What Do Customers Expect From a Loyalty Program?
A recent report states that the average consumer belongs to 14.8 loyalty programs but is only active in 6.7 of them. Another report by Code Broker found that 65% of consumers engage with less than half of the loyalty programs to which they belong. But that doesn’t say much about the effectiveness of loyalty programs because 71% of consumers say loyalty programs are a meaningful part of their brand relationships in the same report by Bond Brand Loyalty. An Incentive Solutions report states that, adding a loyalty program to an e-commerce platform can increase average order quantity by 319%.
So, if the ROI of loyalty programs is high what causes customer attrition? The answer is simple – Brands are unable to match customer’s expectations from their loyalty programs.
More often than not, brands are unable to understand their customer’s expectations. The first step to improving your loyalty program’s efficiency is understanding exactly what your customers want and expect from the program.
This article will shed light on the most common expectations customers have from a loyalty program and how you can bridge the gap between expectation and reality.
What Do Your Customers Expect From a Loyalty Program?
- To Save Money – The evolution of loyalty programs saw the introduction of unique loyalty plans that offer gift cards, tokens, etc. However, the primary reason why customers join a loyalty program still remains the same. In a survey conducted by Research by Technology Advice, 54% of the respondents said that saving money is their main reason for joining a loyalty program. This proves that the age-old points system is still valid. More than fancy and mostly irrelevant gifts, most customers still prefer discounts on current or future purchases that help with cost-saving. Enabling this through loyalty programs improves the customer experience and consequently the customer lifetime value.
- Relevant and Meaningful Rewards –Customers, now are smarter and not excited by a fancy mug or souvenirs. They are looking for rewards that add value to their life. Rewards that have utility on a day-to-day basis or experiential rewards that add value to the customer’s life garner more attention from the customers. Rewards that supplement the product or service also hold more value since they are reminiscent of the brand and help to improve brand recall value in the long run.
- For A Personalized Experience – In 2021, personalization is huge. Every brand is adopting it and more and more customers are accustomed to it. So much so that customers expect brands to offer them a personalized experience even with their loyalty offerings. According to Forbes, “71% of consumers feel frustrated when a shopping experience is impersonal.” In fact, according to Bond Brand Loyalty, “87% of consumers are open to brands monitoring details of their activity if it leads to more personalized rewards”. With the right loyalty partner, it is not difficult to create a personalized experience that is beneficial to both- the brand and the customers. Click here to connect with Annex Cloud and learn more about creating a loyalty program that is personalized to suit your customer’s needs and expectations.
- Exclusivity – One of the prime reasons a customer joins a loyalty program is because they are seeking exclusive access to the brand. Your exclusive rewards and offers could be your gateway to building a strong brand following. Beauty retailer Sephora is known for its exclusive loyalty programs that offer special privileges to its top-tier customers. Exclusivity and creating a sense of belonging in your most loyal customers make them feel proud to be associated with the brand.
How To Keep Customer Engaged and Loyal to Your Brand?
- Offer Convenience – More than anything else customers are looking for convenience. Small perks like easy check-out and prompt customer service make a big difference in enhancing the customer experience. Many brands have started adopting an omnichannel loyalty experience strategy that syncs up various customer touchpoints for a better customer experience.
- Show Gratitude – Little acts that show appreciation and gratitude go a long way in building a strong customer-brand relationship. Develop a customer-centric approach to make the customers feel appreciated. Small gestures like birthday and anniversary discounts, routine engagement activities can improve the efficiency of your loyalty program and help to build a positive brand image.
- Update or Reinvent the Program – Although it is not recommended to alter your loyalty program routinely it is also important to keep up with changing times. You cannot expect to attract customers with a program that is decades old. Updating your program to offer better deals to your customers can help the brand to reinvent itself. It shows that the brand is fresh and adaptable.
- Strive to Build a Community – Lastly aim to build a community of loyal and dedicated customers through your loyalty program. Create a sense of community and belonging to reinforce loyalty and improve customer retention rate.
Why Do You Need to Manage Customer Expectations?
Bridging the gap between customer expectations and reality is a cause of concern for various brands. With over-the-top advertising campaigns, it has become extremely difficult to manage customer expectations of the brand. Customers tend to develop unrealistic expectations and get disappointed when their expectations are not met. This is one of the prime reasons for the increasing customer attrition rates.
A satisfied and happy customer can prove to be a valuable asset to the brand, that positively influences this network of family friends, helps with organic customer acquisition and helps to build a strong and credible brand image. This is why it is necessary to manage customer expectations and a good way to start is by offering the customers rewards and incentives in the form of loyalty programs to keep them retained and happy.
To know how you can create a loyalty program that drives value, click here.