Growth MarketingStrategy and Innovation

How to create loyal customers: know me & tell me

In case you missed the memo, customer loyalty can drive profitability and growth for your business. Not only can creating loyal customers promote word-of-mouth marketing to increase customer acquisition, but also drive repeat purchases over time and thus improve their customer lifetime value.

To reiterate, loyalty experiences are not equivalent to loyalty rewards programs. In my introductory post, I proposed four key themes to consider in order to design an engaging loyalty experience:

  • Know Me - Customer Recognition
  • Tell Me - Transparency
  • Let Me - Empowerment
  • Value Me - Reward Loyalty

It’s time to dive into the first two of these key themes.

Know Me - Customer Recognition

While loyalty programs are dependent on being able to recognize a unique customer, loyalty experiences help create a deeper understanding of your customers beyond their names and email addresses. Why are they engaging with your business? What are they looking for? What do they like or dislike? What is incentivizing their interaction?

Understanding customers at a deeper level can provide opportunities to provide personalized experiences. Personalization is a powerful method to keep customers engaged with your business because it can ensure that you’re getting the right content to the right audience, at the right time, at the right place.

So how do you get to know a customer? Just like any other relationship, there are fundamentally two ways to help understand someone:

  1. What they do (i.e. behavioral analytics)
  2. What they share (i.e. surveys, forms, geolocation, etc.)

Leveraging a careful balance between the two is key. Behavioral analytics is a powerful way to generate personalized content - such as content recommendations based on browsing history. We have all seen the top apps (such as Amazon, YouTube, Netflix, and Spotify) provide personalized recommendations to the customer, but it exists in a wide variety of other apps as well - from travel to retail to entertainment. loyalty 1 1 Nordstrom’s app greets you with a “For You” page with personalized content based on past shopping history.

Surveys and geolocational data, on the other hand, can often be technologically easier to implement, but harder to incentivize from a customer’s perspective. Why should customers fill out long surveys about themselves, or allow businesses to have access to their location information? In order for customers to consent, there must be a clear perception of value. loyalty 1 2 Nordstrom asks for location permissions by explaining how it could be leveraged to determine valuable information.

This transitions us to the next key theme, Tell Me.

Tell Me - Transparency

Loyalty is a living relationship between the customer and the business, built upon a foundation of trust and expectations. Build trust with customers by being transparent about:

  1. What information is saved
  2. How it will benefit customers

For example, why is the customer’s gender information being saved? How does this help the customer? Warby Parker does an excellent job at prompting customers to participate with them, with full transparency on how their information will be used: loyalty 1 3 Warby Parker explicitly explains why the information is saved, how it helps the customer’s experience, and how to revise it later if needed. loyalty 1 4 While all iOS apps are required to prompt the customer to allow push notifications, Warby Parker creates a custom notice to describe what their push notifications consist of - with a personal promise to not be “annoying about it” - before pulling up the system dialog.

If your business has a formal rewards program, be sure to communicate how the program works and how it can benefit the customers. How can the program help customers? How are points earned and used? How many points do they have? How many points are needed to reach the next tier? In addition to making all of the customer’s rewards information easily accessible, leave breadcrumbs to remind customers of their program progression whenever they interact with your business. If conditions apply in your rewards program, be sure to lay them out in an easily understandable manner. loyalty 1 5 DSW prominently displays relevant reward items, rewards progression, and next steps towards the next rewards in one glance.

As customers engage with you - regardless if it’s for the first time, or for the hundredth time - it is always important to demonstrate how your business can provide value to them. It is equally important to tell them how you will be able to provide additional value to customers by allowing you to know them.

Stay tuned for future posts about the remaining two key themes of our loyalty experiences framework - Let Me and Value Me.

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