Powering lifetime loyalty connections has been a focus of mine throughout the year. I enjoyed sharing the three stages of powering these types of connections – getting to know the customer, creating a plan for ongoing dialogue and adjusting communications along the journey and the role of both technology and services. Here I’ll explore how brands have achieved success powering lifetime connections with their customers.
Powering personalization through gamification strategies
To enhance personalization strategies, several brands have integrated gamification loyalty mechanics into their marketing programs. The application of typical game playing elements (such as point scoring, competition with others, rules of play) to other areas of activity is one way to create new experiences and draw on customer emotions to cultivate loyalty. For example, this year Starbucks leveraged gamification tactics to enhance the experience of its Starbucks Rewards members. When members log into the Starbucks Rewards app, they are greeted with ‘surprise’ bonus star opportunities that can only be uncovered by clicking in the app. For instance, 100 stars might be offered for visiting a Starbucks four times after 2:00 pm within a week. The surprise and delight factor creates excitement, and the program has driven notable results. Starbucks Rewards’ membership grew 11% year-over-year to 13.3 million active members in the U.S., with member spend representing 36% of U.S. company-operated sales.
Understanding the experiential rewards consumers prefer
This year we’ve seen more brands shift their loyalty earning structure from transactional to experiential. The experiential engagements create the emotional bond with customers which helps to power lifetime connections. Walgreens knows and understands the importance of focusing on member experiences as part of their Balance® Rewards program. Members have the opportunity to earn rewards that extend well beyond the transactions they make either in-store or online. For example, points are earned for health-focused activities such as feeds from Fitbit devices tracking steps, or stopping at your local Walgreens store to take your blood pressure. Walgreens’ leverages Epsilon’s loyalty platform to support their technology needs, including real-time enrollment through multiple channels and more.
Discovering the value of subscription based loyalty programs
Throughout the year, we saw an increase in brands who incorporated subscription based loyalty programs into their business model. When considering if the model is right for your business, it’s important to evaluate your product (or service) to determine if it makes sense. For example, Bed Bath & Beyond is piloting a paid How brands powered lifetime loyalty connections in 2018 membership loyalty program, Beyond®. Members pay an annual $29 fee in exchange for a 20% discount off all purchases and free shipping for online orders. Beyond® removes the need for chasing down the coupon. Additionally, the free shipping is convenient as it removes the need to have to go in-store. Bed Bath & Beyond benefits because the discount makes their prices competitive, if not better, than Amazon. And customers benefit because the $29 membership pays for itself quickly: often times, after just one purchase.
Creating loyalty by giving back
We’ve seen a trend in the industry where customer loyalty increases when the brands consumers shop and engage with partner with charitable causes. For example, Macy’s does an excellent job attracting customers through its philanthropic efforts. Each year, the retailer partners with the Make-A-Wish® foundation for Macy’s “National Believe Day” which includes letters to Santa Claus asking for their wishes to be granted. For each letter that’s submitted to Santa Claus, Macy’s donates $1 to the foundation. Macy’s has donated over $15 million to Make-A-Wish® and has helped to grant over 1,000 wishes as part of the Believe campaign. When members see this partnership, it creates a sense of brand affinity, encouraging them to want to shop at Macy’s for their holiday gift purchases and beyond.
As we’re approaching the New Year, we’ll continue to track these trends and keep our eye on how brands are continuing to power lifetime connections within the loyalty landscape. For additional insights, please read our powering lifetime connections e-book.