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New Year, New Opportunities – 2019 Loyalty Resolutions

How many times have you made New Year’s resolutions?

We all have. Whether it’s eating healthier, exercising more or trying to be nicer, the start of a new calendar year seems like a great time to put some of those old habits to bed and to start working on a better you.

Shouldn’t the same go for your loyalty efforts in 2019?

In the Age of the Customer, its easy for consumers to switch brands based on products, prices, and other transactional elements. Everything is always at their fingertips.

That’s why differentiation is so important. Your loyalty program is at the center of that. Retailers that can capture their customers’ wallets and hearts are the ones that will be successful in 2019 and beyond.

Here are five 2019 loyalty resolutions that you should put into action starting now.


1. Don’t Focus Solely on Customer Acquisition

If there was ever a year to work on customer retention, 2019 is it.

Sure, its exciting to acquire new customers and many retailers focus on that, but it’s much more cost effective to keep your existing ones engaged.

We’re all familiar with the 80/20 rule. It says that 80 percent of sales come from 20 percent of your customer base. That means that 80 percent of your customers are casual shoppers. They’re not very loyalty to any specific brand and will shop around based on things like price.

In fact, only 13% of customers are loyalists, who don’t shop around.

Loyal customers are becoming more of a rarity, but it’s because brands aren’t giving them good enough reasons to be loyal.

Although many people are in loyalty programs, that doesn’t mean they’re actively engaging with those brands.

If there’s nothing about your loyalty program that improves the lives of your customers, they simply go where the price is the best.

From a loyalty perspective, traditional, transaction-based programs do a great job at gathering those casual customers. They excel at getting lots of signups. They play into that 80 percent bucket.

But when you really focus in on that top 20 percent by giving catering to their emotional attachment to your brand, they become even more loyal. Exclusivity, differentiation, and premium benefits come into play here.

If you keep these loyal customers coming back again and again, you will not only be more profitable, but you will be building a group of brand advocates that will tell their friends and family how great your brand is.

See how the 80/20 rule applies to premium loyalty.


2. Focus on Experiential (and not Just Transactional) Benefits

Transactional benefits are still important to customers. That isn’t changing in 2019.

But a brand’s best customers tend to stick around because of an emotional attachment to a brand.

While elements like points, discounts, and cash back still do elicit emotions (for example, making a customer feel smart by saving money) they know they can get those perks anywhere.  Experiential benefits are what have deeper, longer term effects and drive emotional loyalty.

A brand’s most valuable customers behave this way because they know they’re not going to find a similar experience with any other brand.

By understanding everything about them including their expectations, emotions, and behavior, you can offer them exclusive benefits not available to all members (like with a traditional program).

Look what Lululemon is doing with its paid loyalty program. The athleisure brand has been testing the program and it’s been so successful that company officials are going to roll it into more test markets and possibly increase the membership fee.

Why is this program looking so positive?

Lululemon is doing a great job of mixing transactional benefits with exclusive member experiences. Not only do members get rewards like a free pair of leggings for joining (making the membership fee pay for itself), they become eligible for experiential benefits like curated events and workout classes.

Read more about Lululemon’s paid loyalty program here.


3. Consider a Premium Loyalty Program for Your Brand

If you work in retail, chances are you’ve heard the term “premium loyalty” in 2018. With more retailers getting onboard with these membership loyalty programs, the amount of interest has been growing.

See which retailers launched membership loyalty programs in 2018.

A premium loyalty program is simply a loyalty program that is so valuable, members are willing to pay for it. Customers sign up and pay a membership fee upfront in exchange for valuable rewards that they can immediately and as often as they want.

It’s the opposite of a traditional, transaction-based loyalty program where the customer makes purchases over time to get rewards later. These programs are all very similar. Just about every retailer has one and they feel the same.

If you already have a free loyalty program, great! A premium tier can supercharge any traditional loyalty program.

