It’s a bit like being in a relationship
But the commitment is to a brand. Just as in a relationship people trust each other to be together even if there’s other potential partners, loyal customers choose a brand even if there are cheaper or more convenient options. The reason for this attachment is mainly trust, but also things like excellent customer service, intergenerational preference, or a personalized shopping experience.
What is a Loyalty Program?
Brands want you. And they want you to come back again and again. A loyalty program is meant to make a brand a customer’s favorite. The incentives to turn a customer into a frequent customer can be in the form of rewards, discounts, VIP treatment, or other kinds of promotions. Thanks to loyalty programs, brands can take a purchase further, and can build a relationship with their consumers. Let’s say you walk into a store and see the perfect pair of sneakers, so you purchase them. In return, you get a loyalty card which lets you know about exclusive in-store events. A few days later you receive an email mentioning that an artist will be in-store to customize new and recently bought shoes. You might not need personalized shoes, but you like that the store offers you an extra perk for being their customer. In this case, the store did not necessarily expect the customer to buy more sneakers, but it wanted to give a special treatment to build on customer trust and preferences.
How is this different from a Rewards Program:
Loyalty programs are aimed at keeping consumers loyal to a brand, while rewards programs are geared towards facilitating consumers to repeat purchases from the same brand. One is more about trust and sticking to a brand’s values (thus, the word "loyal"), while the other is more about recurrent purchases. Both of these programs have aspects of the other, but the end goal is slightly different. Tiered programs which offer different benefits at various status levels are a good example of a program that is both loyalty and rewards oriented. While the motivation to “move up” status leads to purchases, it also ensures that the customer is acquainted with the brand and trusts it.
How to choose loyalty programs:
Loyalty programs used to be dedicated to single brands, but it has now become common practice for these programs to cover multiple services, brands, and industries. An example is Bits of Stock, where one can choose all of one’s favorite brands and become a loyal customer to the products one already use.
Why will your future self thank you?
The brands we buy into say a lot about ourselves. Brands have responsibilities over matters that we care about, such as climate change or charitable donations. By becoming loyal to a certain brand, one can make a conscious decision to also share its values. Because of this, it is important for customers to build a relationship with the brands they love, so that they can interact and become part of each other’s futures. Fractional shares are one of the best ways to become an active customer to a brand, as one turns from a customer to an owner, leading the way for a new age of loyalty programs.
- A loyal customer is worth 10X their first purchase.
2. Howard Schulz on loyalty: “If people believe they share values with a company, they will stay loyal to the brand”.
3. Brands have personalities too! They have 5 traits: sincerity, ruggedness, competence, sophistication and excitement. What's your favorite brand's personality?