Written By | LS Retail
4 steps to creating your own loyalty strategy
Emotionally loyal customers are, arguably, the most important customer group for retailers. These are the shoppers who care about your message and vision, who are interested in connecting to like-minded people, and who will stick with you long-term, supporting your brands through good and hard times.
According to research by the Harvard Business Review, highly emotional customers buy their favorite brand 82% of cases. To make a comparison, people whose shopping behavior is not driven by emotions tend to switch brand allegiance in 62% of cases. These shoppers choose products based not on past experiences, but on what currently fulfills their needs.
Nevertheless, emotional loyalty comes at a price. These are customers who want to feel appreciated, and expect to be recognized by their favorite brands. And since all customers are not the same, you must implement differentiated loyalty strategies that take into account your customers’ different personality types, and make them all feel acknowledged and important.
Finding the right triggers
The goal of a successful loyalty strategy is to build a tight bond between motivational motivators (the feelings that push your customers to buy) and actual purchase behavior. Different types of retailers will have different motivators. These, in turn, can trigger different consumer personality types.
For instance, a furniture store may accelerate purchasing behavior with an app that customers can use to visualize furniture into a room. This type of incentive can work well in the home decor sector, but it would not be an effective strategy for a grocery store. At the same time, this incentive may work well for some types of customers, and not be as effective, or appropriate for others. What defines a successful loyalty strategy strongly depends on the category you operate in, the brands you sell, your customer engagement, and even where each customer is in the customer journey.
Follow the journey
The customer journey is the name given to the sum of each customer’s experiences and interactions with a brand or retailer, starting from discovery and finishing with the decision to purchase. Different customers can have different journeys, and varied needs. For example, a wealthy couple looking for new furniture may prefer getting personal assistance in-store instead of using a standardized app. On the other hand, a young couple who thoroughly researched sofa options before entering the store may not be looking for advice. Instead, they might be interested in ways to save time and money while completing the purchase of an item they already selected. For them, quick service and a small discount would be preferable over personalized service.
On top of all this, you must also consider that as the journey progresses, and customers get more knowledgeable about the various options in the market and how they fit their requirements, the customer’s needs change.
So how can you satisfy customers in different moments of their journey, and make them feel special every step of the way? Although it looks very complicated, there are a few characteristics and demands consumers share. Here are four must-dos that will help you tie emotionally involved customers to your business, wherever they are in their journey.
- Create unique shopping experiences. Unify your efforts across channels. Deliver an in-store adventure with the help of your sales associates, stay in touch with personalized content via email, and keep the communication channels open on social media. The goal is to maintain constant interaction with customers, identify their needs, and give them targeted information and advice. Technology like a clienteling Point of Sale device can help you storefront staff deliver individual recommendations and personalized information on every product, easily.
- Design individualized loyalty programs. Emotionally loyal customers expect targeted content and offers, and forward-thinking retailers are already using customer data to deliver this. For example, Zalando’s fashion stylist can create personalized outfits using each customer’s shopping history. A unique selection of clothes is sent to the customer’s home alongside the stylist’s name, a hand-written signature, and a picture. This level of curation and attention to detail has really succeeded in making customers feel acknowledged and important. In return, they repay Zalando with their trust – and continued business.
- Build a community with friend referrals. Show your emotionally loyal customers that you value them, and grow your community at the same time. For example, you could grant customers a small discount or a special gift if they send friends your way. This is an easy win-win, as you can expand your customer base while making your current customers feel important. Need more reasons? Research by Nielsen shows that referred consumers are more likely to turn into emotionally loyal customers of your brand.
- Make use of your community. User-generated content (think product ratings, reviews, or customer posts) can be really effective. According to Nielsen data, 84% of consumers say they trust peer recommendations above branded advertising. And Sprout Social reports that 3 out of 4 consumers rely on social media for their purchasing decisions. Provide customers with a platform to speak: it will make them feel listened to, and pay you extra dividends.
When planning your loyalty strategy, remember that 95% of customers’ decisions are triggered subconsciously by emotions. To elicit the right emotions, consider the four points above, and don’t forget to add moments that will bring surprise and delight.
By creating an emotional connection, you can really impact shopping behavior. The dopamine rush, and relative good feelings, that you trigger will make your customers eager to repeat the experience as often as possible. To better achieve this effect, you should always offer direct rewards – that is, let gifts follow actions straight away. Meaning, offer customers an extra gift as they are purchasing a certain item, rather than sending them the gift a few weeks later.
Learning from the leaders
Some brands are masters at using emotions to tie customers to their business. Take, for instance, these four brands which operate in different sectors, but are all as successful in creating emotional loyalty: Disney, TOMS Shoes, Dove, and Coca Cola.
- Across its whole empire of entertainment (think films, amusement parks, clothing lines, and more), Disney has successfully aligned the customer experience with its brand values and culture. For a big community of fans, the world of Disney embodies all that’s best about childhood – imagination, happiness, friendship, and living happily ever after. When customers shop Disney products, watch Disney films, visit the parks, these emotions are awakened, making customers eager to get more.
- For every pair of shoes sold, TOMS Shoes gives another pair to charity. With this business model, TOMS has managed to attract a large following of very loyal fans, who have become (and stayed) emotionally tied to the brand due to TOMS strong storytelling, constant commitment across channels, and visible social impact.
- Dove has managed to build deep trust with a varied community by using everyday women in their marketing campaigns. This breaking the schemes has helped consumers better relate to the products, and helped create a group of fiercely loyal shoppers, who feel represented by the brand.
- Coca Cola doesn’t just sell drinks: primarily, it sells happiness, joy, and the feeling of being together with friends. By successfully attaching the brand identity to these very positive emotions, Coca Cola has managed to establish its products as the must-have drinks for moments of celebration, such as holidays, birthdays, and special occasions.
Emotionally invested customers pay off
According to Harvard Business Review, emotional customers are more valuable than even some of your most satisfied customers. Emotional customers:
- buy more products and retail services
- visit your stores more often
- are less price-sensitive
- follow your advice
- spread the word, and refer your brand to others
As you enact your loyalty strategy, try to keep the right balance between actions aimed at attracting new customers and making them emotionally loyal on the one hand, and retention strategies to keep current customers happy on the other hand. Finding the right equilibrium between building a new brand of fans and maintaining current ones is key to keep your brand thriving through easy and tough times.