How making customers feel special is keeping them loyal
Everyone likes to feel special. But with a rising standard of living and widespread availability of trendy and luxury products, many traditional status symbol brands are losing their luster – and elite customers who once felt special are feeling less warm and fuzzy.
With this trend in commoditization of traditional luxury items, brand marketers are exploring tiered loyalty as a way to reaffirm their status through personal experiences and exclusive rewards for top customers.
The shift is in part driven by research that shows 3 in 4 customers say they're motivated to continue using loyalty programs for all the relevant rewards and offers they receive – and that more than 1 in 4 rank member exclusives as one of their most appealing rewards.
Airlines, which have long faced the challenges of commoditization, are already masters in the art of experience-based recognition, offering exclusive seating, free checked luggage lounges and priorities to their best customers.
Luxury brands, however, aren't the only ones exploring tiered loyalty. In fact, with 78% of millennials saying they prefer spending on memorable and engaging experiences over tangible products, marketers like Nike and The North Face are designing exclusive membership programs that earn experiential currency – for instance, redeemable points for participating in local activities or customized shoe designs based on customers' photos sent through social media.
Others are exploring enhancing their loyalty programs to include gifts with purchase and quality birthday gift treats to high-value customers, particularly those targeting the ever-elusive Millennial shoppers. And still others are dipping into the vault of tried and tested old-school marketing to offer surprise and delight offers for long-time customers, including free samples and special discounts. The bonus is that these tried and tested tactics are NEW to Millennials and the now emerging Generation Z and when implemented carefully can provide that unique experience many customers are craving no matter their age.
Finally, to bolster data and insights gathered from their loyalty programs, an increasing number of marketers are offering instant rewards in exchange for additional information supplied by their customers. The key is to not forget to use the data to enhance the customer experience or you risk rolling eyes or forehead smacks, or perhaps worse—declining sales.
For more about the novel ways marketers are using tiered exclusivity and experiences to impress and retain customers – as well as other trends to watch in 2017, please download the LoyaltyOne 2017 Trendspotter.