The changing face of customer loyalty
With the explosion of social media, loyalty has evolved. Consumers now shop differently, interact with brands differently, and transactions are very fast paced. The instant nature of social media means that when it comes to loyalty schemes, customers no longer want to accumulate points over a long period of time, according to by Stuart Evans, UK general manager for customer loyalty firm ICLP.
For this reason, it's crucial that we separate the concept of loyalty from purchases, in this new era of relationships with brands. If a customer has to essentially pay to receive a benefit, then it is really no more than a bribe to keep them coming back. If a reward is free, it's more of a 'thank you' for what they have already done.
This new behaviour brought about by social media, is creating new emerging consumer needs. The desire to be recognised, share opinions and information and the need to be part of groups is bringing a new 'fourth dimension' to loyalty marketing – building on the brand, product and relationship marketing it has been based on up until now.
Think about today's customer needs:
- I want to be involved;
- I want to be social;
- I want to be seen to have opinions;
- I want to be seen to be doing good things.
These customer needs have only truly developed in the last couple of years. As marketers, we have to understand what is driving those needs and look at social space alongside the other aspects of marketing.
This doesn't mean we have to discount the traditional points and rewards based loyalty programmes; we just need to build on them, as brands such as Play.com and Costa Coffee have done recently.
Brands must find ways to reward customers for different types of interactions. Whether a fan consumes a brand's content, shares it with others or creates new content for the brand, their interaction is valuable in different ways and should be rewarded.
We're already seeing some brands realise this but it'll be interesting to see how other brands follow suit in the months to come.