalty has well and truly bolted out of the stable door, moving as far away as possible from the moment of point of purchase.

To have any hope in making gains, brands desperately need to understand their customers more – and act upon the fact that consumers are savvier than ever.

Most people know how to take advantage of leaving programmes, turning up offers and rejecting retention schemes by switching more regularly than a channel hopper on a Friday night Netflix fest.

Marketing’s obsession with millennials also reveals an unquenchable thirst for consumer experiences.

It’s safe to say that traditional behaviour and consumption patterns went out with the Discman.  

Chris Baldwin, Director of Consumer Promotions and Loyalty, Sodexo, says, “Loyalty has definitely changed since marketers started talking about it. It came to the fore decades ago with the introduction of loyalty cards in supermarkets, but most people have them now, so they clearly aren’t engendering any actual loyalty.”

Of course, it doesn’t help that shopping habits are more fragmented than ever. He adds,

”Loyalty is more about encouraging the return, the repeat purchase, getting the brand to be front of mind. It allows brands to understand their consumers more. They can target and test communications more effectively and make the customer feel valued outside of the purchase environment."

This means that more than ever, brands need to know how to speak to their audiences and when.

IT'S  ALWAYS EMOTIONAL

Of course, not everyone buys in the same way. Sometimes a purchase is driven by price, a recommendation or impulse. Establishing brand loyalty relies less on decision-based marketing and more on driving behaviour around emotion. Brands know that when you create excitement, you create impact. And that drives behaviour change.

Jamie Mackenzie, Director of Marketing – Employee & Consumer Engagement, Sodexo, says,

“Loyalty overcomes any rational-based, price-based decision making because you have a powerful emotional driver – you’re not purely commoditising or buying based on discount.”

Emotion is at the steering wheel of behavioural change and that’s the engine that acts as the catalyst for influencing buying behaviour.

But you knew that. 

It’s finding ways of creating experiences that will lead the quest for brand loyalty into a new era.

KEEPING CUSTOMERS COMING BACK

So, back to customer retention.

Businesses that invest in tailoring their offering to the consumer, making it relevant and now, will get a much better ROI as well as influencing customer behaviour when it comes to renewal or upsell.

That said, with challenger brands having great success in disrupting markets, established brands can’t afford to be slack.

Customer incentives are one way to go – but they shouldn’t be the only channel used by marketers interested in customer retention

loyalty products

If your product relies on annual renewals, such as a utility company or gym, it’s worth rewarding customers for sticking with your brand to avoid churn.

Discount shopper platforms can drive behaviour here as value really matters. El

ectronic vouchers and instant mobile promotions all have a part to play in boosting customer engagement too.

COLLECTOR SCHEMES

These are useful if you want people to increase their purchase frequency or get them to lock into a brand and stop swapping.

If you want consumers to buy three products when they normally opt for two, a collector scheme can drive that behaviour, rewarding them for purchasing three.

PRIZE DRAW MECHANIC

If your product has a longer shelf life of say, two or three years, a prize draw incentive can be a nice way to retain custom.

Whether it’s an instant win, click to win or text to win, these are good because they reward people instantly for a small change in behaviour.

CONSUMERS DON'T STAND STILL

Acknowledging changing audiences will feature heavily in brand strategy for the future.

Brands need to adapt and tap into current trends, considering broader economic, societal and technology changes when attacking their campaigns.

Right now, for example, there’s a view that some companies will look to capitalise on ‘Britishness’ as a brand value in the face of Brexit and challenges to consumer confidence. 

Jamie Mackenzie, Director of Marketing - Employee & Consumer Engagement, Sodexo, says:

“A key driver in influencing consumer behaviour is to acknowledge how audiences have changed. There are so many ways of cutting an audience now. It’s about breaking a campaign down into bite-sized activity, and being agile. It isn’t always about running a massive campaign - very short, pulse activity can often elicit a much better response.”

GENERATION Z IS ON ITS WAY

Wait. We haven’t mentioned millennials for at least half a second. Actually, scratch that, how about Generation Z?

These are consumers who have grown up using Facebook as their search engine. And they’re establishing their own loyalties.

Generation Z is much more connected to lesser known brands because they can interact with them and vice versa.

Smaller brands have lots to gain in targeting this audience because they can afford to be personal.

It’s going to make for interesting following as this generation grows up.

Not least to say what we’ll call the next consumers coming through once we’ve run out of alphabet.

SHAPING CONVERSATION FOR BETTER OR WORSE

We believe that brand loyalty is being driven by consumer know-how.

And this is being driven by technology – from fact checking reviews to word of mouth recommendations pushed by online brand ambassadors and social media, it’s all up for grabs for those brands getting amongst it on the likes of Twitter, Instagram and Facebook.  

As we’re seeing, some of the best consumer engagement marketing is created by customers sharing views, through experiences and reviews.

It couldn’t be more essential to provide people with a platform to do that – brands have nothing to lose by inviting comment – good or bad.

After all, if you want to shape the conversation towards an end destination, you need to be steering the boat.

POWER TO THE PEOPLE

Sometimes it just takes one voice on social media to spark outrage taking the conversation you thought you were having, in an entirely different direction.

Though sometimes when customer feedback is handled really well, a bad review can be as positive as a good one.

Given the column inches and airtime given to John Lewis over their new gender neutral approach, it’s hard to disagree with this.

It’s also where businesses stand to make the most profit – customer retention is still highly rated over acquisition.

And by creating greater emotional connections, brands can drive loyalty and engagement to drive sales.

BUILDING BRAND REPUTATION MATTERS

Peer-to-peer marketing is going places and establishing brand trust is the new currency.

Consumers want to believe in their brand of choice so Corporate Social Responsibility Programmes carry massive kudos.

If a company is perceived as unethical in any way, you’d better get busy to change that. Otherwise it’s time to get your coat.   

We’d say that the success of loyalty is less about points and more about convenience and experience. Trust plays its part in this, but so too does the advancement of technology in driving behaviour.

For example, the success of the My Starbucks Reward scheme shows there is still room for loyalty schemes using technology to connect with customers outside of store through mobile apps and email communications.

Ian Cranna, vice-president marketing and category EMEA at Starbucks, explains:

“Loyalty is more than just a functional offer. A customers’ trust is intrinsic to what the brand offers, as well as the relationship between employees and customers. This helps to keep the customer experience familiar and consistent across sites.”

It would appear, that while customers are getting wise, marketers will do well to play to this wisdom.

WHAT NEXT FOR BRAND LOYALTY?

The lowdown is, consumers have more choices, greater expectations and a bigger voice than ever.

No marketer can afford to ignore that.

But if you get it right – and there’s no reason why you can’t – there’s still room to create emotional connections and take brand loyalty into a bold new era.

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