Is emotion in a loyalty program a necessity or a waste of time?

An analysis of foreign retailers has shown that traditional loyalty programs focus on impersonality.
They work like this: customers earn points, exchange them for cash, and repeat the cycle.

Consumers actually wander from offer to offer, switching to a more interesting option from a competitor at the first opportunity.

But customers are changing their priorities, growing along with businesses, and setting higher expectations than before. And the abundance of loyalty programs makes customers demanding and a bit spoiled.

Therefore, in the future, relationships with brands will have to consist of more stages than a few years ago. People are not only looking for monetary benefits in terms of points or other incentives but also to have a certain emotional connection with the company. To feel that they are seen, heard, and appreciated.

It doesn’t work anymore to just treat a customer as some kind of ID with a set of codes and analytics. And even companies that try to go beyond this by creating sales funnels and CJMs (customer journey maps) increase the engagement of an active audience and collect personal data.

A loyalty program is about managing brand reputation. And it depends on how effectively the business works with it because the rewards are high: increased frequency of purchases, average check, and brand loyalty.

What are the next steps?

Outdated loyalty programs were mainly used to award points after a purchase, which were accumulated on ordinary plastic cards. Customers could forget them, lose them, or even pass them around. The percentage of engagement was very low, and the history of purchases and accruals was not personalized because there was no real identification. And the loyalty card was just another opportunity for the customer to save money on business and get an extra check.

The modern customer wants brands to recognize and reward the actions they take. This can be done by downloading an app or writing a review. The customer is ready to recommend a brand, even on social media, in exchange for a favorable offer.

Therefore, the goal of brands should not be to get people to register on the site or subscribe to the page, but to provide consumers with specific offers and benefits that increase engagement, interaction, and communication with the brand.

The value of your loyalty program should be immediately apparent to each individual customer. Therefore, to keep up with their expectations, it is worth reviewing your existing program and making adjustments or completely changing the approach to its development. It is worth implementing loyalty at all points of interaction with customers (all the way to purchase) and creating a program that is convenient for both consumers and the marketing team.

We ask questions and go looking for answers

• How do we create value for our customers and businesses?
• What values do customers expect, and what is important to them?
• Is it easy for consumers to interact with the brand?
• Do you offer something other than crediting points to your account?
• Is our loyalty program customized for consumers, and does it help achieve other brand goals?
• Are we collecting enough data?
• Is there personalization and a plan to improve it?

What does a modern loyalty program look like?

Today, we are witnessing a rapid expansion of loyalty beyond products and services. Brands with a successful strategy and a well-thought-out customer engagement plan ensure loyalty to the entire company, from staff to the merchandising team. If the strategy is well thought out from all sides, then the customer feels an emotional connection with the brand and, in 96% of cases, remains a regular customer. And if the brand really creates an emotional connection with the customer, they are not interested in competitors’ offers.

“Working with loyalty is a constant work that cannot stop. You can receive good reviews and make customers loyal for 4 months, and then make a mistake once, get a hit, and all the previous work will come to naught. It’s important not only to maintain good reviews but also to be able to work with negative ones, because one negative one can ruin all the work with positive ones,” says Evgeniy Vasylenko, CMO of Uployal.

This is not social media advertising that you can just turn off for a week and think about how to change after analyzing the previous period. Working with loyalty is an ongoing and important process for all departments, which also requires in-depth analysis and data collection.

Emotional-based loyalty goes deeper than just automatically accrued points.

It means that consumers trust and perceive the brand not only as the products or services they buy but also as a part of their lives and themselves. It is formed from the very beginning—from the first step outside the store, from the clean window on the door, the greeting of the security guard, the cleanliness of the hall, the smile of the cashier—and only then is this experience consolidated by a mobile application with a personalized QR code, purchase history, and pleasant individual birthday bonuses.

Loyalty shouldn’t be formed only for the sake of profit. It is communication; it is a direct connection between the customer and the brand when trust and value are created. And points and percentages from purchases are one of the tools that can strengthen emotional relationships.

Even the simple design of a loyalty program app makes a difference.

What can be included in loyalty programs?

• exclusive personalized offers;
• individual promotions;
• uninterrupted operation of the company, even without electricity and the Internet;
• answering questions 24/7;
• interesting delivery terms;
• preview of the product, description, and current price;
• unexpected offers;
• exclusive access to VIP opportunities;
• gamification and ranks.

These and other options for a personalized approach turn ordinary consumers into active brand advocates. Often, a company can choose an ambassador among them who will bring positive feedback about the brand to the information world and show a real attitude towards customers by example.

