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  • Writer's pictureMichael Ridgewell

"Loyalty? You keep saying that word. I do not think it means what you think it means..."

loyalty marketing may not mean what you think it means

In my loyalty marketing journey as a client and as a consultant, I’ve seen and heard many interesting things. We now have access to amazing insights and technology that create a digital transformation in how we engage and personalize dialogues with consumers.

However, to paraphrase the great Inigo Montoya from Princess Bride, when I listen to some teams looking to launch a program, it begs the question - what does loyalty mean to you? What do you want an initiative to deliver on?

So, inspired by some of the conversations over the years, here’s my mental checklist before offering advice on a program that will address what a potential client wants to solve for, and includes some questions you may find useful on your loyalty discovery journey.


What does loyalty even mean?

Good loyalty teams create ecosystems that deepen relationships – that’s why I prefer the term Engagement Marketing to Loyalty Marketing. Loyalty can help grow a following, boost insights and first-party data, enable brands to own the relationship with their consumers directly, and more.

Starting with a solid strategy and a plan are critical first steps to setting expectations and architecting your solutions to deliver value – for both you and your consumers. This may mean points and tiers, or ways to interact with a brand through communities and referrals. Evaluating the best options starts with discovery and discussions.


Is your product or service loyalty ready?

Some brands naturally create dedicated fans. Others need more work. You can’t blackmail your customers to fall in love with your brand with a program.

Some products don’t have the purchase frequency or margin for the “build something like BonVoy or Starbucks” aspirations of some company leaders. If it takes two years to accrue enough points to earn a mug with your logo on it, it’s time for a rethink. A broad collection of products with a good purchase cadence and good margin unlocks another story. Think it through. Run the numbers.


Do you need loyalty or just better email marketing?

What is the real right-sized solution for your business need, budget, and talent/resource level? We all acknowledge that it’s more effective to retain a customer than to find new ones. So retention is the critical element, and loyalty is a tactic to get there. Rarely will a one-time buyer become a true loyalist on day one of starting a relationship. But getting that consumer to their second or third purchase quickly may just win them over organically. Every company will have a tipping point of purchase or interaction frequency that shifts “like” to “love.” Find that and amplify it. Focus efforts to drive repeat purchases with the intent to build that habit and emotion. Of course, great product quality, service, delivery, and superlative care help too.


What numbers can you influence?

Are you looking to boost lifetime value (LTV), increase average order, or reduce churn? What are you expecting the loyalty program to do? Different products lend themselves to different solutions, so be realistic about what numbers you can influence and change, and how. Great teams understand, and then influence the consumer journey to drive impact.


Can you offer meaningful value?

Do you know what your consumers want? What do they want from a relationship with your brand? And what do they value? A utility brand may not be able to build a deeper emotional connection. Other consumer segments may crave insider knowledge or a community of like-minded tribe members. Lean into your strengths on how you can customize experiences that consumers want, and make them feel valued.


What else to consider?

The reasons for creating loyalty initiatives can go beyond retention and repurchase. Are you looking for a competitive advantage? Are you looking for more data you can act on? All these elements can be addressed with careful planning.

When planning turns to action, make sure you commit to long-term success. Do you have the time and the talent to make loyalty a win? Programs run off the side of a desk rarely deliver maximum return. Similarly, be sure to promote your program. Programs need work, are you ready to put in the effort needed?


I hope this list inspires debate and helps brand leaders determine what loyalty means to them, to design the best possible program that aligns with business goals and the expectations of consumers. If you need help on this journey, reach out, and let’s discuss - as you wish.

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