As more brands launch loyalty programs, retailers must work harder to differentiate the rewards they offer. In an article for MyTotalRetail, GartnerMKTG analyst Brad Jashinsky shares how to make a loyalty program stand out from the crowd. Learn more:
there's a risk that consumers will become fatigued. Retailers will have to work harder to stand out from the crowd. By following three steps, retailers can differentiate their loyalty program to provide real value to customers, boost engagement and, ultimately, drive more sales.Consumers and marketers tend to think about loyalty differently. For marketers, loyalty is mostly about repeat purchases, while for consumers it’s much more than that.
Attitudinal loyalty metrics, such as customer satisfaction and customer referrals, offer an upstream view of meaningful customer loyalty — loyalty driven by sentiment as much as intent to purchase. Determine if existing loyalty metrics align to behavioral incentives, and adjust accordingly. Brands should regularly measure a comprehensive set of loyalty metrics that includes both transactional and attitudinal metrics to identify if customer needs and brand loyalty are shifting.
However, offering a regular cadence of coupons and freebies isn't without risk. Retailers offering too many rewards can devalue brand equity and can increase the costs of sale. This is because already-loyal customers will accrue rewards without changing their buying habits. and deliver hypertargeted messaging. Use these efforts to deepen engagement and provide additional data capture for improving programs that can also potentially attract new customers.
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