“Going digital” in 2020 is not just an exercise to be discussed later, but a mandatory requirement if businesses want to survive and thrive in a competitive environment. Especially in a pandemic-hit world, traditional brick-and-mortar businesses realized how important it is to be digitally established. In fact, many companies have thrived by putting all their focus on their digital activities. In a post-COVID world, the digital economy is going to be at the center stage now.
But where does customer loyalty lie in a digital market? Customers practically have far more choices in a digital market than in conventional markets. Your competitor is just a click away, or maybe even sharing the same screen space with you. What would a customer choose? How to optimize customer loyalty in an environment where there is the unlimited competition?
Your competition is not just limited to your rivals. A social media notification or a Netflix stream are also your competitors as they compete for the attention of customers too. Whoever gets the click of the customer wins. This is a broader sense of competition at the attention stage of customers.
Optimizing customer loyalty for digital markets takes more than a transactional relationship of reward points. Designing a loyalty program in an ever-changing landscape can be more challenging than it used to be. From what we have observed so far, customer engagement is a good metric to measure enterprise loyalty programs in digital space.
Here are some ways to augment customer loyalty in a highly unpredictable digital market.
If customers pay for loyalty programs, they will be more loyal to you. There is behavioral science at the core of it. This is similar to a subscription model offered by many streaming platforms. This makes them come to your platform because they have shelled out dollars to join your program. Once they have invested their hard-earned money to get more benefits out of it, they are likely to stick to it. They eliminate all other choices by default when faced with competition. For example, Amazon Prime subscribers generally prefer to buy from Amazon and consume content on its streaming platform. When they do random shopping, they prefer Amazon over other platforms just because they have a paid subscription.
If a program is designed that makes customers pay upfront, it usually works better online. This keeps customer’s attention from meandering as they have a base where they can start from.
Marketing has always been an integral component of loyalty program management. Find out the motivations of your customer when they hang out in specific channels. The mistake that many brands commit is bombarding generic messages to all customers. A common message for all customers can appear as hollow without any context. Don’t just broadcast your one message with little versioning or optimization, but find out appropriate methods that set the context. As they say, make your message personal if you want to send it across very far.
For example, a viral meme can be optimized into brand messaging to generate traction. The trending section of social media can be used to personalize your brand communication. Targeting and relevance are important factors to get better results out of your communication.
Segment your customers as per demographics, collect data-driven insights on what messaging works best for certain segments of the audience. Create great content that resonates with the interests of the segment.
In an online environment, customers are exposed to excessive information and brand messaging all around the screen. Everyone is fighting to get a customer’s attention with different strategies. Therefore, it is difficult to get your voice heard in a highly noisy digital environment.
A one-to-one message which is personal in nature goes a long way in acquiring customer loyalty than a generic message that’s for everyone. The more personal it gets, the more universal it becomes.
Companies must listen to what customers are saying, so they can build strategies that revolve around customer’s interests directly. One classic example is Sainsbury changing the name of their product name after a suggestion of a young girl. The name ‘Tiger Bread‘ was changed to ‘Giraffe Bread‘ when a little girl commented that the stripes of the bread had more resemblance to a giraffe than a tiger.
This message went viral and saw an increase in customer loyalty for the brand. The company demonstrated that it cared for customer’s suggestions and was open to change after constructive feedback.
Brands that go beyond their call of duty eventually win their customer’s loyalty for life.
There can be no definite answer to the ‘correct’ loyalty program for digital setups. Most of the loyalty designs are on a ‘trial and error’ basis, but some optimizations work better than others. Customer loyalty optimization for digital markets is finding the right mix between innovative ideas and predictable strategies.
Optimizing loyalty for digital markets can be tricky because it needs to find a balance between science and art. The calculative strategies and tactics which work in traditional markets must be combined with the dynamic, unpredictable behavior of the digital world. Finding the sweet spot between data-driven scientific systems and spontaneous artistic messaging is the right way forward.
If you are looking to design a reward program that caters to your digital audience for B2C or B2B customers which enhances your business growth, feel free to have a discussion with our loyalty experts now!