Increasingly, brands and retailers are adopting engagement-based loyalty tactics to evolve in tandem with the way people shop. While transaction-based loyalty programs — where purchases are linked to rewards — are successful at driving repeat sales from a single customer, engagement-based programs work to foster meaningful relationships with customers at large.
With engagement-based loyalty initiatives, customers engage with a brand or retailer in a variety of ways: Contributing content such as user photos, writing reviews, giving feedback on their experience and participating in online communities to answer questions from other consumers. When executed correctly, engagement-based loyalty initiatives provide brands with a steady stream of feedback and user-generated content about their products and services.
As more brands and retailers adopt engagement-based loyalty programs, there are several best practices to keep in mind.
- Align with branding. Engagement-based loyalty programs need to align with the organization’s overall branding strategy. From graphics to program components, such as badging systems, every element of your loyalty initiatives must seamlessly integrate with your online and offline branding.
- Identify desired outcomes. During the development stage, it’s important to determine the desired result, specifically looking at which customer behaviors you want to promote, and then tailor the initiative accordingly. For example, if you want to encourage the creation of product reviews, your approach should be different than if you want to motivate customers to share user-generated images over social media.
- Think long term. Your engagement-based loyalty initiatives need to keep people engaged with your brand over a long period of time. Rewards and game levels should be achievable — but not too easy. Ideally, your initiative will remain active online for years to come, so customers shouldn’t be able to hit peak levels within a month or two.
Finally, one of the keys to successful engagement-based loyalty is that your initiatives must have a direct and clearly communicated benefit for consumers. Why should they participate in this program? When you invite people to participate in an initiative, make it crystal clear what the person stands to gain in terms of reciprocal value.
For many brands and retailers, the right loyalty mix is a strategy of both transaction-based and engagement-focused initiatives. In 2015, consider adopting an engagement-based loyalty strategy for your brand and stay ahead of the curve, identifying your most engaged customers and improving your ability to turn them into brand advocates.