Defining your customer loyalty strategy is an essential step in building any successful business. Whether it’s a formal loyalty programme based on points, prizes, stamps or partnerships, or simply a mindset based on delighting customers, there’s no doubt that creating compelling customer relationships is more important than ever before. Given the daily challenges of running a store efficiently and profitably, this focus and mindset on loyalty can be lost, so in this article, we’re reviewing both the basics and key principles on how to go that extra mile, to show you ‘how to wow’ in the increasingly competitive world of convenience retail.
Three ‘C’s for a Great Foundation:
While an overall marketing strategy is focused on applying the ‘four P’s’ as key marketing principles, in loyalty marketing programmes, the ‘three C’s’ dominate. Without them, any loyalty programme will fail, as the entire purpose of a programme is create mutual value with customers, so each element is critical.
- Clear: Although this is perhaps the most obvious principle, it’s the one that most often fails. Simple ideas and genuine intentions are complicated by expectations that programmes will drive short-term profits but at the expense of long-term relationships. Loyalty is not a short-term campaign – it’s a long-term lever. Programmes can become overly promotional in nature, with customer data being targeted for extensive sales activities. Or in other cases, customers are simply not aware that a programme has been created to win their hearts! If sales staff and marketing executives are tasked exclusively with revenue objectives, the goal of building a longer-term loyal customer base can often be lost along the way. As Albert Einstein said “The definition of genius is taking the complex and making it simple.”. This first principle of a clear programme structure and benefit-led proposition MUST guide every campaign, otherwise your programme can become a concept that confuses rather than creates value.
- Compelling: My favourite definition of loyalty is described by the Harvard Business Review as “the willingness …to make an investment or personal sacrifice in order to strengthen a relationship” and this applies equally to merchants and customers. ONLY when a loyalty programme offers compelling benefits are customers willing to invest in the relationship. For brands, the challenge is to find the perfect balance of tangible and exciting rewards and recognition – equally important elements in the structure of a loyalty programme. The best programmes offer both functional AND emotional benefits that customers understand and appreciate. With compelling reasons to join, customer’s behaviour measurably changes and responds to our proposition.
- Consistent: Another frequent mistake made by loyalty programmes is the lack of relevant communications sent to members. Campaigns can be designed to educate, sell, or ‘surprise and delight’ but sometimes the most effective communications are those that simply say thanks. Effective communications are sent consistently over the long-term, long after internal stakeholders lose the initial excitement that accompanies a programme launch. The campaigns sent out in the weeks, months and years after the programme launches must of course continue to be relevant and personalised, while remembering that just because a campaign has been sent doesn’t mean it’s been seen or heard. It’s critical to engage consistently and respectfully across multiple channels if we expect to cut through our customer’s busy lives and connect. George Bernard Shaw famously reminds us that the “single biggest problem with communication is the illusion that it has taken place” – this basic problem affects many loyalty programmes as they try to consistently maintain an effective and engaging frequency and format for their campaigns long-term.
Click here if you’d like to access our detailed campaign guides on how-to create and execute great content for your members, segment-by-segment.
Beyond the basic principles above, our digital world means higher expectations in loyalty marketing. Here in Liquid Barcodes, we’ve coined the term ‘live loyalty’ to summarise the three ‘E’s that great programmes use to become truly a part of customers’ daily lives. By clearly understanding each party’s separate objectives in everyday terms, we have gamified the relationship between customers and convenience retailers in a way that also delights the C-Suite. We believe in setting a genuine intention for every programme to make a difference for its members, so here are our top three tips to keep in mind if you’re setting your goal on ‘being brilliant’ at loyalty:
- Easy: The original idea behind the convenience industry continues to dominate customer demands. Whether it’s enabling pre-order or pre-payment, customers love when a loyalty programme makes their every day life easier. Can you eliminate the need to queue? The need to pay cash? The need to repeat yourself simply to enjoy your same order day in and day out? Customers love when you make their lives easy and your loyalty programme is the perfect tool to use.
- Empowering: As customers demand more valuable experiences, ‘live loyalty’ programmes enable customers to create a connection with their friends and family by sharing every day moments as gifts or treats. Already successfully established in China, ‘Say it with Starbucks’ has enabled millions of Starbucks gifts to be shared online over the past year by leveraging partnerships on both Alibaba and WeChat. Does your loyalty programme empower your customers to share and connect?
- Engaging: Gamification is one of the most effective tools to drive consumer engagement, with over ninety compelling case studies quoted by the gamification expert Yu-kai Chou. Examples include Domino’s pizza who have seen over 30% of orders now placed on mobile since they gamified the platform. It’s also well known how effective the technique has proven to be in the fitness industry, with FitBit and Nike successfully using gamification to drive engagement in recent years. Nike alone quoted over 5 million people engaging! Gamification can be used for almost any marketing challenge in convenience retail, whether it’s to drive footfall, reduce waste, stimulate trial of new products or share a moment with friends and family. Using fun is a clear differentiator in a world of loyalty programmes that can sometimes become very tired and dated.
There are plenty of detailed loyalty tactics and ideas available here on our website, which simply need to be approached with a loyalty mindset. JC Penney is quoted as saying that “Every great business is built on friendship” and I’m sure you’ll agree that every great friendship feels easy, empowering and engaging. Hopefully by using these principles, your loyalty programme will too!
Liquid Barcodes is a leading global loyalty technology company specialized for the convenience store and foodservice industries. Our proprietary cloud-based technology platform allow retailers to create and manage their digital marketing campaigns with a proprietary process we call the “customer connection cycle’ to engage, promote and reward customers activities in real-time across digital and media channels.
How we do it:
We have developed the most advanced loyalty and digital marketing technology platform specifically for convenience store and foodservice retailers globally.
Retailers use our self-service dashboard to create and manage loyalty driven marketing campaigns that increase purchases with their existing customers, as well as effectively target and acquire new customers through partners or paid media channels.
One core component of live loyalty is gamification. We have gamified branding, loyalty and promotions. We believe this approach is essential in order to get customers’ attention and ultimately truly engage them with repeatable actions thereby winning their loyalty.
Check out some of our exciting/proven results here:
Chief Content Officer, Liquid Barcodes and Independent Loyalty Consultant.
With over twenty-five years marketing experience, I specialise in loyalty marketing consulting, managing consumer loyalty propositions, strategy and operations. In addition to working with Liquid Barcodes, my clients have included Telefonica O2, Three Mobile, Electric Ireland, Allied Irish Bank and The Entertainer, as well as Avios – the global points currency for some of the world’s top airlines. I am also a judge for the Loyalty Magazine Awards.