Evolve to establish emotional connections

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Kristin Hambleton, VP of marketing, Neolane
Kristin Hambleton, VP of marketing, Neolane

There is a premium put on loyalty programs that not only gains new members, but, more important, emphasizes retention over acquisition and has proven effective in establishing ongoing dialogues with consumers to increase lifetime value. Yet, an alarming number of loyalty programs are simply broken, leading to increasingly unengaged and disloyal members. One of the contributing factors is that many organizations lack a complete view of a customer's loyalty or status.

For loyalty programs to transform from generic earn-and-burn “transactional” models to interactive, personalized, and differentiated “emotional” ones, organizations should adopt the following best practices:

  • Make it easy for customers to redeem points or rewards. Once you eliminate redemption hurdles, you're likely to discover a direct correlation between redemption and customer value.
  • Solicit customer feedback on your loyalty program—and improve accordingly. Customers will be more engaged, and knowing that you listened will itself go a long way.
  • Use your loyalty program to minimize churn threats. Let members redeem points for annual fees—often a big source of churn—or create “spend and get” offers that offset fees.
  • Collect customer data to increase relevancy. Encourage members to complete profiles. If you have to, bribe them with extra points. Use this profile data to generate targeted messages and offers.
  • Use your loyalty program to differentiate your brand. Offer special, one-of-a-kind promotions and special events to differentiate your brand from more rigid competitors.
  • Create an experience around redemption to lift engagement. Encourage submission and sharing of user-generated content relating to your loyalty program.
  • Leverage your loyalty program as a platform to have relevant, meaningful conversations with customers. Create exemplary experiences—and passionate brand advocates—with features, messages, and offers catered to their interests and needs.

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