The last 18 months have seen significant changes in the retail landscape. It’s time for businesses to assess how the brand experience has changed, how the customer-brand connection has evolved, and how the pandemic and social unrest have impacted the demands and expectations of customers.
The year 2020 compelled retailer marketers to confront the state of consumer relationships, particularly brand loyalty. Loyalty was a hero for some, especially those that quickly modified service and delivery models, allowing the customer-brand relationship to survive major disruption. In fact, according Merkle’s 2021 Loyalty Barometer Report, despite the events of 2020, 57 percent of customers remained loyal to a brand.
Reduced customer spending, access concerns, and product availability were huge blows to brand loyalty, for retailers that were not as flexible, leading to switching behaviour among customers.
While some customers are willing to return to previous brand purchase activity, indicating a strong and long-term relationship, others may never return due to newly established buying habits and experience expectations. The events of 2020 demonstrated that transactional methods to brand loyalty are transient and emotional connections matter, with direct financial implications.
Also Read: How Brands Use Emotional Analytics for Marketing
Loyalty and rewards programs are critical components of a successful brand experience. However, this standard value exchange is insufficient to foster the type of deeper emotional bond required to withstand future disruptions. In a post-pandemic environment, emotional loyalty strategies will be among the most effective. They will turn programmatic strategies into meaningful moments, giving customers more control over the experience, and use the program to connect customer and brand values.
Securing Brand Loyalty
In a loyalty program, rational benefits such as offers, discounts, and free products are standard. However, the pandemic altered customer expectations for experience, service, and delivery. In this new environment, effective brand loyalty initiatives must go beyond discount-based, transactional incentives. Ancillary benefits that provide convenience, recognition, and belonging to members throughout their journey will be the differentiators in securing brand loyalty and preventing switching.
According to Merkle’s consumer research, customers want brands to create emotional loyalty by focusing on strategies that make their lives easier. COVID-19 caused everyday routines to be disrupted and personal finances to be impacted, making this factor especially critical. And what is one crucial thing a brand can do? Surprise customers with exclusive deals and goodies! This type of unexpected factor is what causes emotional connections to be heightened.
Customer-Brand Relationship
By getting permission to collect and activate consumer data, brand loyalty programmes aid in the development of the customer-brand connection. Consumers now want brands to forecast and personalize their experiences based on data. Forward-thinking brands can use technology to enable customers to choose earning and rewards features and advantages to create personalized loyalty programs in the future, as customization technologies advance and data strategies become more finely calibrated
Also Read: Driving Customer Loyalty via Excellent Customer Experience
Values-Based Brand Loyalty
Brands should distinguish between values-based programs, which are aimed to connect with customers’ beliefs, and loyalty programs, which are designed to provide concrete value. It’s vital to remember that values-based brand loyalty strategies are not only about aligning a program with a cause or making charitable contributions. Value-based loyalty programs of the future will put shared ideals at the center of the loyalty model, incorporating them into earning and redemption processes and making them central to the program experience.
Businesses should evaluate how their brand loyalty program contributes to the overall customer experience and also how it elicits emotion. They should experiment with new emotive techniques, obtain direct client feedback, and adjust to satisfy the requirements of ever-changing customers. Brands that use their loyalty strategies to appeal to the deeper sense of connection that customers crave will be at the forefront of the future evolution of consumer loyalty
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