Customer Loyalty

Start with the Customer: Why Loyalty Programs Who Put the Customer First Will Win

Start with the customer

Start with the customer

It sounds simple, but for some reason not every retailer thinks this way. Most retail loyalty programs are formed with generic, impetuous rewards that may be easy and economical for the business to offer.

Then, businesses will attempt to dress up its lackluster rewards to make them appealing to their customer-base.  Get a free something you don’t care about when you buy ten, or save $1 when you spend $100, etc. The all too familiar cycle usually leaves the customer wanting more and the retailer doing the same cyclical dance over and over again.

  • Retailer Marketing Team: We need a rewards program
  • Retailer Finance Team: No, we can’t give that away, how about this
  • Retailer Marketing Team: We need to spend money to acquire members
  • Everyone at Retailer: Watches painfully as program becomes stale
  • Retail Marketing Team: We need more money to engage users
  • Everyone at Retailer: Rinse & Repeat

It’s likely that no one has all the answers to a retailer’s rewards problems, especially when it comes to balancing economic constraints associated with a good program. There is, however, one common theme with retail loyalty programs that are having success.

Start with the customer, keep their interests and needs in mind, and give the program a fighting chance to impact your business. Many of you may have heard of programs like Plenti and Starbucks Rewards, along with platforms like Belly. I’d like to dive into a one or two things each of these have done right when it comes to starting with the customer, things that may not be revolutionary on the surface, but have definitely started with the customer in mind.

Plenti: Consistency across retailers.  Although somewhat limited, the initial group of Plenti merchants makes it easy for customers to earn and burn a single rewards currency at a number of their favorite retailers with very little friction. While it has yet to be proven successful in the US, giving customers a simple $10 for every $1000 reward to earn and spend across retailers shows that Amex is starting with the customer. Everyone loves cash rewards and early successes at retailers who have adopted Plenti prove that monetary focused rewards programs can be successful.

Starbucks (SBUX): Starbucks’ Howard Schultz said it best himself “We need to put ourselves in the shoes of our customers. That is my new battle cry. Live and breathe Starbucks the way our customers do”. That starts with hearing your name called when your order is ready, and has quickly evolved into loyalty program features like status. Starbucks is ahead of the curve in most aspects when it comes to its loyalty program, but one that clearly puts the customer first is their member status feature. Pushing customers to visit 30 times to attain status, then another 30 times within one year to retain it, has customers feeling important and like their favorite brand is putting them first. While these types of incentives and tiers are not unique to Starbucks, making the incentive a personalized achievement clearly shows Starbucks starts with the customer, not with their economics.

Belly: Easy to use and personalized. No platform does a better job of putting the customer first by offering access across multiple channels for the customer and the ability to use the program at thousands of their favorite retail locations.  Rewards customization and features like Auto-Engage keep Belly in the lead among small businesses and popularity is rapidly growing in the Enterprise loyalty space, too – proof that starting with the customer is the way for brands of all sizes to build and maintain loyalty programs that impact their business.

What it means for retailers and customers comes down to two main principles:

  1. Customers will be empowered by technology to make smarter choices, requiring retailers to think about them first in order to keep their business.
  2. Retailers will need to stay ahead of the competition by working with the best technology partners to power their loyalty programs, allowing the retailer to focus on their customer’s needs.

But why wait? Start today with what matters most; YOUR CUSTOMER. Starbucks didn’t wake up last week and decide to come up with status, they put their customer first long before they had a loyalty program. Belly didn’t throw a bunch of ideas against the wall and solicit feedback from their merchants before building tools that put the customer first. We started with that in mind years ago, allowing us the flexibility to always put the customer first.

It’s hard to avoid the harsh reality of the loyalty space in the US where consumers hold memberships in 29 programs, but are active in less than half of them. Start with the customer and make sure that your program is set up to succeed. Avoid the typical cycle that most retailers find themselves in and design your program by starting with your customers, find the right technology partners to power your program, and continue to refine and improve your program to always fit your customers’ needs.

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