Brand Loyalty: Why Customers Aren’t Sticking Around

To create sticky customers, you need the right glue.

If 2020 has you rethinking your customer retention strategy, you’re not alone. A recent Gartner survey found that 79% of CMOs are turning to their existing markets to fuel growth into 2021. 

In the year of so-called “dying brand loyalty,” however, converting your current customers into heart-eyed brand loyalists will be no simple task. An on-demand economy dominated by the likes of Amazon Prime and InstaCart has conditioned consumers to expect low prices and lightning-fast responsiveness; this is currently the lowest bar to entry. Today’s consumer won’t blink twice to abandon a brand in exchange for another that can deliver a better deal, faster. 

In sum: If your current loyalty strategy is based on points or deals alone, it simply won’t be enough to keep your customers from bouncing. We must dig deeper. This is a job for consumer psychology. 

At Revel, we recommend three modern-day strategies that tap into human psyche to motivate not just brand loyalty, but brand fandom: Gamification, Exclusivity, and Personalization. Let’s take a deeper dive into each and explore which brands are doing loyalty right. 

To varying levels of degree, humans are all goal-motivated.

Gamification is defined as applying elements of game play to boost customer motivation, essentially transferring the powers of your Candy Crush addiction into a marketing context. Perhaps the most famous use of gamification to boost loyalty was the McDonald’s Monopoly game. (Raise your hand if you remember eating your weight in McDonald’s during this time.) To varying levels of degree, humans are all goal-motivated. By incorporating gaming mechanics such as tiered status or levels, missions, and progress markers, you too can tap into that motivation to foster deeper engagement and ongoing loyalty.

Zions Bank is using gamification to target Gen Z bankers with their Pays for A’s loyalty program, rewarding students aged 12-18 for good grades. Students with a Zions Bank account receive $1 per A grade. Those without a Zions Bank account can still get in on the action, receiving 50 cents per A. Students with eligible accounts are also entered into drawings to win savings accounts with college money.

The Zions loyalty program is smart for a couple reasons. Firstly, it actively targets the next generation of banking customers and encourages them to open accounts with Zions. Concurrently, it promotes the bank to parents as a result of something that positively benefits their children.

The concept of Exclusivity is based on the premise that all humans have an inherent need for belonging. Remember the time you weren’t included in that happy hour, were left out of a group chat, or in 3rd grade didn’t get an invite to Mikey’s roller skating party? Yeah, being left out hurts. That’s why, in contrast, being included feels so good. And, if you can manage to help your customers feel exclusively included — even better. Rolling out the red carpet for your customers hits on this element of psychology, and can be executed in a variety of ways: 

  • Offering “sneak peeks” of new products, offerings, or exclusive insights
  • Distributing surprise-and-delight extras or freebies
  • Sending invites to exclusive company events 

Casper, the bed-in-a-box foam mattress company who has against-all-odds managed to make mattress shopping feel cool, offered an all-inclusive solar eclipse watch party to a limited-number of fans back in 2017. One ticket included a private eclipse viewing with “special viewing glasses and a spacey soundtrack for your eclipse viewing experience,” according to the event website. Camp Casper offered tents that were outfitted with (what else?) Casper bedding and swag from their brand partners. Various group activities were sponsored by apparel company Outdoor Voices and a movie screening was sponsored by Alamo Drafthouse Cinema. The event provided the ideal environment for people to enjoy a sense of community with like-minded enthusiasts while simultaneously receiving a constant, giant hug from the Casper brand itself. 

Lastly, but certainly not least, is our final strategy for bolstering brand loyalty: Personalization. It’s a concept so obvious that it oftentimes gets overlooked. Data from 2017 revealed that customers believe “offer[ing] personalized rewards” was the top benefit that a brand’s loyalty program should be delivering. As important as personalization is to fostering brand fandom, only 22% of loyalty program members say they are very satisfied with the level of personalization they receive in their current programs, according to a report by Bond. This gap between expectation and reality begets ample opportunity. 

Only 22% of loyalty program members say they are very satisfied with the level of personalization they receive…

Personalization goes far deeper than addressing customers by name at every touchpoint interaction (however, that’s a good place to start if you aren’t doing so already). Personalization is the idea of tailoring your rewards and offerings to your customer’s preferences. It’s putting your data to work in a meaningful way to build better relationships with customers and drive more conversions. It’s sending timely and topical communications to deliver an engaging experience. 

DSW has arguably one of the best loyalty programs out there. Since its inception 30 years ago, DSW has grown their loyalty program to more than 26 million customers. Nearly 30% of those customers have been loyalty members for over 10 years. Despite their track-record of loyalty program success, DSW recognized that they needed to continue to evolve to stay relevant with the expectations of today’s consumer. Julie Roy, DSW’s vice president of CRM, digital, and customer insights and analytics, therefore began to solve for how to offer customers “an experience as unique as they are.” For example: 

  • All members can set their preference for the level of contact from DSW. It’s communication the customer’s way! 
  • DSW’s new VIP loyalty program offers a more personalized experience for members, with relevant and compelling rewards that were all designed based on customer feedback. Features include the ability to receive free shipping on anything, the ability to earn rewards earlier and more often, and the ability to donate shoes for points.

In an evermore competitive landscape, breaking through the noise becomes increasingly difficult. Aim beyond simple customer retention and shoot for true brand fandom by incorporating aspects of gamification, exclusivity, and personalization into your customer loyalty program. 

Looking for ways to improve your current customer loyalty approach? Drop a line anytime to the team here at Revel located in Springfield, Missouri. We’d be happy to custom-tailor an approach to take your brand to the next level of loyal followership.

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