Loyalty Marketing: Understanding it and Getting it Right

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Loyalty Marketing: Understanding it and Getting it Right

What the Dallas Cowboys & Chef Boyardee Both Prove About Loyalty Marketing

I read a quote the other day posted by Seth Godin that really opened my eyes to the true meaning of loyalty:

“Loyalty is what we call it when someone refuses a momentarily better option”  – Seth Godin

We equate this type of loyalty to our own personal relationships, sports teams, television shows, or even our personal favorite brand of canned ravioli.

When you acknowledge what you’re loyal to in your daily life, I bet you’ll realize (deep down) that there’s always something better out there. For instance, are you a football fan? I personally know a die-hard Dallas Cowboys fan who acknowledges that they certainly aren’t the best team in the NFL today. But because he grew up in Dallas during their glory days, the Cowboys remain his team of choice regardless of the fact that 1) he’s now moved out of Texas and 2) he truly despises Tony Romo.

Let me throw a personal example out there for kicks to really drive this point home. As a child, I grew up on Chef Boyardee Canned Ravioli, as it was a staple in my household and the “go-to” meal of choice when my parents were too lazy or too rushed to supply a more nutritious alternative. As the story goes, it has become somewhat of a comfort food as I’ve gotten older and a brand that I associate that “warm, fuzzy feeling” with. The truth is, I know there are probably hundreds of other brands of canned ravioli out on the market that are perhaps cheaper or healthier, but to be frank, I could care less. Chef Boyardee will always be #1 in my eyes (and stomach).

I can go on and on with countless examples of how loyalty plays a role in our personal lives, but we all already understand this type of loyalty. It just makes sense to us. Why is it then, that the minute we walk into our office and close the door to the outside world, our perception of loyalty seemingly changes? As business executives, have we distorted the meaning of loyalty marketing when we try to put a dollar sign on its value? Where have we gone wrong?

Manufacturing Loyalty through Quantitative Metrics

Businesses are often misguided into thinking they can “manufacture” loyalty through the creation of loyalty programs that are analyzed solely on quantitative metrics. We spend countless hours devising incentivized reward offers and crunching numbers that we are quickly losing sight of the big picture. As a result, there are too many cookie-cutter solutions that the market has become immune to. Let’s be honest here – who really keeps track of how many bonus points he or she has accrued? Who has time to read through the intricate details and legal disclaimers that accompany each loyalty program? Don’t get me wrong – these programs do in fact play an important role, but they are only a piece of the pie.

Let’s take “program” out of the equation for a minute and set our focus primarily on the word “loyalty.” Rather than perceiving it as something you should measure, it should be perceived as something you earn through constant relationship building and follow-up. Simply put, the only way you will reap the benefits of loyalty marketing is to redirect your focus from cost cutting and reward points to customer engagement and results. People are not loyal to special cards, cash discounts, or points. They are loyal to brands.

Think about it. Do you want customers who are looking to nickel and dime you and turn to you only when you’re the best deal around? Or do you want customers who value you for you, and will shop with you regardless of what other hot deal comes around?

So stop discounting your products and services to such a degree that you discredit your brand and spoil its reputation. Rather, focus your energy on communicating with users. Invest more time into delivering a good product or service with exceptional service to repeat customers and referrals that drive the majority of your sales. 

Loyalty is based on customer experience. Customers who choose you because they are happy with your services are 100 times more valuable than customers who choose you because you are the least expensive option at the present moment. Who do you think is coming back?

Once you’ve got your customers hooked and you continue delivering beyond their expectations, they’re in it for the long haul. Reward these individuals with your utmost respect to ensure that they stand by you regardless of wavering market conditions. This might mean picking up the phone a little more often than you’re used to, or sending a periodic personalized email thanking them for their continued business.

Read More: Your Customers Called…They’re Lonely

There are certainly going to be those lone stragglers that have seemingly fallen off the face of the earth. They used to be your biggest fan, but for some odd reason or another, they’ve become apathetic. The question is, how do you treat these disengaged users? Consider launching a re-engagement email marketing campaign to revitalize those who have been inactive and strive to re-connect with them using interesting, relevant and personalized content. This process begins with a custom-designed email creative that re-instates your consumer-centric focus and your goal of continually delivering on the needs of your loyal customer base.

Before I continue on the topic of a large-scale re-engagement email campaign, it is important to first address the benefits of cleaning your email list prior to launch. Because a large segment of your customer database may consist of dead, invalid, or abandoned email addresses, you risk generating a high bounce rate from your deployment and subsequently damaging your sender reputation.

The benefits of a re-engagement campaign are twofold:

1) You will convert previously inactive users to loyal, engaged customers

2) You will identify and purge uninterested users who have become indifferent to your service offerings and unsubscribe them from your list.

You might realize that you won’t always have the most attractive or cost-efficient solution to fulfill your customers needs. What you might not realize is that your devoted customers know this. However, their loyalty to your brand will dissuade them from chasing that “momentarily better option” and choose you time and time again.