5 Ways Your Loyalty Program Can Give You a Competitive Edge

February 5, 2019 Jon Siegal

Skateboarder balanced on the edge of a ramp

Regardless of your specific vertical — e.g. restaurant, hospitality, or retail — loyalty management is a key component of building and nurturing a dedicated customer base. Successful loyalty programs all share some basic features, but to gain a competitive advantage it’s time to think beyond points and rewards, and ensure your program is best-in-class. Here are five ways your loyalty program can go beyond the basics.

1. Reinforce your brand values

Your customers are attracted to your brand for a reason. Whether you sell luxury products, are a socially-conscious retailer, or a sport/lifestyle brand, your customers in some way relate to your brand values and culture. If your loyalty program reflects that, you should experience high levels of member acquisition and engagement.

A great example of this is the Vans Family loyalty program by Vans, the action sports lifestyle brand and one of the largest youth culture marketers in the world. Members receive access to exclusive contests and experiences and sneak previews of upcoming product releases. They also have access to exclusive patterns to customize footwear and accessories in the Vans Customs platform. What skateboarder wouldn’t want his or her own exclusive shoe pattern?

Most importantly, the program is consistent with Vans’ mission of promoting an active lifestyle, youth culture, and creative self-expression. It’s designed to recognize, reward, and celebrate Vans fans for who they are and what they like to do. The program surprises and delights fans with already strong emotional connections to the Vans brand, which leads us to our next important criteria.

2. Connect with customers on an emotional level

According to the Harvard Business Review, “emotionally connected customers are more than twice as valuable as highly satisfied customers.” This emotional connection can be driven by a number of factors, including, “feeling a sense of belonging,” “be the person I want to be,” and “stand out from the crowd.”

It’s critical to determine what motivates your customers and then communicate with them in that manner. Take Harlequin, the international publisher of romance novels whose readers are largely women with traditional values, focused on family, faith, and community — and who believe in happy, “fairy-tale” endings. The Harlequin My Rewards program recognizes these drivers and took measures to ensure the right elements were considered throughout the development of its loyalty program. It enables the company to design customer journey maps that followed the preferences and behaviors of its readers.

The program provides its readers with offers they care about, such as free print books and eBooks, autographed books and copies of upcoming books not yet available, and sweepstakes entries for prizes such as lunch with your favorite Harlequin author. Around Valentine’s Day, readers can visit the site to download Valentine’s cards and also discover ways to celebrate “Gal-entine’s Day” with their community of girlfriends. What better way for the brand to bond with their romantic and social female readers?

3. Create an engaging customer experience

You’ve heard it before, but it’s worth repeating — the customer experience is everything. Make sure every guest experience is convenient and frictionless. If you’re a restaurant or fast casual/QSR, do you support mobile ordering and mobile payment (most notably demonstrated by Starbucks)? Do you have mobile order kiosks for quick pick-up in store like Panera or Little Caesars Pizza Portal?

Not only does the everyday experience at your store have to be seamless, quick, and painless, there are other creative ways to create an engaging customer experience. Old Chicago Pizza, for example, offers a terrific example with its unique and wildly popular World Beer Tour in which loyal customers can drink up to 110 different beers, receive rewards, and get their name on a World Beer Tour plaque in their hometown restaurant.

4. Personalize (so you don’t perish)

Customers today expect personalized communications from their brands. Remember those “dear occupant” mailings that still periodically show up in your mailbox? Good luck with those! Customers expect personalization. They want to be greeted by name and have their personal preferences known in advance. In fact, 56 percent of customers drop loyalty programs that don’t offer anything of interest or personal relevance.

Of course, it’s not just about being recognized as an individual, people also want personalized treatment. Let’s say you’re a hotel brand — one loyalty member might want a reservation at a hot restaurant while another would be wowed by access to exclusive local events. Others might be equally pleased to have all their favorite newspapers delivered each morning.

5. Stand out from the crowd

Commodity “copycat” loyalty programs are easy to spot: they are indistinguishable in the customers’ minds, are non-differentiated, and easy to copy. In general, they rely solely on points, rewards, and offers that look the same as your competitors’ (such as the ubiquitous birthday or anniversary rewards). Even worse, “loser” programs lose you money and tend to reward customers for existing behavior and do not actually motivate new behavior. All of the programs mentioned above go far beyond the typical copycat program. Does yours?


About the Author

Jon Siegal

Jon Siegal is the Vice President of Global Loyalty Sales at Cheetah Digital. He is focused on helping businesses use digital and social experiences to acquire new customers and grow consumer relationships.

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