“You should strive to provide more than customers expect,” says Sergiy Palahniuk, CEO of Uployal Ukraine, a loyalty program developer for retail and restaurants. “Our clients increase their customers’ engagement by an average of 100% within a year after implementing a loyalty program.”

For example, one of the grocery store chains in Ukraine has had 155,000 active loyalty program users over the past 12 months. Together, they generated 22.6 million loyalty engagements and received more than 9 million push notifications. It is also important to pay attention to the average engagement of one customer during the year, which is 157.92. What does this mean, and why is it important to count it? It means that one customer has been involved in the loyalty program an average of 157.92 times over the past 12 months, which is almost every 2 days.

Loyalty cannot exist without analytics, and we at Uployal not only create it but also help and teach you how to work with it.

And it is after a complete service and strategy upgrade that business owners can say:

“Now that we know every guest of our stores, we understand their needs for goods and services,” said Eduard, co-owner of Mix Mart chain stores.

What do business owners need to implement an effective loyalty program and reach a new level of sales?

First of all, think about and create a strategy for retail loyalty programs. You need personalized, meaningful tools that inspire trust and long-term customer engagement with your brand. The most important element of such a strategy is the ability to combine data and distribute it across all company channels. This feature will help you create a complete profile of each customer and get an overview of all the actions they take with the company. Loyalty programs complement these profiles with the critical data needed to interact with customers at multiple points. The information gained from these interactions can then be used to further personalize, customize, or create unique offers for the customer.

Also:

• Unify data in real time. We know that more consistent, personalized shopping customer experiences  make customers happier and more loyal. After all, as we mentioned earlier, people want customized offers and enhanced service features. The CDP platform is suitable for this purpose. These are personalized product recommendations on the website and in messages that help automate marketing. CDP (customer data platform) can also be used to exchange data from other sources, such as marketing clouds, service software, e-commerce mechanisms, etc. It also matches data about registered customers in real time—email and phone numbers—with anonymous cookies and mobile device identifiers. This will help to create a complete picture of how the customer uses the site. And see it in real time.
• Create instant impressions. Creating unified customer identification profiles and then making this status data available in real time allows each department to act on customer behavior at the moment. This means that things like loyalty points are instantly updated, and company employees instantly know when a purchase triggers a jump in loyalty levels or status. These tools also simplify behind-the-scenes activities. For example, systems such as email senders, demand platforms, and content management systems can use real-time data to refine customer segmentation and create personalized offers.
• Integrate loyalty and data strategies on a single platform. Today, building a data strategy does not require a complete overhaul of existing technology systems. Modern marketing platforms with application programming interfaces (APIs) connect to existing recording systems through digital and physical access points, so you can collect first-person data at any time.
• Connect your loyalty system to the global one. A modern data platform allows you to access any audience segments and statistics, such as RFM score, customer status, and duration of interaction with the brand. This allows for a broader view of the situation and a timely response to critical incidents. For example, to restore services, access, and provide offers and promotions individually, In this way, each brand’s customer will feel important, as if your service was created only for them. And this increases loyalty at times.
• Transparency of company rules and intentions regarding the use of personal data. One of the main components of loyalty is honesty toward the consumer. Companies should be attentive to customer data and keep it safe from leakage. This way, consumers will have the right impression of the brand as a reliable and safe company. As a result, customers of such an organization will not only be more likely to share their data with it but will also remain loyal, make additional purchases, and recommend the brand to friends and family. A strong, transparent data strategy turns loyalty into a guiding principle that operates throughout the organization.
• Create long-term value for your business. When a loyalty program works well, it not only strengthens customer relationships but also improves the bottom line. This is especially important in the current economic environment. After all, it allows you to give the consumer profitable, pleasant rewards at no extra cost to the company. In turn, this will help reduce margin pressure, which mostly arises from the introduction of discounts and cashback. By the way, retaining existing customers is also more profitable for companies, as it costs 6-7 times less than attracting new ones.
• Bring new offers to the market that will increase loyalty. In the past, individual loyalty programs required significant investments and took years to deploy, which often led to the outdated functioning of some services and approaches to the customer. This definitely doesn’t work in today’s world and doesn’t help a brand build a sustainable market leadership position. Frantic market dynamics, changing consumer preferences, and competitive pressures require that brands be able to easily and continuously develop their loyalty programs without having to undertake a large-scale IT project every time.

How does the Uployal loyalty program work?

“Our number one job as marketers is to build and deepen relationships with our customers. And we do this through relevant, personalized experiences. We now know our customers, anticipate their needs, and deliver exactly what they are looking for.” This is the feedback the Uployal team received from the store chain’s marketer, Serhiy, after a few months of using the loyalty program we developed.

