It’s never been easier to be vanilla, but your loyalty play needs to be pure emotion
Loyalty programs are a crucial tool for marketers to engage and connect with consumers, but as Douglas Nicol, partner at The Works, part of Capgemini, and Aaron Fuller, GM of member engagement at Super Retail Group write, brands that don't create an emotional connection with target audiences risk remaining vanilla.
It has never been easier for a brand to be vanilla. The necessary pursuit of better martech and mining customer data means the focus has been one of systems, rather than seduction.
Loyalty programs will always have an important and robust transactional earn and burn component, but the strategy that ends there is sadly undercooked.
And the danger of being a bit dull and very cookie cutter increases exponentially. We have known for decades that true loyalty is emotional, but it is a truth that has become more important as our world changes and morphs in at least four ways:
- Traditional loyalty program constructs were not built for millennials and today they are overtaking the boomer generation as the largest age cohort. In the last census in 2021 there were 5.4 million Australians in each of these cohorts. Millennials are driven by meaningful motivation in all aspects of their lives and a purely rational loyalty program will never thrive.
- It’s easier than ever for consumers to create their own emotional highs, in a world of incredible creative possibilities delivered by platforms like MidJourney, and extraordinary gaming experiences, the threshold of being boring and mundane has dropped to an all-time low.
- The web is changing, and many loyalty strategies have not embraced it. Web 1 was all about read; Web 2 was about read and write. And today Web 3 is about – read, write and own. Despite some of the early setbacks, the concept of digital ownership will remain and provide a new vehicle for reward and recognition.
- Trust in brands is dropping in certain categories and consumers start with distrust as the default on most initiatives from marketers. Trust in a brand comes from a brand having both character (obvious intent to do the right thing) and competence (the capacity to deliver the right thing).
A recent global survey from Antavo of 290 loyalty leaders on their focus during the current inflation crisis and potential recession revealed focusing on loyalty through member communication and relationship (33.6%) was the top response, followed by transactional loyalty (33.2%), and emotional loyalty (26.9%). The question is do we put effort into all three of these as broadly equal drivers of better ROI?
Here is a simple test of how emotional your loyalty strategy is. Significant responses should be the benchmark. Ask yourself, honestly would the component parts of your loyalty program elicit meaningful consumer responses like these examples:
“That’s actually really useful”
“This is fun”
“I’ll have to share that with my friend”
“That’s generous”
“Now that surprised me in a good way”
“That’s so me”
“This is a win for me and for issues I care about”
If you are failing this test, then think about the impact of both generational change and the impact of the pandemic on how the nature of true loyalty has evolved. The 2023 release of the Customer Loyalty Engagement Index from Brand Keys says the norm is: ‘How well does this brand meet my expectations?’
These customer expectations make or break brand loyalty and include many emotionally charged drivers like personal goals, connection, customer experience, image and self-image.
A purely rational, transactional loyalty strategy, leaves a business exposed. With Amazon AU and Prime becoming part of our everyday shopping lives, as Google did for search 20 years ago, the role of loyalty, done well, can defend the Northern Wall against the ‘Everything store’ and help maintain active members, market share/share of wallet and continued growth.
For marketers to explore this better, here are four opportunities to get more emotional in a brand’s loyalty thinking.
Open the kimono
Consumers understand how marketing works, how they are being influenced. But we often ignore this and ignore the opportunity for members to be part of the planning and execution of the program. It drives better thinking and advocacy.
Scotch and Soda do a great job with this, inviting members of their ‘Club Soda’ loyalty program into the behind-the-scenes selection of new season product lines. They also have minted 1,000 Founders’ Pass NFTs, which serve as a point of entry to exclusive experiences – events with key Scotch and Soda staff.
Experience is not code
Use your inner creativity to stretch how you think about experience. It is not all about nicely designed forms and buttons. While the hype of the NFT craze has cooled, loyalty opportunities abound. Starbucks created a shiny new tool, which early adopters jumped on, to collect enough points to buy a Starbucks stamps or NFT’s, sold out in 18 mins. They quickly appeared on NFT markets for upwards of $5K, not bad for a $100 stamp. It required no marketing and little PR – the community became the marketing community and the community in turn, created and added to the value and hype.
Align on a great mission
Being meaningful is incredibly important for millennials and a loyalty strategy with a mission, bigger than just profits, is a motivator. Startup loyalty platform Treepoints, is a subscription service making it easy for people to live more sustainably, and rewards them for doing so. They aim to be the Netflix of sustainable loyalty. Climate-tech start-up Lune aims to inform consumers about the carbon footprint of the products they buy online. According to Lune 75% of consumers have more loyalty to brands that take measures to offset carbon emissions. Do you have a tangible credible mission?
Game the system
The average age of gamers in Australia is 35 years (Bond University DA22 report) and loyalty marketers have much to learn from the emotional smarts that gaming companies deploy. During the pandemic gaming boomed and there were umpteen engagement techniques such as game ‘spendables’ and ‘temporal tiers’ which are virtual currencies, limited time seasonal events, progress boosters and one off tier lifts. This was pioneered by Fortnite with their ‘Battle Pass’ annual event which resets every year. If you don’t have a gamer in your loyalty strategy team, you may be limiting your thinking.
The world of the customer is changing, fast, and marketers need to make them not just consider the obvious benefits of a loyalty program, they need to feel the difference every day. The alternative is to stick to vanilla and fail to truly thrive, ignoring the extraordinary possibilities of earning an emotional bond with customers.
Aaron Fuller is the general manager of member engagement at Super Retail Group. Douglas Nicol is a partner at The Works, part of Capgemini.
