Loyalty?

Price is important; comparing prices is increasingly easier; every retailer is online, and mobile, and actually offers the same fixed service; switching provider is a piece of cake; and delivery is well arranged everywhere. So is loyalty still a factor?

Loyalty programmes are deployed in large numbers to find and retain loyal customers. But that does not automatically guarantee you loyal customers. In fact, loyalty programmes get a negative rating by 90% of consumers. Which is a pity, because loyal customers are willing to spend twice as much.

Most loyalty programmes only revolve around saving points, and that simply does not work. Over 28% of consumers do start saving, but stop without ever redeeming a point.  54% are inactive, and save no points at all. Consumers who do save are largely unaware of it. For example, 45% do not know how many points they have or what value their points balance represents.

So is there any point in saving points?

Yes, there is. It is even a decisive success factor. 54% of consumers have stated that they would buy more if a reward were linked to this in the form of points (46% have done so in the past 12 months). But saving alone is simply no longer enough.

A savings programme needs to involve more experience. Customers are certainly loyal, but they are loyal to experiences. They expect a retailer to know their individual preferences. They seek real-time contact with the retailer, want to be constantly surprised, and want to be able to shop in many different ways. If you can manage that, they'll spend more. In fact, 62% of Dutch consumers are prepared to do that if they are very emotionally involved.

A loyal customer thinks price is important (50%) but even more important are quality (88%) and service (72%). Only when the quality, experience and price triangle is correct, is a customer prepared to (temporarily) commit to you.

Customers remember an experience with a company better and longer than a discount. So retailers get loyalty if they make their customers' lives easier and by making every engagement with the customer (digitally or not) valuable to that customer.

Easy ordering, easy payment
Retail apps can make shopping easy and low-threshold. They make it easy for people to come to the shop more often, buy more, and pay quickly. So make the features in the app part of the retail experience, and make the life of the consumer easier. Focus on the customer journey, and make it smoother and better. This not only guarantees loyalty, but also the use of the app. And as long as your consumer continues to use the app, you have contact and can collect your data.

Starbucks understands that better than most. Since the launch of the "skip the line and order ahead" feature in their app, 21% of all orders are mobile orders. Starbucks is striving to make buying your daily morning coffee as pleasant and fast as possible, by turning it into an experience. In 2017, the number of Starbuck's loyal app users rose by more than 23% to more than 11 million. The app has grown the share of loyal customers in total sales to almost 40%. Founder Howard Schultz sees his major investments in mobile technology as the main reason for the record sales in 2017.

Convenience is the most important thing for many consumers 
A mobile app can deliver a seamless customer journey, and therefore a lot of convenience. A good app is entirely built around convenience for the consumer. PicNic, the online supermarket, uses data as a central hub in its strategy. Continuous analysis of data and consumer behaviour ensures that the app continues to works smoother and become evermore personal. PicNic wants to tailor its service to the consumer as much as possible so that they can complete their shopping list in as few clicks as possible. Suitable personal suggestions help the customer to write their list. That is the success factor. The aim is to complete every order in a maximum of two minutes. The convenience of the app ensures loyal customers. Anyone who buys something five times never leaves, says the online supermarket.

The wow factor
But convenience alone is not enough. More is needed to get a loyal customer: chiefly, surprise and an unforgettable experience. In other words, features in the app that not only make shopping easy, but really add something extra for the consumer.

Sephora has been a pioneer in the field of experience for many years, both in the shop and digitally. This successful retailer regularly uses its app to surprise consumers. 80% of their customers use it before or during their visit to the shop and Sephora uses this opportunity to provide a seamless shopper experience. Its latest addition is "Virtual Artists". Here. the use of AR and AI provides the customer with a unique experience. The app chooses the right colour mix based on a photo of your favourite dress. You can then try out matching foundation creams, lipstick, eyeshadow or rouges in a live selfie video. And then save the different looks, compare them, share them and, of course, buy immediately. To be successful, an experience must have real value for a consumer, and the Sephora app certainly provides that! Out of 10.6 million members, app users spend an average of 13% more.

Being really personal
In addition to convenience and delivering experiences, personal contact is perhaps the most important. And that's where a good data strategy comes in, with personal information to motivate the customer. These might be little things, like the free pastry that the Hema department store gives customers on their birthday. Or really personal emails during the entire customer journey. That is what Campina does to keep its 1.1 million savers motivated. In this programme, saving is the launch-pad to direct, relevant contact with its customers. Tone and content are precisely geared to the recipient. The welcome e-mail alone comes in 100 different versions.  The result is great - 10% more active savers. And active savers are important because they buy 23% more Campina products than non-savers. Moreover, over 35% of the savers have also started buying a new product from Campina.

True loyalty achieved through the wow factor.
So retailers have to make a switch from a culture where loyalty means saving points and VIP shopping nights, to a culture where the customer experience is central to everything they do. How do you get such emotional involvement?

  • By putting convenience first. Thinking from the consumer's point of view.
  • By providing a truly personal experience. This means not just gathering data, but using it too.
  • By surprising the consumer and making them happy. The wow factor.
  • By always providing the same service at every moment. Really focusing on the consumer.

So you get loyalty if you always put your customer first, and if you manage to leverage the wow factor.