Consumers have nearly endless options in today’s global e-commerce. Brands compete for market share in a crowded, fast-changing field of dozens—sometimes even hundreds—of competitors.
It’s always been important for brands to carve out an identity for themselves as a way to win customers and keep them coming back. The traditional strategies for standing out among the madding crowd are value- or need-based messaging (“Our product is the best!” or “You must have our widget!”) or transactional loyalty programs (e.g., earning goods or credits through brand transactions).
Build your Brand Through Purpose-Driven Loyalty
But we’re experiencing a growing demand for purpose-driven brands—especially among consumers in younger demographics. As a group, younger consumers are more loyal to brands that echo their personal values.
Purpose-driven brands have an opportunity to bolster their connection to like-minded customers through loyalty programs that line up with their brand purpose. It’s an effective way to form an emotional, values-based connection that gives shoppers an ongoing incentive to keep coming back.
Bringing back repeat buyers is much easier than convincing new customers to cross your threshold, literal or digital, and make a purchase. So for more than a century, brands have been rewarding loyal customers with rewards—from free gifts to discounts using strategies that include punch cards and mileage currencies.
Boiled down to their essence, loyalty programs are customer-facing vehicles for long-term brand relationships. Rewards or incentives for members are part of the equation. The other part is gathering valuable data about spending habits and preferences.
A recent Accenture Strategy global survey of 30,000 consumers demonstrates that nearly two-thirds of consumers want companies to take a visible stand on widely relevant social concerns—such as sustainability and fair employment practices. Given that dominant consumer perspective, making sure a brand’s loyalty program signals and celebrates its values should be a priority.
Earn Engagement by Spotlighting Brand Values in your Loyalty Program
Amid the current challenges of the coronavirus pandemic—which is occurring alongside a renewed drive toward social equity—consumers are considering their choices more carefully.
Aligning a loyalty program with an overarching brand purpose reinforces brand values all around—for the consumer, of course, but also within a brand’s corporate culture. This kind of holistic strategic thinking about how brand values shape loyalty—and vice versa—can help companies avoid potentially problematic one-time gestures that might be viewed as disingenuous.
Transparently and publicly aligning a loyalty program with a brand’s purpose puts that brand’s values into action in a way that will get noticed for the right reasons. Without the need for bullhorns and bluster.
4 Ways to Align Your Loyalty Program and Brand Purpose
1. Extend the brand. Structure your loyalty program benefits around your brand’s core values. Will buyers’ purchases help them achieve a personal goal or contribute to a greater shared cause? Walgreens Balance Rewards nails this concept by encouraging members’ wellness by offering points for activity tracked by a fitness device they synch with the Walgreens app.
2. Offer benefits for greater good. The members of a brand’s loyalty program form an exclusive group. By joining, members signal their values and their interest in being recognized. But that recognition doesn’t have to come in the form of VIP experiences or luxury goods. Find ways to boost members’ sense of social responsibility. REI members help advance the retailers mission to “inspire, educate and outfit people for a lifetime of outdoor adventure and stewardship.” Members know their purchases contribute to REI’s efforts to operate sustainably, and help more people access outdoor activities.
3. Make it compelling. Younger, socially conscious shoppers respond to purpose-driven value propositions. Design rewards around matching member donations or contributing a portion of proceeds to causes. For example, TOMS Passport Rewards empowers members to improve the lives of others. By donating their earned points, members can help combat racial inequity, support teachers, and assist frontline medical workers responding to COVID-19.
4. Make it reciprocal. Use the “buy-one-give-one” ethic to reward loyal customers emotionally and economically. Brands get value when consumers spend money on their products; and customers feel the value of providing for others. Mealshare, a social enterprise that partners with Canadian restaurants, is a great example. For each meal sold, a restaurant contributes $1 to Mealshare, which helps partner charities provide meals for those less fortunate.
Forge Emotional Connections While Fulfilling Your Brand Purpose
Loyalty programs that reward customers with only tangible benefits tacitly invite their members to be tempted away by better perks or more cash back with competitors. That just leads to dueling benefits between brands rather than winning real and lasting loyalty for your brand.
According to a 2019 report from Deloitte Digital, 60 percent of loyal customers use emotional terms to describe their favorite brands—using words like happy, love, and adore.
Brands that embrace and remain true to their values cultivate consumer loyalty by inviting customers into their mission. Connecting with consumers through a sense of shared purpose builds connections that endure long after the glow of cash savings has faded.
Loyalty is driven by emotion—be it loyalty to friends, family, a cause, or a nation. Brands can tap into that emotional drive by structuring a loyalty program that reflects their purpose and helps consumers use their brand transactions to make some corner of the world a little better for someone else.
Dan Jurek, vice president of strategic services, heads up customer engagement strategy practice at The Lacek Group, a specialist brand company of Ogilvy. He’s led successful programs for Bentley Motors, Equitable, Ford, Morgan Stanley, JetBlue, and PUMA. He’s a customer-obsessed marketer with a background in loyalty and customer experience strategy and planning.
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Brand Loyalty Hinges on Emotional Connections - Destination CRM
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