70% of consumers are willing to recommend a product or service that allows to build a loyalty program (Bond Insight, Loyalty Report). Brand Loyalty and loyalty programs: what do they mean in the business world? How the scenario changed in the last years? Find it out in today’s post.
The most iconic example of a loyalty program is the collection we all made when we was young: being faithful to that snack allowed us to receive something in return. Surprise surprise: this system has a major flaw, if another product would promises better prize customers will run away, loyalty disappears easily.
It is a simple example, but it tells a lot about programs (for which millions of dollars are spent each year) that do not lead to generate brand loyalty for the business: the reality is that they create loyalty to the best offer on the market. Loyalty programs that we well know are fundamentally unsuccessful in the main objective: to create loyalty.
Branded companies must seriously consider this problem, from two different standpoint: from a customer point of view and with a special eye on the internal organization. Let’s think for a moment about human resources or partnership collaborations: without a component linked to brand loyalty, these relationships move into simple economic convenience. When the only variable is money, the game becomes the same as the snacks: the one with the most beautiful prize becomes preferable.
An increasing number of consumers (37%, it was 30% in 2017) are willing to pay to access a structured and attractive loyalty program (Bond Insigt).
Marketing went into three different types of loyalty systems over the last 40 years:
- Loyalty 1.0: “with this membership card: buy 2 icecremas, have 3”. Convenience focused on the consumer, no engagement from the very first step to the moment of conclusion.
- Loyalty 2.0: “we know you are interested in sport, enjoy a free personal trainer lesson just because it’s your birthday”. Personalization of the message and profiling of interests. The problem has become the excessive presence of similar promotional messages in our email accounts, smartphones and social media profiles.
- Loyalty 3.0: motivation, big data and gamification create a completely different scenario, giving the possibility to involve customers in a targeted and flexible way, putting them in the center of a true relationship with the brand.
92% of consumers trust a personalized proposal that they feel they can receive through a “conversation” with the brand, against about 40% of those who trust traditional advertising.
We are overwelmed by email, messages and ads; companies must create engagement with customers, to prevent messages and conversations about the brand from being lost in the noise.
What does this mean? It means:
- to create an emotional connection with the brand
- to activate people’s participation and involve them
- to think of long-term relationships, trust and loyalty (in both ways)
Technology gives us the ability to communicate, work, play and socialize in many different ways. The number of information and data produced by these relations is enormous and allows companies to understand, motivate, attract, engage and enhance relationships with customers, collaborators and partners.
The correct use of data, combined with motivation and gamification techniques, creates the perfect conditions to enhancing the value of brand customer loyalty.
Forbes says that in the current scenario loyalty programs can still drive market share, but they must be easy to access, relevant according to industry trends and be able to attract modern digital consumers.
Why does the logic of the game (and gamification) work for this?
Gamification is a powerful boost for loyalty programs: KPMG states that 80% of consumers prefer a system of unexpected surprises and privileges that are flexible and dynamic, compared to a path already written and with forced steps to be achieved.
In a world where you spend hours fighting against green pigs in Angry Birds, while building barries against classic growth programs, it is easy to see how branded companies have to prepare new tools to motivate people and increase their growth.
Gamification should achieves this: users, through their own experience, build and personalize loyalty program. Prizes, “unlocked levels” and benefits are built around the experience, making them live the engagement with the brand in a motivating way.
It’s time to move from a mercenary-loyalty, in which the user is faithful to his own convenience, to a cult-loyalty, in which a win-win relationship is created.
This means that building a relationship of trust and loyalty is a very strong goal that companies must set towards their own public, organization and stakeholders (suppliers, collaborators). The importance of such an approach influences the dynamics of business, taking into account the relationship that is created between the brand/company and its interlocutors. An example? 70% of employees do not have any kind of engagement with their job, they go there because they “have to” (Gallup surveys). It means loss in productivity, it means money.
Motivation, less elasticity of demand, better sales results, as well as lower employment turnover and greater involvement are just some of the advantages that can be achieved thanks to the strength of loyalty programs permitted by technology and the application of gaming dynamics (gamification).