What makes a relationship strong? Loyalty.
Loyalty is created from a deep emotional connection that drives people to dedicate themselves to a specific person, place or thing. An emotional connection to a company drives frequent visits, repeated purchases and referrals to friends and family. To develop authentic relationships with your customer base, they need to feel recognized.
Your brand community is like a layer cake with different community members at different levels based on their level of commitment. Not everyone goes into the same mixing bowl. To build the most dynamic brand community possible, are you prepared to work with your most committed and devoted brand community members?
Exploring Transactional Loyalty
Rewards build customer loyalty when well-executed. Most companies appreciate and know how valuable long-term loyalty can be. Traditional ‘mom and pop shops’ provide an excellent example of this. Successful neighborhood restaurants and merchants intuitively understand the broader purpose of rewarding their loyal patrons. They get to know their best customers on a personal level.
These people-savvy business owners reward their loyal customers with exclusive services and attention—such as advanced notification when new merchandise arrives or sending them a special dessert or drink on the house. For countless years, small businesses have been delivering increased value to repeat customers. They know that by nurturing those relationships, they will build a base of loyal customers which will become advocates for your brand.
Studies show that gaining a new customer is five to 25 times more expensive than keeping an existing one. By improving customer retention rates by just five percent, you have the potential to grow profits up to 95 percent. And 80 percent of a company’s future revenue comes from 20 percent of its existing customers. With statistics like that, nurturing existing relationships over growing new customers should be top of mind for any company.
From frequent flyer to hotels and grocery stores, many companies have some sort of loyalty card or rewards card, many you will be familiar with from your personal life. According to a 2015 study, about 90 percent of Canadians have at least one loyalty card and carry about four different loyalty cards in their wallets. Many people belong to as many as fourteen or more at any given time, but most people find this many to be a burden and just end up throwing most of them away because most swipe cards offer little value anyway.
Far too many companies look at these programs as short-term promotional giveaways or deals of the week/month. It’s wrong to think of this as what free things you can give people as a consumer reward. It’s a place to start, but in the interest of building a genuine relationship to inspire advocacy we must think bigger.
Start Thinking Beyond Rewards
Tiered memberships create loyalty and reward your most active members, many who desire status. People are naturally drawn to systems of hierarchy which help them evaluate their achievements as compared to their peers.
Customers want to be engaged in a kind of game. If they can climb through the ranks of loyalty there is a sense of achievement which is often showcased to other members of the community through membership profiles. When you consider that only about five percent of customers are in the highest tier of VIP programs, it makes that conquest more appealing because of its rarity and highly motivating to retain their top status.
The Marvel Insider program is based on increasing levels of engagement with the brand. Insiders earn points for connecting with the brand on social media and sharing Marvel content, downloading podcasts and videos, reading articles, checking-in at Marvel movies and events. The more fans engage with brand the more points they earn and the higher their fan status climbs. The points can be redeemed for digital comics and other merchandise. As powerful brand advocates, these fans do much of the social media marketing for the brand.
Another example: the beauty supplier, Sephora, has created an engaging, multi-tiered reward program that resonates on a personal level with their audience. Through Sephora’s Beauty Insider program, shoppers earn free gifts after they’ve gained a certain amount of points, which can be collected and redeemed by shopping in-store or online. The program grants access to free makeup classes and an online community.
Sephora customers who spend $350 a year are upgraded to the VIB program and receive bonus items like custom makeovers and free monthly gifts. The most loyal customers, who spend $1,000 per calendar year, are upgraded to VIB Rouge and receive a private beauty advisor hotline, free 2-day shipping, and invites to exclusive events. This program offers not just discounts, but special offers entirely and has broken it down into tiers within the program that reward the most committed members.
They offer and reward status. These aren’t just customers, they’re stakeholders with a special identity within the community.
Developing Your Brand’s Loyalty Hierarchy
As human beings, we are social creatures hardwired to avoid loneliness. The term “herd mentality” is thrown around a lot and there’s an evolutionary reason involving safety and survival in numbers. Brand loyalty isn’t a direct means of survival—at least not on the part of the consumer—but many companies have successfully tapped into this mentality by creating large communities around their brand.
A brand community can be characterized by three levels of involvement: a shared perception, rituals and traditions, and a sense of obligation to the community and its members.
In terms of unbridled loyalty and devotion, music fans take first place. Take the unique community of Grateful Dead fans affectionately known to the world as Deadheads. Decades ago, a whole new level of Grateful Dead fan emerged when people cast aside everything else to follow the band touring along side them from city to city, giving birth to a community with its own set of rules and slang. More modern examples would be the Beyhive, the Beliebers, and Juggalos. These groups feel like they’re part of something bigger, and you can see it in other music fanbases around the world. These are not groups who are getting rewards and special offers, these are groups who have a deep and emotional connection with the b(r)and and become brand advocates without paying into it.
Your company must commit to the steps of building loyalty, and senior managers must agree that it’s worth the effort. You must have an unrelenting organizational focus on the goals and measures that will develop a loyal customer base. For the uninitiated, it is best to start with a simple plan to inspire devotion, and then break down the levels of passion within that group. Work on the following steps:
Make influencers out of your biggest fans
Being an authority in your industry isn’t just how many followers you have, it’s about building trust in your brand. Provide valuable information that helps solve an issue or teaches your customers how to do something, and they’ll trust you, and you will gain a loyal following. Let your top evangelists know you see their activity and engage with them on a personal level. Send them a free product or giveaway to let them know you appreciate their support. Let them know you notice them.
Start Social, then recruit
Developing a social media presence is a good starting point for building an audience. It helps humanize your company and builds a brand persona that goes well beyond corporate speak. Be authentic and get to know who your customers are. Your social platforms are an excellent tool to help bridge the gap between public platforms and brand owned platforms and can help distinguish a disinterested customer from a loyal advocate. Social media introduces the community, and those who want more engagement with your brand can graduate and rise through your loyalty program.
Create members-only content
If you operate a tiered level of service, offer your high-value customers a monthly newsletter with content that’s as useful as it is entertaining. You might include content from your blog, industry news, monthly discounts or advanced sale notifications, or invites to members-only events. Newsletters are an excellent way to build relationships with your customers and make members feel like their getting exclusive content.
Put aside some face time
To achieve a deep emotional connection with your consumers, give them real-life experiences with your brand. When you offer your customers the chance to get to know the people behind your brand, it helps build trust and can form a community of like-minded people who will, in turn, become your community brand ambassadors. Hold members-only events that are relevant to your offerings.
Using a combination of rewards, a strong brand narrative, and a distinct brand personality, you can create emotional connections that encourage your customers to turn their experiences with your company into loyalty. When they share those experiences with others, it will create a ripple effect back for your brand—a payoff that results in sustainable long-term growth.