In 2019, think of differentiation at the brand level and not at the product level. Premium loyalty programs are a tremendous asset because they put the customer at the center of everything and can offer benefits that traditional programs can’t come close to.

Learn more about premium loyalty here.


4. Put Your Customers at the Center

Your success really is all about centering all your loyalty efforts around your customers.

This has been Amazon’s strategy since the beginning. We saw Prime eclipsed 100 million members in 2018. While the original pain point Amazon was solving for was expensive shipping costs, the program has grown to include so much more.

Streaming video, Whole Foods benefits, and soon cashier-less checkout at 3000 locations. All of it revolves around their customers.

80% of executives feel their brand understands the needs and desires of their consumers, only 15% of consumers agree.

While many retail officials think they have loyalty covered, most customers don’t agree. Loyalty isn’t just a marketing tactic. It’s an all-encompassing strategy for customer engagement and retention.

Customers are looking for their favorite brands to really know them.

In fact, 61% of American consumers say they’ll share more data with a company in order to get customized communications from them. 48% of UK consumers agreed.

For as much as personalization is discussed in retail, and as much as customers expect it now, it remains a huge opportunity.

Amazon is already doing it with its predictive analytics. It uses both historical and real-time data to gain a deep understanding of its customers and creates a personalized homepage for each customer.

If your competitors are offering similar benefits, consider what you can do to creative a unique emotional connection to your customers. Look a your customer data and build a program based on their preferences and needs.


5. Keep an Open Mind

Retail has changed so much and will continue to evolve at a rapid rate in 2019 and beyond. You’ve probably read the headline, “Retail is dying”.

No, it isn’t. That couldn’t be farther from the truth. It’s just changing.

Technology continues to push every type of company to evolve. Manufacturing, travel, hospitality, food, and just about every other industry must continue to evolve and retail is no exception. But this evolution is full of opportunity for the retailers that are open to it.

Change itself isn’t killing retailers. It’s the unwillingness to evolve with the way people shop. Today, transactions happen everywhere. In-store, online, on mobile devise – It’s up to the retailers to provide a seamless omnichannel experience for customers.

Click and collect, online retailers popping up in brick and mortar locations, and membership loyalty are all things that consumers are starting to expect now.

So many retailers are still stuck in the old way of doing things, but even traditional retailers have tremendous opportunities in the coming years.

Retail stores need to offer an experience that isn’t available online. Build relationships, solve for customer problems, and let your loyalty program members experience what it is like to be part of your brand.


2019 and Beyond

2019 is looking bright for retail, but only if you resolve to make a difference.

Don’t focus solely on customer acquisition. Make sure you are doing things to retain and enhance your current customer base, especially your “best bucket”.

Make sure your loyalty program offers both transactional and experiential benefits. Customers love to save money, but they can get good deals anywhere. Give them a reason to come back to you repeatedly.

Paid loyalty, membership loyalty, subscription loyalty – Whatever you call it, seriously consider a premium loyalty program for your best customers. Remember, customers are more than willing to pay for great benefits. If you already have a free program, a premium tier will enhance your overall loyalty ecosystem.

Take a cue from Amazon and put your customers at the center of everything you do. It’s not about the retailer anymore. It’s the Age of the Customer and it’s about focusing on their needs while also balancing your business requirements.

Finally, keep an open mind going into 2019. Technology will continue to shape consumer expectations and how retail is done. Retail isn’t dying for the companies that are moving.

Don’t you want to be the champion of change for your brand in 2019?

Paul Wolfer

Paul is our Senior Manager, B2B Marketing. He works closely with the leadership team on strategic positioning, messaging and branding. When he's not posting on LinkedIn or working on the newest data study, he can usually be found adventuring to breweries or attempting to learn a new song on his guitar.

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ebbo™ is an all-in-one loyalty company. With our data driven strategy, full-service approach, and the unwavering support of the people behind the platform, our dedicated team will work with you to understand your loyalty goals, innovate solutions and help you build customer engagement on repeat.

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