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Loyalty is Harder Than Ever (And Why That’s a Good Thing)

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By: Clarus Commerce |

Posted on September 3, 2019

As retailers rethink their respective loyalty programs, consumers are enjoying seemingly endless retail options. This point alone makes customer loyalty harder than ever because consumers hold all the cards.

By Jim Tierney

As a result, the marketing landscape has shifted: Power is moving from sellers to buyers. Businesses have a heightened need for customer loyalty, now more than ever. If retailers need loyal customers more than ever, and customers are less loyal than ever, what gives?

Why is Customer Loyalty so Difficult?

First, we must understand why loyalty today is so challenging. Traditionally, loyalty was achieved through a series of transactional benefits delivered to members in exchange for their business—for example, points rewarded for purchases. While transactional benefits are still necessary, experiential benefits are needed as well.

This is where attaining true customer loyalty becomes challenging. Many loyalty programs feel very similar, especially ones run by similar retailers. Brands must try to seamlessly mix transactional and experiential benefits that are unique to them while also elevating the program’s overall value. Securing and retaining customer loyalty is harder today than ever.

Here’s why that’s a good thing.

Loyalty is a Call to Customer Centricity

If loyalty is harder today because of a plethora of choices for consumers, retailers must make it their mission to differentiate. Given this backdrop, creating customer loyalty becomes more difficult for retailers as they strive to make emotional connections with their customers.

The good news for retailers, though, is there is an abundance of opportunity to differentiate yourself now through a loyalty program that isn’t a status quo, one-size-fits-all model. It’s a better time than ever for retailers to really get to the core of what their customers care about. That’s where the opportunity lies.

Companies seeking success in customer loyalty need to put their customers at the center. This sounds cliché, but while most companies say it, only a few truly deliver. In the Age of the Customer, brands need to find ways to provide additional and unique value that can attract and retain a consumer’s loyalty.

A one-size-fits-all loyalty program doesn’t work because it doesn’t offer real value and make members feel exclusive. Retailers have to be customer-centric and understand pain points to offer true value in a loyalty program.

Often, a brand’s loyalty program goals are acquisition focused and are viewed as a key metric. But, when acquisition is the overarching goal of a loyalty program, it loses any point of differentiation because members are treated the same. Retention has to be the goal for retailers because acquiring consumers through a loyalty program serves no purpose if you can’t keep them. Instead, brands need to address members’ individual wants and desires.

Retaining loyalty program members for the long term is the ultimate goal. Address customer pain points through offering value-laden benefits and you will receive elevated engagement and earn greater retention. By keeping a customer-centric focus, you will provider greater value to your members and your loyalty will lead to greater member retention.

Also Read: True Loyalty Doesn’t Involve Pleasing Everyone

Loyalty Means Something Different to Everyone

Loyalty means something different to everyone and that’s exactly why brands need to listen to and understand their customers, identify their pain points, and create a program that addresses those points in an enticing way. Creating a program unique to your audience is special and can spark greater loyalty and retention.

While it’s true that customer loyalty is harder to achieve today, it also is a good thing because of the opportunities it provides retailers that are willing to rethink their loyalty strategies in compelling fashion.

Give Your Customers VIP Treatment

Roll out the red carpet for your VIP customers! Make benefits truly desirable so a consumer sees instant value in them. Personalization and relevance will drive true loyalty. Brands should constantly evolve and consistently offer differentiated value, more choice, and a superior experience to generate repeat purchases.

The same proliferation of choice and channels is making it harder for loyalty programs to differentiate their rewards currencies. Most large programs, whether in retail, financial services, or travel, offer the same broad lineup of redemption options.

Treating your best customers better will reap huge results from a loyalty perspective. Your best customers are so for a reason and will most likely be attracted to a premium loyalty program. So, what does a stellar VIP loyalty program look like?

Consider what LululemonPrimeCineplexWayfair, and the Oakland A’s have done from a VIP loyalty program perspective.

Learn more about treating your best customer to a premium loyalty experience.

Take This as an Opportunity

In this Age of the Customer, with unlimited options abound, retailers can seize a challenging environment by creating an engaging loyalty program. It’s really an opportune time for retailers to forge a competitive edge through differentiation in their loyalty programs. Combine those transactional and emotional elements around your customers’ needs and good things will follow.

While a one-size-fits-all program won’t achieve sustainable loyalty, retailers can rethink their strategies, identify customer pain points, and create an offering that addresses them through a series of loyalty moments.

Give your customers VIP treatment and show them how special they are. Your customers want to feel wanted and embrace exclusivity. Programs need to evolve and focus more on delivering great experiences and convenience. Offering true value will lead to differentiation and is critical to attracting and retaining customer loyalty.

It’s more critical than ever to identify customers across channels, build more robust customer profiles, and create personalized experiences that result in emotional connections.

Loyalty is harder than ever, but think of it as a huge opportunity. It’s a prime time for retailers to rethink their loyalty strategies and make their customers shine through their respective programs.

Jim Tierney is a Loyalty Content Specialist at Clarus Commerce, working closely with the B2B Marketing team. Aside from cranking out loyalty-related content, he is the proud father of two beautiful daughters, an avid runner and an old movie fanatic who calls Alfred Hitchcock his favorite director and Claude Rains his favorite actor.