Four new ways to earn customer loyalty

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Customer loyalty is in decline. Loyalty programs do not work anymore. In fact, everyone agrees most loyalty programs are discount programs. As I described in a previous post about loyalty, I’m not ready to give up on loyalty.

In this post, I would like to share four approaches that can help companies restore the emotional relationship that may result in loyalty.

  1. Customer involvement

When people feel involved, they feel part of a team. The moment people start to think about a certain group, organization or company in terms of ‘we’ and ‘us’, it implies they view themselves as members of this group. Speaking in terms of ‘we’ is always a sign of commitment. Too many people think customer involvement is only about the co-creation of advertising or products, but it goes a lot deeper than that.

Customer involvement can come about in several ways:

  • Crowd funding: when people are co-investorsin a certain company, there is a greater sense of belonging from the get-go.It is a form of financial customer involvement.
  • Crowd service: customers can become service agents for othercustomers. It allows companies to increasethe service offering at a lower cost. At the same time, it creates a senseof belonging and this, in turn, inspires loyalty among the participants.
  • Crowd sourcing: customers are actively involvedin creating new insights for the company’s management. This can lead tothe optimization of existing products or it may prove helpful in thecreation of new products. Crowd sourcing is not just interesting foroptimizing products and service, it may also help create content for othercustomers.
  1. The element ofsurprise

In general, loyalty programs use a very traditional approach. Most of them still implement the ‘buy 10 get 1 for free’ idea. If customers spend enough money they receive a financial reward. As mentioned above, this doesn’t lead to loyalty but to bargain hunting. Panera Bread uses a different approach. In fact, Panera Bread has one of the more successful loyalty programs in the US. Their approach is based on the element of surprise. With the Panera loyalty program you never know what you’ll get. It could be a small present during your next visit to a store but it could also be a hefty discount on a new product. Their consumers really appreciate the serendipity effect. In a recent blog post, Gen Y expert Joeri Van den Bergh wrote about this trend. He concluded that Gen Y consumers are really getting into the serendipity aspect of the relationship. As a brand, we need to surprise our consumers on a regular basis.

  1. Excellence indetails

Customer loyalty is related to the level of customer satisfaction. Too many companies have to settle for 7.2/10 in their satisfaction scores. Companies still manage their customer relationships in silos. The polite word for silos is touch points. Companies manage the various touch points but forget to do the same with the interaction between touch points. A recent McKinsey study showed that the lack of interaction and consistency between channels leads to dissatisfaction. Loyalty is the result of excellence in details. Most companies manage their basic product or service well but they lack control of what lies in between.

  1. True relevance

The new loyalty will come from real value. Customers will be drawn to companies that are able to offer personalized and real-time products and services. Just think of the current hype around Uber. Uber offers a new and highly personalized real-time service.