Tiered Loyalty Programs can build real loyalty sentiment and boost retention by introducing a switching cost – members don’t want to lose their status. Each tier is achieved through a combination of spend and/or frequency, and benefits are progressively added for each threshold. The loyalty tier qualification criteria can be tweaked to enable a manageable audience for the most select benefits. Tier Based Loyalty Programs are a good fit for organizations that are well equipped to deliver the extra services – the highly competitive luxury department store sector provides useful insights and creative thought starters for this type of program. Nordstrom’s Nordy Club builds on their famous service heritage with benefits that keep high value customers coming back.
Over the last few years, I’ve seen client interest grow dramatically in revamping their customer loyalty program design. The focus has increased as these programs have become a central marketing strategy, and the competitive intensity is fierce. But change is never easy -- it takes a motivated executive sponsor and the right window of opportunity to get the project moving. This article lays out some catalysts to get your customer loyalty initiatives moving, and tips on how to design a customer loyalty program for maximum impact.
As noted in Loyalty Measurement: C-Suite Needs a Balanced Scorecard, executives need a balanced presentation of results to gauge program performance. Loyalty Sentiment is one of the three elements of the LoyaltyLevers Balanced Scorecard, with measurement of the appeal of Loyalty Program Benefits and Member Affinity. These key indicators gauge the equity you are building with positive Loyalty Sentiment and Emotional Loyalty. This article dives deeper into measuring Loyalty Sentiment.
Surprise and Delight is a well-established component to great brand experiences and loyalty programs, harnessing the Decision Affect theory that unexpected outcomes have a greater impact than expected outcomes. Though best suited to service oriented businesses, others have found ways to side-step the challenges of scaling this approach, succeeding brilliantly in deepening emotional connections with their customers.
Have no doubt, this is a moment of opportunity for loyalty programs. Data privacy laws continue to tighten, which only increases the importance of first party, permission-based data. Consumers know the importance of their information, and loyalty programs can provide an important value exchange for the permission to use it. Presto -- loyalty programs are now becoming THE foundation to all data driven marketing, quite a turnaround for what brand marketers once viewed as a promotional side hustle.