How do retailers create loyal customers?

Consumers tell us they are more likely to spend more with a particular brand if it has a great loyalty programme and they'd be more likely to visit one retailer over another if a programme gives them a valuable loyalty/engagement programme to join – so seriously, why are so many retailers still launching programmes that don't offer value to the consumer but are simply more 'me too' points-based style loyalty schemes?

I guess it's the go-to, easy option, but let's be clear: it's also the expensive and potentially brand damaging option.

So what are the turn-ons..?

In a super-austere climate, consumers demand to see value from their favourite brands – if they're going to choose you and your loyalty programme, they expect to be totally turned on by its benefits... but what do they want to see? 

High profile rewards are top of the list; consumers tell us that they want to feel like they're getting the best benefits from a brand possible. Second pegging, are lovers of the feel-good factor: they want to initiate a bit of jealousy among their peers, getting exclusive extras just because they are members of the loyalty programme. This is all about spoiling customers with added value or discounts at other brands that might touch their day-to-day lifestyles or adding value to your product or service by providing special access to advanced services for programme members like complimentary gift-wrapping, season previews or testing of new potential products.

Consumers also love a bit of surprise and delight, they want to feel that a brand could surprise them at any moment with a random act of kindness. For your business, incorporating 'random' gifts into your loyalty programme means the sky's the limit – treats like this have the propensity to go viral within minutes and could provide infinite capacity for brand exposure while you're spending smartly on your most loyal and profitable customers.

Points rarely mean prizes

Consumers just aren't as excited by programmes that involve the collection of points – programmes which feature the ongoing collection of reward points, rarely turn them on, it's often the immediacy of redemptions which customers suggest is the issue with the points-make-prizes model, they simply never remember what they spent their tiny amount of money off on and don't value it as everyone's doing it AND it takes forever to collate.

Communication is crucial... It's a very delicate balancing act. Consumers do not want to be hassled by over-frequent communications a couple of times per month with the right message is enough.

Keeping it relevant is key: if you're going to send out mass, generalised communications just don't bother! Consumers like relevant, tangible, good communication that doesn't seem invasive. Loyalty is about generating goodwill through customer service and knowing your customer, putting them at the heart of what you do.

Get rewarding...

Money-off vouchers can get people excited if they are spontaneous to the customer (and data driven of course), but be careful not to devalue your brand. Your customers want to receive a decent amount but they know that they've got to show their loyalty to qualify for these benefits – identifying a recommend a friend programme with a large percentage discount off your next purchase is a key reward that's important to them. 

Consumers themselves often state that you may use money-off rewards to drive profitable behaviour orientating rewards around your core business objectives at any given time, whether it be to drive frequency of visit, frequency of spend and beyond! 

Consumers tend to be in favour of the idea of redeeming benefits at other synergistic brands that weave through their lifestyles and they are happy to tell you who their other favourite brands are. Just like flashing your exclusive credit card to receive extra benefits at a retailer or bar, your customers want to receive little treats just because they are loyalty programme members, they often love it when brands involve multiple retailers in redemption options so they can have extra benefits when they're shopping elsewhere too.

Get personal!

For consumers, what is a really crucial aspect of loyalty is the level of personalisation of the programme. They are happy to provide additional personal information to a brand so that they may be contacted personally with reward offers on special occasions of benefits that are personal to them. These could be things like a nice gift or card for a customer's birthday, or contact about their children, lifestyle or even their pets!

Consumers often say they'd like to see super-personalisation like remembering their dress size or styles they are fond of, making it easier for the customer to search through clothes or products they will like online. Wouldn't it be amazing if this could be replicated in store too, using technology to identify a customer as they enter the store and having a member of staff acknowledge who they are and what they like?

Fashion and beauty retailers are in a great position to create community style programmes that can educate, inspire and reward their customers that are fashion, image and style led.

Remember: consumers are your most precious assets, looking after them means keeping them for longer. Consumers are clear that the key to capturing their heart, mind and wallet is by making them feel valued – it's the personal little treats that make them feel special. Don't let points obstruct the intimate view of your customers that makes this achievable.

Sarah Cross is co-founder of British beauty brand CODE Beautiful, and international customer engagement consultant at uber uk.

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CODE Beautiful

uber UK

Sarah Cross