Effective Loyalty Programs are Founded on Customer Experience

rDialogue recently attended CRMC in Chicago along with a number of clients and industry friends. We heard from many wonderful speakers including Barnes & Noble, Jeff Klein from Harry’s (and Warby Parker), Luxottica, Ted Rubin and our client Valentino Vettori from Century 21 Department Stores.

We had two fundamental takeaways, both reinforcing what we have been promoting for some time. More precisely, since we named our firm rDialogue as a way to extend the idea of Relevant Dialogue.

Our first takeaway reinforces the simple premise that effective customer loyalty comes from a customer’s experience with your brand. This interaction is crucial in defining whether or not a person will be a one-time customer or a life-long customer.

Effective loyalty programs are crucial to this experience, but for customers (and the brands that sponsor the programs), are often too complicated to understand (or manage) or don’t pay off soon enough. For companies, there is too much focus on the “program” rather than how the program fits into the rest of their business, including their brand and how that adds up to delivering an experience to customers. The best approach for effective loyalty marketing is to keep it simple and offer a clear value proposition upfront. Make sure that your customer understands the benefits of being exclusive to your brand—and make them feel appreciated and empowered for doing so.

The other takeaway and tenet of ours correlates directly from the idea that it’s the brand that either gets credit or is blamed for the customer experience. And that is that loyalty marketing, and creating customer loyalty, starts with the brand demonstrating loyalty to the customer. It’s why we define loyalty marketing simply and specifically as “paying attention to the customers and acting accordingly.”

It’s easy enough to collect data from consumers, but it’s always about how you use it—and it shouldn’t be used hastily or abused in any fashion. Especially for retailers but increasingly for brands across a myriad of industries, data is the primary motivator behind their CRM strategies and investments. That’s all well and good, but it shouldn’t be the be-all-end-all. Customers expect a quid pro quo. Data may tell you who your customers are, but those expectations are for you to understand what they want, and what they want is to feel special.

It’s then up to the brand to determine where to focus, to be more relevant and have customers feel recognized, important and rewarded.

Here are some of our favorite tweets from CRMC. What were yours?

Loyal customers are ambassadors for brands #CRMC2014 — Eugene Borisenko (@EBorisenko) June 5, 2014
"Look people in the eye digitally" Love that! #CRMC2014 — CRMCRetail (@CRMCRetail) June 6, 2014
#CRMC2014 #OmniChannel it's about gaining support at corp. & retail levels to engage customers in a branded experience, relevant to them. — 89 Degrees (@89Degrees) June 5, 2014
#CRMC2014: Lynch, Do it Best: The points are positively, absolutely not the point. It’s not a loyalty program it's a sales-building program. — COLLOQUY (@colloquy) June 5, 2014
@OrchardSupply loyalty uses real data to connect with real people. Focuses on relationships, not just relationship marketing #CRMC2014 — Meg Culp (@megbculp) June 5, 2014
Toys R Us's Ann Pressimone: If I can't sell this loyalty program to a friend at a party, it's too complicated #CRMC2014 — James B. Ray III (@LoyaltyCIO) June 5, 2014
@ToysRUs has the right idea: No program, even if it is the silver bullet, should stay the same because there is so much changing. #CRMC2014 — Meg Culp (@megbculp) June 5, 2014