Given the recent media coverage, it’s safe to say we have all heard the term ‘loyalty fatigue’ and have a good understanding that not all loyalty programs in Australia are delivering on their promises. For the majority of us, there are probably several cards in our wallets. But do those cards actually create true loyalty, or do they simply change your shopping behaviour to follow the best offer? As a marketer, the question to ask is what is loyalty and how should it be measured. Is
true loyalty transactional or emotional? Should objectives be focused more around frequency of purchase and total spend, as they often are; or are softer measures – advocacy, rate of recommendation and brand equity more appropriate?
In commercial terms we tend to see loyalty programs as a way to drive the desired behaviour of repeat purchasing, however, if we look at the real meaning of loyalty as a virtue, not a transactional behaviour, it can present a very different viewpoint.
A shopper may remain a customer of a particular brand or retailer for a number of years. They may regularly purchase from that business, and yet may not have any genuine loyalty or allegiance to it. It may be that a shopper simply finds the best value offer, a competitor to enters the market with a better deal or something that better meets their needs, and they may make the switch with relative ease.
It is also likely that this customer type will never be inclined to sing your praises to others or share their experiences with your brand.
So, despite them being a ‘card carrying member’ and a regular shopper, can we really call them loyal?
On the flip side, take companies such as Lorna Jane. Despite its loyalty program (VIW – Very Important Woman) playing a smaller role in the brand’s overall marketing strategy it has built incredible loyalty and an engaged community of brand advocates.
With today’s shoppers more selective than ever before when it comes to choosing what brands to buy and retailers to purchase from, there’s a clear benefit to engaging shoppers on a more emotional and genuine level than that of simply a supplier of goods.
Lorna Jane
Lorna Jane’s many initiatives position the brand, not as a place to purchase gymwear, but instead as an advocate for women’s health and lifestyle.
This holistic approach to communications and interactions spanning products, services, and advice across food, fitness, and wellbeing, has enabled the retailer to form a strong bond with its customers in a omni-channel world.
Encapsulated under the banner of Move Nourish Believe, the company is not just selling activewear, but a way of life. The result is a customer that is engaged at a much higher level than just wearing Lorna Jane clothing. A customer becomes a brand ambassador – someone who believes in the brand, its ethos, and the relationship they have formed. They feel that the brand understands them and has forged a real sense of community both online and in stores.
Lorna Jane is a shining example of how to build trust and an emotional connection with your shopper. Valuing this customer centricity and executing it well has meant that sales and commercial success has followed, arguably at a much greater rate than those competitors with plastic cards.
While it’s not to say that a loyalty program can’t offer this level of interaction, it must move beyond a transactional relationship with customers, build engagement beyond tiers and points, and start forming real connections that offer value and relevancy to the lives of the people it involves.
Karen Spear is director of shopper marketing at The Zoo Republic. She can be contacted at karen.spear@zoorepublic.com.au.