The Ultimate Guide to Customer Loyalty
- 7 min reading
The field of customer loyalty is an extremely competitive area in marketing business. All companies have the same target in mind: to link as many customers as possible to their brand for the long term. But the strategies to achieve this goal differ significantly from brand to brand. Companies also try to make their brand identity shine through, in an attempt to convince as many consumers as possible that they are the right match.
But what are the foundations of a loyalty program? And how can companies get the basics right – from the start? We asked these questions to some experts in the field of loyalty marketing: Geraldine Vercruysse (Senior Business Solutions Manager Loyalty & MKT – Comarch), Jeroen De Wever, and Bülent Candan (Loyalty consultants at Merkle Netherlands and founders of We Can Marketing).
About the speakers
Geraldine Vercruysse is a loyalty solutions expert helping customers reinvent CX and digital journeys. She has 10 years of experience in managing loyalty programs from the front-end (rewards fulfillment) and back-end (IT) perspective in a B2C and B2B context.
Jeroen De Wever is co-founder of We Can Marketing, a marketing agency that has a strong focus on loyalty solutions in online and offline environments. Jeroen has over 25 years of experience in data-driven marketing and customer loyalty.
Bülent Candan is co-founder of We Can Marketing, Loyalty Evangelist with 25+ years of experience in (digital) transformation challenges within the area of Loyalty, marketing automation and data & supply chain solutions
Geraldine, from your position at Comarch you have a good overview of how the field of loyalty marketing communications for retail and FMCG is changing. Could you please shine your light?
GV: Loyalty programs have been common for many years. What we see is that both ends of the spectrum – the brands on the one hand, and the consumers on the other - still show an intense engagement towards loyalty programs. This is also reflected in the results of the loyalty market research Comarch (LINK) conducted last summer in the Benelux. The average Benelux consumer is part of 14 loyalty programs, and each one indicates that they feel loyal to 3.7 brands.
This brings us to two important conclusions: 1. Many brands still engage in the loyalty field and see a loyalty program as a unique channel to connect with customers. 2. It is a battle to win customers’ hearts and build that relationship. You need to do loyalty right. As a consequence, these brands reach out to us and ask us for advice on how they can get their loyalty programs up to speed.
Benelux Consumers’ participation in loyalty programs
Before we dive into this topic, maybe it is good to get the basics right. Bülent, how do you define ‘loyalty’ and what is the difference with a loyalty program?
BC: It is good to make a distinction between “loyalty” and using a “loyalty program” to create loyalty. We define loyalty as an attitude and behavior that favors one brand over all others. It is an emotional connection between a customer and a brand. A loyalty program, on the other hand, is a structured program that rewards preferred behavior based on predefined KPIs, with the aim of creating a greater sense of loyalty at the customers’ end. To achieve this goal, customer experience needs to be seamless, across all platforms and channels. That is why we believe it is important to have – alongside your CRM and campaign automation tools – the right loyalty technology at your disposal. Of course, a tool alone won’t make it work, there are plenty more factors to take into account.
The Comarch survey partially investigated this topic. We were curious to find out what aspects of a loyalty program irritate consumers or demotivate participation. Geraldine, can you share some insights on the most common answers?
GV: The two most common answers are related to the reward side of a loyalty program. Far too often, consumers are confronted with irrelevant rewards, or rewards that are impossible to obtain because it simply takes them too much time to save up for. In this context, relevance and achievability are key here. Additional reasons not to join a program, or to step out of a program early, can be the consumer’s reluctance to share their personal data, or program benefits that are unclear. In both scenarios, clear and good communication can break these barriers. When you ask for the personal data of your clients, it is crucial to motivate them by explaining why this might result in better service or experience for them.
Perceived irritations in participation in a loyalty program
Taken into account some potential pitfalls, it seems very important to build a good basis for your program to work. What do you – as experts in the field – identify as the important elements for a good start?
JDW: The most important one is – without a doubt – the correct and detailed definition of the program goals. What do you expect your customers to do, what is the preferred behavior you want them to show? And for what behavior will you reward them? These goals are often very strongly linked to the KPIs. You will monitor these KPIs later on to check the health of the loyalty program.
An element that is very often overlooked is the engagement of internal stakeholders. A CFO will have a different take on a loyalty program than the head of customer service. To avoid your program losing internal support over time, it is important to embrace their ambitions and concerns, addressing these in the plan of attack. Once this plan is ready, we can prepare a launch, but not before proper testing.
How do you judge the role and value of a pilot or an MVP?
JDW: Testing new assumptions or scenarios is something that we recommend throughout the different stages of a loyalty program, although it goes without saying that the initial launch always needs to be preceded by a pilot engaging a real audience of users. For this pilot, we advise restricting the business case to a few scenarios you would like to compare. To be able to do so, an MVP should be built to perform these tests – this to avoid additional financial expenses. Once your program is live, it is very likely you will gather new insights or build new hypotheses that need validation before being integrated with the program.
What importance do you attach to data?
JDW: Measurability is of course important in order to follow up the program goals. That is why it is useful to align your KPIs with the goals. By doing this, you can smoothly evaluate the progress and the health of your program. On the other hand – as Geraldine mentioned – customers are reluctant to share a lot of personal data. That is why I suggest that brands make the switch from big data to relevant data. There is no point tracking all kinds of data if you don’t use the information. It is even hard to explain to your customer, and could upset them. By limiting your data set to the fields that are relevant for the functioning and optimization of your program, you actually do yourself and your customers a really big favor.
To download the Comarch Loyalty Market Research 2021, please follow the link:
A recording of the related webinar, “The ultimate Guide to Customer Loyalty”, is available here:
Comarch is a global designer, provider and integrator of innovative IT solutions, advanced electronics and specialized hardware solutions. With extensive experience working with companies of all shapes and sizes, building successful loyalty systems in over 60 countries, we're ready to help you boost customer retention and grow your business.
With more than 25 years of experience, we pride ourselves on offering world-class proprietary software and services customizable to your unique needs. Whether you’re launching
a B2C, B2B or B2E loyalty program, you can trust Comarch from end to end. Our clients have reported a $3 return on every dollar spent, a 50% increase in active members, and that 70% of their most valuable members double their spend.
Companies who have chosen to work with the Comarch loyalty team include BP, Heathrow Airport, JetBlue Airways, Auchan, Enterprise-Rent-A-Car, Carrefour, Thalys, MediaMarktSaturn, Intersport, Galeries Lafayette, and more.