Today, the All Retail team helps brands create loyalty programs that stand out:

• Personalization of offers and rewards in real time through online and offline channels using marketing automation tools
• The ability to use CDP for surveys and reviews to strengthen the connection between the customer and the brand.
• Flexibility of the rules system, which will allow the brand team to track customer activity and individually award points. And also automated consumer involvement in the accumulation system without unnecessary authorizations.
• Intelligently designed surveys that analyze emotional loyalty and customer satisfaction at a particular moment (with the additional ability to analyze customer sentiment)
• Forecasting tools based on artificial intelligence and machine learning with the ability to calculate advertising ROI with “what if” analysis will ensure the constant achievement of program goals.
• A user-friendly management system for attracting new customers to the loyalty program and expanding offers beyond the brand.
   

Rethink the future of customer loyalty.

We realized that to be successful, you need to create the most personalized experience on the platform that is relevant to your customers. So our partnership with Salesforce allows you to see your customers across all the different touchpoints and then use the data behind them to better understand who your customers are, how to best serve them, and how to do so quickly and globally.

Try implementing a modern loyalty program using a user-friendly platform and tools, and watch your customers become part of your extended family.

What is customer experience?

I, as a buyer, got a new positive experience from using the new mobile application of my favourite bank. More recently, the bank updated its application, added new features, improved usability, made a more convenient menu, increased speed and added cash back. I have a great experience, I have been using all this for several months now and I am getting used to it. This is a financial instrument that my bank gives me, in which I receive financial services, but which go through my active interaction with the mobile application.

That is, in this case, I, as a buyer, receiving financial services, interact through a communication channel (or interaction tool) – through a mobile application.

Now I will continue my journey as a customer and go to buy my other goods and services. Now I’m moving to a regular supermarket. Yes, the same one that I have also been visiting for many years – it is very close – on the way from the office to the side of the house. I know many cashiers in it, I learned the shelf in the store a long time ago and I know when fresh mango is delivered). So, I’m in the store, filled my shopping cart and go to the checkout – and then something new – yes, yes – this is a new banner right at the checkout with a QR code and beautiful text – now we have our own mobile application where you you can not only see our current prices, but also get cashback, save your purchase history, accumulate points and find all our stores in your city on the map. Wow Wow!

It’s probably cool! It sounds very nice and inspiring. I haven’t seen anything like this in other stores around here. Well, let’s join!

Mobile app interactions

By scanning the QR code, I install the application, I wait for an SMS on my mobile phone to enter the application (something is taking a long time ..), there is a queue, a cash register, but there is still no SMS. Okay, I’ll fix it later. I pay as always, a little disappointed that I could not install the application, I go home.

In the evening, at dinner, SMS still comes (well, such an experience – 40 minutes late)

Well, ok, I forgot about it – I’m installing – because ahead of me is an exciting journey through the application and the pleasure of the experience. Yes, I did it – now I have a new, already 65th application on my smartphone.

I quickly ran through the menu – some kind of weak and small, everything seems to be fine, but something is not right.

Operating with cash-back

Yes, cashback works, there is a purchase history, you can see the current prices.

But still, something is missing, something is wrong in this loyalty app. And here comes the idea that I, as a buyer of bread in a store, compare my experience of interacting with the bank’s mobile application. It would seem that there is nothing in common between financial services and retail store services.

There is milk and bread, and there is the payment of utilities and rent. And yet there is a connection – it is just in the buyer’s mobile phone. For him, a mobile phone and a mobile application is a tool for interaction and feedback with businesses – of all kinds and types. He gets used to interacting with offers and services through a mobile application, he gets used to convenience, speed and support. And he buys milk, bread or conducts financial services – this is not so important.

Because in every purchase of something there is a certain percentage of the service and emotions – as part of the customer experience, his perception of the brand, product or service.

He understands that the quality of bread can be the same in many stores, its composition and taste. But he knows for sure that communication at the checkout, hello from the security guard or the speed of downloading the application and the relevance of prices in it – these are all his experiences, which he transfers to other areas of his life.

Conclusions

Therefore, when we talk about customer experience in loyalty programs, for example, for retail or restaurants, it is important to take into account the customer experience of the buyer in other areas of his life, given that a mobile application is one of the important tools and channels for interaction and communication with the brand and its services.

After all, the percentage of emotions and impressions is very different depending on the product that we buy. Buying a regular pencil or a pack of paper is unlikely to bring any emotion, but searching on a smartphone, talking to support, app download speed is very important even with this purchase, because it is part of the purchase. One of the important tasks of a marketer who implements a loyalty program in a business is to understand what percentage of the impression is on the client’s path from the need and desire to buy to enjoying the purchase itself and using it.