Retail Marketing Summit: Customer loyalty does not equate to ‘points, vouchers, or reduced churn’
There is no shortcut to achieving “locked on loyalty”, explained DecisionDesign director and practice lead of retail, Leanne Rosamilia, at Thursday’s Mumbrella Retail Marketing Summit in Sydney.
Rosamilia spoke alongside the behavioral consultancy’s managing director Tara Ness, in their session ‘First Look: The Behavioural Science of Locked On Loyalty’.
The pair argued that loyalty had never been more important given the current inflationary market, where the cost of customer acquisition is rising at the same time as personalisation capabilities continue to increase, meaning brands are now able to better serve their customers.
Using behavioural science, Rosamilia and Ness unpacked how marketers can achieve increased customer loyalty more efficiently and effectively.
Loyalty does not equate to points, vouchers, or reduced churn, said Rosamilia, adding that “it is very different, what it takes to stop a customer walking out of your store, than what it takes to build a loyal relationship with a customer.”
Improving retention or improving NPS scores, while a good thing in their own right, also bare no real correlation to the concept of customer loyalty, she argued.
The key to achieving true customer loyalty, said Rosamilia, is understanding the difference between “locked in” and “locked on”. In the first, a customer stays in an artificial relationship that they don’t want to be in, whereas, “locked-on” loyalty speaks to a relationship that so appealing the customers chooses to stay because no other brand compares.
The key to building this type of loyalty is an understanding of the “moments that matter”, reward mechanics and the execution of those moments and rewards.
When Should You Deploy
“Rewards can be deployed in an expected versus an unexpected way,” said Ness.
While expected is good, the addition of unexpected rewards keeps the thrill and excitement of a loyalty program going – a ‘surprise and delight’ approach.
While the reward may be unexpected for the customer, Ness added marketers should identify moments of truth at which a reward should be deployed – amplifying a moment of positivity, or neutralising in less positive moments.
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