How to Build Customer Loyalty

by: Nichole Gunn June 30, 2014

When loyalty programs first entered the marketplace, they were rare, diverse, and few companies offered them. They were like a breath of fresh air because they finally gave companies a way to build quality relationships with customers. Fast-forward thirty years later, customer loyalty programs are everywhere. But, through the years, the trend has sadly been to take the focus off of building real customer loyalty and place it on generating discounts. Companies spend more money creating discounts than almost anything else, which means they’ve lost their way. This is not what these programs were created for. They were designed to create long-lasting relationships between a company and its customers, and to bring value to each party involved in the customer loyalty program. So how do we get back on track and build customer loyalty the right way?

Incentive program administrators and the incentive industry in general need to adapt a new attitude toward building real customer loyalty by focusing on an experience that alters your customers’ emotions and behaviors toward your products and services. An experience is a complete package, and a customer loyalty program is just one ingredient in the recipe. You don’t bake a cake and expect the eggs to do all the work, so you shouldn’t expect a customer loyalty program to prop up all other areas of your business that need to be functioning properly.

But what does real loyalty look like and where does it come from?

Your customers will return to your business and remain loyal as long as they understand your brand’s promise; you deliver on that promise every time; and the end of every transaction is regarded as a positive and enjoyable experience. It can’t just be satisfactory, it has to be positive and enjoyable or your competitor’s may sweep them away from you. Obviously, you can’t depend on a customer loyalty program to do all of this for you.

How do you create a complete customer experience?

The first thing you need to do is evaluate your business from your customer’s perspective. Find out what’s likeable about your business and what may be causing your customers to go elsewhere. If you operate a warehouse, do your customers feel like they have to just stand around while you get their product? Or if you’re shipping to them, is there any way you could enhance your packaging or associated paperwork to be more inviting and personal? These are the kinds of things you have to evaluate to build a real experience. If you have a loyalty program in place, this is also a great time to evaluate its place in your customers’ day. Is it a burden and difficult to log into or navigate? Is the method of earning and receiving points straightforward and simple? The slightest speed bump or inconvenience can quickly sour an experience for a customer, even if it’s the load time on your reward program’s website.

The next thing you do is evaluate how you and your staff communicate with your customers. Do your customers feel like they have a voice in your “relationship,” or do they feel like you’re the one who does all the talking? Opening up a two-way line of communication can greatly increase the loyalty your customers feel toward your brand. Nobody wants to be in a relationship with someone who only talks about themselves, so don’t expect your customers to feel any differently. Also, giving your customers a “voice” in your company makes them feel invested. When you feel invested in something, especially a business, you’re more likely to continue your involvement with it.

If you do have a customer loyalty program in place, ensure that your reward mix is appropriate for the business your customers are giving you. If they’re spending tens of thousands of dollars with you and you give them a watch or the equivalent in points in return, chances are they’re not having an optimal experience with your business. At Loyaltyworks we understand the reward mix is crucial to the experience of a loyalty program, which is why we’ve tried to build a reward catalog that appeals to everyone. If the reward you offer for the business received is unbalanced, your customers may feel shorted and could go to your competition.

If you take these suggestions into consideration and attempt to imagine and rebuild how your customers’ interactions with you go, then it’s likely that they’ll have a much more positive experience and will remain truly loyal to you in the future.

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About Nichole Gunn

Nichole Gunn is the VP of Marketing at Incentive Solutions, an Atlanta-based incentive company that delivers advanced, agile B2B customer loyalty and channel sales incentives programs.