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Customer Experience

How to inspire customer loyalty

Tiffany Loh
Smarter Writer

Tiffany Loh is the Smarter Business™ & News and Digital Editor, with varied writing experience always looking for a unique story

Tiffany Loh
Smarter Writer

Tiffany Loh is the Smarter Business™ & News and Digital Editor, with varied writing experience always looking for a unique story

A customer loyalty program is much more than a card-based reward system. It's a way to create brand fanatics.

2018 research by Mastercard shows that 9 out of 10 Australians belong to a loyalty program. In fact, the average Australian is a part of 6.1 programs – 79% relating to retail.

However, another study by Edgell Knowledge Network found that despite being members of loyalty programs, customers don’t show any more brand loyalty than non-members.  In fact, 81% of Australian loyalty program members don’t know what the benefits are, or how and when they will receive them.

So how can loyalty programs be used to create brand fanatics, not just textbook loyal customers?

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Why Apple has fanatic fans instead of "merely" loyal customers

Brands need to start mapping the entire client journey across various touch points and explore exactly what mental, geographical, and lateral moves a client might make, and where they need to plug the gaps.

Apple did this brilliantly when they modelled their client engagement journey on the Ritz-Carlton Hotel in New York. The reason we now have a concierge, a Genius Bar, and Geniuses at Apple Retail Stores is because Apple looked outside their industry into another – hospitality – for a great client engagement journey.

They were inspired by Ritz-Carlton’s model and applied it in a new way, which has engendered the highest sales per square metre of any retailer in the world. This is the reason why Apple doesn't just have loyal customers, it has fanatic fans.

Why are so many customer loyalty programs ineffective at creating brand fanatics?  

As the research shows, many Australians have joined multiple loyalty programs, and often have so many that it’s hard to keep track of them. Without providing a unique reason to engage, a business’ loyalty program can get lost in the crowd.

Most customer loyalty programs are missing the opportunity to be “gamified” – to offer you a sense of progress, like you are offered in a video game. You need to provide a sense of progress and gamification, so that your clients see that there is a good reason for them to stay loyal.

You need to constantly sell the client on why they should keep doing business with you, and you can do this via a nice interface: a simple barometer, messages acknowledging their custom and business, while making it easy for them to exchange their points for something of real value. 

Brands need to be more active across digital channels, and provide contextually relevant reminders to their loyal clients that they exist.

For example, send a digital voucher to a loyal member each Friday at 7.26am. Why? Because you have figured out that they will walk past your coffee shop at 7.35am, and that, having just come back into 3G range on their iPhones upon exiting the train station, they’ll be craving a double espresso at that exact time. Wow them with a push notification telling them to collect a 'hot double shot of espresso' with a 'thank the coffee gods it's Friday’ voucher.

How can businesses generate new opportunities using customer loyalty programs?

Consider creating an umbrella brands (think One World frequent flyers program), which gives customers the choice of where and how they cash in their loyalty points.

Retailers in a suburban precinct or shopping centre, say Paddington in Sydney, could get together and create a loyalty Paddington Platinum card which gives members of the Paddington Platinum a 5% discount in all the local stores on Oxford Street, and a 10% discount in the local restaurants to drive more traffic to the area, and discounts and perks for spending their dollars locally. This requires collaboration, but with technologically it is more feasible now than ever before.

Small businesses may also want to think about what else they can package in to ensure they add value to their VIP clients – special-offer nights, wine tastings, gift giveaways – and, ultimately, a recognition of their loyalty.

Create brand fanatics

Explore Telstra’s Business Tools to find more ways to create fans of your business.

Inspire brand loyalty among your customers.

Discover resources, reports and insights to help you achieve your goals.

Find out more

Originally published 14th November 2016. Updated 30th July 2019.

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