Richard Birksteiner, Managing Partner


Loyalty programs work

choose the program that suits your company

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Loyalty programs work: choose the program that suits your company

Loyalty programs increase the chance that customers will continue to buy your product or service and not switch to a competitor. The most important thing is to gain and maintain the trust of your customers with such a program. "A loyalty program is a marathon, not a sprint," says Everaldo van Doorn, founder of loyalty specialist firm Doornvogel.

According to Van Doorn, the match between the brand and the loyalty program is vitally important: "Apart from the fact that you can always keep updating your loyalty programs, they also need to fit the brand and reinforce the brand value. Good loyalty methods find a way to really help customers and keep surprising them, regardless of their lifestyle."

Loyalty everywhere: in-store, on the website, and in the mobile app

Paper savings cards, physical stamps, and tokens are still around. Nowadays, a good loyalty program is mainly linked to the overall customer experience, and customer loyalty occurs in different places: offline in a store, on your website, or via your mobile app.

Customer loyalty based on emotion

Ultimately, it's about making a visitor, existing customer, or newcomer even happier than you do just with the purchase of your product or service. Well-considered rewards ensure that your brand stands out, which is particularly important right now. Research firm Nielsen has shown that 84% of consumers prefer to choose a brand with an active focus on customer loyalty than a brand without such a focus.

According to Van Doorn, by rationally choosing a brand, customers commit with their heads. "But whether they stay in the relationship is mainly based on emotion. That's why as a brand you have to be human; inspire, help, work together, and keep the relationship exciting. Find ways to touch the customer's heart."

I have listed 4 innovations within loyalty programs to help you choose the program that suits your customers and your brand.

1.     Saving and spending points within an ecosystem
The classic 'saving points to get tea towels' system is on the verge of a major turnaround. This form of customer loyalty is aimed at rewarding existing customers for the volume of their purchases. The more you buy, the more points you save. These points can usually be spent in a shop-in-shop or only on a temporarily offered product, such as glasses or pans at Albert Heijn.

What used to take place with stamped cards, stamps, and saving cards is now automatically tracked in customer accounts or in the app. However, today's customers want more choice and want to spend their points on as many things as possible. According to McKinsey, the growth of the points ecosystem is a trend worth watching. In this form, companies connect with more partners and shopping opportunities in order to give customers more value for their points. This means that online stores also need to open up their e-commerce systems more to external partners.

2.     Smart, personal discount codes
The rapid emergence of smart discount codes has even led to websites dedicated to scanning the web full time in search of all current deals. The right discount at the right moment for the right visitor increases conversion and can boost the average turnover per customer.

Personal discount is also getting better and more targeted, thanks to the combining of different data points. In addition, new insights on the use of those discounts and discount codes for customers within such a loyalty program are useful for marketers and designers to further optimize the program and other commercial activities.

3.     Gamification within loyalty programs
Gamification techniques have already proved themselves to be the key to the success of popular apps such as Instagram, Snapchat, and TikTok. Rewards and a positive (game) experience are central to this. When building loyalty platforms, any applications that enable gamifying tools should be taken into account.

Examples include applying status bars or badges. For example, these bars can show percentages that increase when the customer takes certain actions (such as answering a survey). The idea is that by completing the bar or getting a gold badge, you become eligible for a reward. Customers who complete the game (or challenge) within a certain time receive a reward.

4.     Paid loyalty programs
In a study conducted in October this year, McKinsey highlighted the growth of so-called paid loyalty programs. Paid loyalty programs resemble traditional programs but there is one clear difference: an entrance fee. This can be a one-time fee or a recurring subscription. Paid programs require more powerful rewards to persuade customers, but once they are in, engagement is high.

When designing a paid platform, a separate web environment must also be created that is different from the 'normal' experience for regular customers. Rewards offered here are only available to customers who participate in the paid loyalty program. Access to this environment can be a (temporary) reward in itself and can also consist of a variety of offers discounts, special editions, free delivery, and early access. Businesses that offer such programs include Amazon (Prime) and Zalando.

Good luck with your search for a suitable loyalty program and let us know if we can help you in this search.

Do you want to know more? Read our blog about; data-driven-loyalty-program

Do you want to know more about Richard?

Do you want to get started with a loyalty program within your organization after reading this blog or whitepaper? Or do you have questions about the discussed topics? Then contact us:

Richard Birksteiner
Managing Partner
+31 (0)299 200 800