As we are now firmly gripped in the digital age, it’s easier than ever to reward customers for their loyalty to a brand. However, many brands don’t deem taking the time to recognise loyal customers as a priority, despite the fact that rewarding purchasing behaviour is core to customer engagement.
There are many benefits to rewarding engaged customers, including improved retention, increased lifetime value, and strengthened relationships. Therefore, it perhaps makes it even more surprising that we see very few brands engage on this level, and those that do are often wide of the mark in their reward strategy.
Value exchange has become more commonplace across markets, as customers have become savvy and are taking greater ownership over what kind of data they divulge. Brands must now trade-off with customers, and offer rewards that entice people to share this vital information.
These rewards should delight customers and, where possible, even surprise them. There is an education to be had here, as some businesses mistake rewards for discount led propositions, which are simply not sustainable in the long-term. In worse case scenarios, this can lead to brand devaluation that potentially can impact on profits.
One of the most effective ways of rewarding customers still lies via loyalty programmes. These offer a variety of hard and soft benefits (tangible and emotional rewards), which can be tailored to an individual, dependant on their purchasing habits. The points system, in which rewards are earned for every transaction, is widely understood by customers and easily managed by organisations – but that is not to say that brands shouldn’t offer elements of surprise and delight within their propositions.
Brands are now going the extra step and are offering such incentives as free and discounted products or exclusive VIP services in return for loyalty. These services add value to customer relationships, and provide an excellent customer experience.
Third party offers have also risen in popularity. Many organisations team up with partners of similar values and attributes to provide customers with benefits from increased engagement. These offers are most effective when there is a close association with the chosen brand and if delivered in the correct manner, these can provide the surprise element customers love.
As a result of rewarding engaged customers, organisations collect more useful data, develop stronger relationships and create advocacy, helping to prevent attrition. It goes back to the old adage that a simple thank you goes a long way!