Loyal, engaged customers are the bedrock of any successful business. Implementing strategies to nurture and reward those relationships helps deliver a standout customer experience, while prioritizing customer retention allows you to increase their lifetime value.
Brands want customers who would rather drive across town to their location than support a competitor. Customers who click “subscribe” so they never miss an opportunity. Customers excited to download their app—and encourage others to do the same. They want customers who connect emotionally with their brand.
The good news? Well-designed loyalty and engagement solutions can get you there.
Creating stronger customer relationships allows brands to better understand what matters most to customers and how to deliver on their expectations. Their feedback helps organizations align on all aspects of the customer experience to offer best-in-industry products and services. Which, in turn, keeps customers coming back again and again. (And talking you up. Word-of-mouth referrals are an excellent source of new business.)
So how do you choose between creating a customer loyalty or engagement program? We’ll outline the differences between the program types and offer strategies and considerations for companies looking to launch a customer retention solution. But we won’t bury the lede: The best programs combine aspects of both to create emotional connections with customers, wherever they are in their journey with the brand.
Differentiating Customer Loyalty & Engagement Programs
Loyalty and engagement programs are marketing strategies that encourage customers to purchase or participate in brand offerings. The key difference between the two is in the approach.
Customer loyalty programs focus on driving purchases and frequency of purchase, often through awards. These transactional tactics might look like offering frequent flyer miles and exclusive airport lounge access, special discounts and coupons, or early access to products.
Key Strategies
- Focus on driving frequency of purchase and incremental spend
- Clearly define the benefits and awards offered to customers
- Personalize the awards and offers based on customer behavior and preferences
- Make it easy for customers to redeem awards and track their progress
- Offer exclusive benefits and experiences to loyalty program members
- Continuously communicate and promote the program to customers
- Collect and use customer data to improve the program over time
Customer engagement programs focus on nurturing the relationship in order to create a deeper emotional connection with customers, building advocacy for your brand. Think: A post-flight personalized thank you note, an unexpected gift, virtual communities and special event opportunities.
Key strategies
- Focus on driving the key behaviors from customers that lead to incremental customer value
- Set clear goals and objectives
- Understand your audience and their needs
- Provide valuable content, awards or experiences
- Use multiple channels to reach your audience
- Encourage two-way communication and feedback
Traditional programs silo these two approach types. Yet anyone who has owned a dog knows you can’t buy loyalty. (Treats do help, though!) Not to compare customers and canines, but coupons only go so far in earning genuine brand affinity.
Integrating Customer Retention Approaches for Maximum Benefit
Integrating aspects from each approach holds many benefits. Businesses can improve customer satisfaction and build brand ambassadors by rewarding reliable customers and encouraging them to engage more frequently with a business. Loyalty programs typically reward repeat purchases, while engagement programs aim to increase customer brand interactions through activities, experiences and awards. Taking a more holistic, data-driven and relationship-centric approach drives measurable outcomes.
Related: Read how a building supply retailer used loyalty and engagement strategies to achieve 187% greater purchases by targeted customers vs. non-targeted.
ITA Group helps organizations use data to understand, redirect and amplify their loyalty and engagement programs. Our goal is to help you truly connect with customers. This requires:
- Brand differentiation and customer engagement strategies
- A technology solution that facilitates the program
- Assistance to manage the day-to-day business of a program
- Collecting and acting on data to deliver rewards your customers value
- Going beyond digital-only tactics to deliver unique experiences for your customers
- Continuously improving and adjusting your approach
- Measuring and analyzing the success of your program
The time it takes to recognize results from a loyalty or engagement program can vary depending on several factors, such as the program's design and the target audience. Designing programs that deliver begins with identifying program KPIs and goals.
Implementing Customer Loyalty & Engagement Programs
- Define your organization’s goals and the target audience for your loyalty and/or engagement programs
- Research and analyze competitors' programs, and determine the resources and budget needed for implementation and ongoing management
- Factor in the technology or platform you’ll use to track and measure program success, and the types of awards or incentives that will be offered
- Gather insights from customers through surveys and focus groups to determine what awards are relevant to them
- Use data analysis around redemption patterns and purchasing behavior to understand the loyalty program aspects most important to customer to then deliver a more personalized customer experience
- Listen for their challenges and make improvements accordingly
- Seek out and share testimonials and stories of exceptional customer service to inspire even more brand-building behavior
Taking your loyalty and/or engagement programs to the next level is easier with expert support. Ready to explore your options? Find your ideal customer experience solution.