The power of emotional loyalty is undeniable – research shows that “customers who establish an emotional connection with a brand exhibit a substantially higher lifetime value of as much as 306% and are 26% more likely to recommend the brand than the average client”.
As one of the top loyalty software providers, we’ve definitely been seeing that an emotional bond can be a game-changer when it comes to building loyalty. That’s why we decided to take a closer look at this aspect of brand-customer relationships and hosted a webinar dedicated to the subject of emotional loyalty.
Our event, titled “Is Emotional Loyalty Worth Investing In – an Ultimate Guide to Building Loyalty Magic,” took place on September 26th and featured marketing experts such as Adam Posner from The Point of Loyalty, Comarch’s Marlena Półrola, Deepak Pradhan from ADNOC Distribution, and Gunther Everaert from Motisha.
Together with our audience, the industry standouts looked into the definitions, pitfalls, and most successful strategies in the emotional loyalty realm. The discussion was so lively, and the questions so numerous, that we weren’t able to answer them all. That’s why we’re continuing the conversation right here! Keep reading to get even more insights and a better understanding of what makes customers perceive your brand as a friend.
And if you missed our webinar, don’t worry! You can still watch it on demand by hitting the button below.
Q: How does one appeal to a demographic of customers that may not care about brand loyalty, i.e., customers that make purchases out of necessity and/or shop around for the cheapest option?
Deepak: I have two pieces of advice. Firstly, collect as much customer data when you enroll members as possible. The richer the data, the more accurate information you can derive. This will help create a demography of profiles as well as a broad classification of customers for better targeting. Secondly, evaluate members to identify those who are the most valuable and most investable – create distinct propositions to cater to each group individually. Remember that one size doesn’t fit all – the brand would need to evaluate what works for a better offering.
Marlena: Brand loyalty might come in many shapes and sizes. It’s not necessarily true that there are demographics that don’t care about loyalty. I’d say these are the groups with specific preferences – preferences towards service levels, accuracy of recommendations, convenience, seamless shopping experience, and immediate cost savings. For these customers, loyalty is often earned through consistent delivery of these preferences rather than an emotional attachment to a brand. Understanding and catering to these specific preferences is key for businesses to build loyalty within specific demographics.
Q: What are the most recommended ways to earn brand loyalty?
Deepak: I think there are four areas of focus here. It’s not just one activity or strategy to implement. Creating brand loyalty is a process.
a) EMPLOYEES: Start by taking care of your employees, who will then take care of your customers at all customer touchpoints.
b) SERVICE: Try to cultivate the best customer and after-sales service.
c) LISTEN: Benefit and use business input from the customers. Listen to what your customers have to say.
d) REWARD: Give away benefits to customers who contribute to your program in value and longevity.
Gunther: Agreed. I would also add transparent communication with the key stakeholders, always via different digital touchpoints. Even and maybe most of all, in times of crisis.
Marlena: In my opinion, creating exceptional customer experiences is a cornerstone of earning and nurturing brand loyalty. Understanding customer needs and expectations, rewarding interactions (not just transactions!), personalizing recommendations, creating the “Wow” moments, and trying to simplify your loyalty member’s life – these are just some of the ideas brands should muster in order to earn loyalty from customers.
Q: What is the difference between behavioral & emotional loyalty?
Deepak: Emotional loyalty is more about what a member feels (positive and negative reinforcement) when a brand/service/experience is used/purchased. It can also be defined as what the member feels when the same offering is missing/not received as expected when interacting with the brand.
Behavioral loyalty has more to do with a member’s general attitude that comes out of habit. Habitual behavior is so strong that a customer will be indifferent to other, maybe better, offerings on the market. For example, let’s say that each morning, you buy a coffee from a certain shop because it’s on your way to work. A different coffee house may have a better offer, but that doesn’t matter to you cause you’re looking for convenience and aren’t interested in other options. It’s not about an emotional bond, it’s simply about what you do because it’s a convenient habit.
Marlena: Exactly; this example showcases the difference between behavioral and emotional loyalty very well. In behavioral loyalty, a customer keeps coming back to a café because it’s located near the office. It’s like dating someone just because they live next door and have a Netflix subscription. But with emotional loyalty, a customer keeps coming back to a café because the barista knows perfectly what they want. “The usual double-shot, extra foam, sprinkle of cinnamon, right?". It is not just about the coffee; it is about being known/recognized/understood. It is not a coffee break; it is a reunion. The barista turns a coffee routine into a delightful coffee brewmance (pun intended).
Q: Data shows that around 80% of customers are keen to switch brands for a cash incentive. From that perspective, it seems like loyalty is quite easy to buy. Do you agree with that statement?
Deepak: Members switching brands for cash incentives is very common, although it depends on the kind of brand – if it’s a discount/value/offer-driven. But what matters here the most is whether the brand that obtained another member due to a cheaper offering will be able to retain the customer and/or arrest lapsation.
With more mature brands and their offerings, both members and the brands put long-term loyalty higher than short-term discount benefits. A brand’s offering (not offer) should, therefore, focus on driving long-term loyalty. Cash incentives should be perceived as one of the ways to acquire customers (tactical benefit), not as a long-term retention strategy.
Gunther: Cash incentives are a good extrinsic motivator to open people’s buying habits towards another brand. But, if that company’s core values don’t resonate with its customer’s, then the effect might be short-lived or even non-existent.
Marlena: Loyalty driven by cash incentives is often shallow and transient. Once the incentive is used or forgotten, customers may revert to their original preferences or seek better offers elsewhere. Over-reliance on cash incentives can erode a brand's value and perception. Customers might associate the brand primarily with discounts and incentives rather than its core values, products, or services. Cash incentives are like sugar rushes - super exciting at first, but they fizzle out. True loyalty? It's the everlasting hug, always leaving you feeling good inside, not just in the moment. Striking the right balance and integrating incentives with a holistic, customer-centric approach seems to be key to maximizing their benefits while ensuring sustainable growth and loyalty.
Q: What do you think about gamification?
Deepak: I find gamification to be an extremely creative way to engage members, especially because the prime age group for most retailers using apps is usually younger, and gamification aligns with this focused age group. Having a periodical/timed gamification option on a loyalty program app is more helpful. Desktop gamification was a rage in the past and has slowly migrated to handheld device formats now.
Marlena: Gamification is like adding a sprinkle of magic to everyday activities, turning them into engaging and enjoyable experiences. By incorporating game elements like points, badges, and levels, it boosts motivation, encourages participation, and fosters a sense of accomplishment. However, balance is key; excessive gamification might overshadow the core purpose of the task or activity, so it's essential to strike the right balance for a delightful user experience. Ultimately, gamification is a playful tool that, when used thoughtfully, can turn the mundane into the extraordinary.
Gunther: This is a great instrument to engage your audiences in a low-entry manner. For example, in a sales incentive program, we had a weekly knowledge question at 9 a.m. The first ten participants who gave correct answers received a simple real-time bonus in extra points, which was an incremental cost for the organization versus the return. After a month, everybody at the dealership knew not to disturb these people at that time because it was important for them to participate in the simple knowledge quiz. So, keep it simple and engaging in line with the goal you want to achieve, which – in this case – would be broader knowledge.
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