Implementing the latest brand loyalty strategies can take you one step closer to achieving brand love with your customers.
But first—what is brand love? For our State of Brand Love report, we surveyed 3,375 consumers to build a framework for identifying, improving, and growing brand love. The framework places brands on either an “inner circle” (brands that are most loved by respondents) or an “outer circle” (brands that are actively avoided by respondents). By contrasting the two groups using the inner/outer circle model, we were able to determine the factors that make people love their most cherished brands, and why other brands don’t make the cut.
The framework helped us to identify quality, customer experience (CX), and trust as key factors that contribute to brand love. Brands that invest in these three areas are more likely to succeed. With this in mind, we explain how to design, build, and run brand love, which includes staying true to your brand’s personality, building one-to-one relationships with customers, and consistently delivering exceptional customer experiences.
And loyalty programs are a great way to improve CX and build relationships with customers. By building loyalty programs customers want to join, you can, in turn, build brand love—which is deep and long lasting. And the first step to building a popular loyalty program is to tap into the most effective brand loyalty strategies. Below, we illustrate why brand loyalty leads to brand love, and explore the brand loyalty strategies that can lead to brand love bliss.
An Opportunity to Grow Loyalty into Love
Loyalty programs drive customer engagement, build genuine emotional connections, and boost retention. But according to our research, only 33% of customers participate in loyalty programs from their most-loved brands, with banking, apparel, and travel boasting the highest loyalty program participation overall. Though loyalty program participation by a customer is more likely for inner circle brands, it is not a guarantee of brand love.
For those who don’t participate in loyalty programs, a lack of interest and privacy concerns are top of mind. Many programs may not be memorable or unique enough to gain attention: among inner circle brands, 21% of customers forgot to sign up, and 21% didn’t care for the rewards offered.
Outer circle brands are either used too infrequently (28% don’t shop or do business with the brand often enough) or aren’t trusted (21% didn’t sign up because they didn’t want to share their personal information with the brand).
This means that there’s plenty of room for improvement for many brands when it comes to their loyalty offerings. The good news? If done correctly, loyalty programs can add real value to a brand’s bottom line. Let’s look at some of the future-forward brand loyalty strategies you can leverage to increase participation by customers—and in turn, build brand love.
Focus on Your Brand’s Purpose
Traditionally, creating a successful loyalty program has involved maintaining a balanced exchange of value between the customer and the brand. However, with the emergence of the “conscious consumer,” simply offering a give-and-take value proposition is no longer enough to retain customers. Brand purpose now plays a key role in influencing customer decisions. Our research also shows that 76% of customers initially try out a new brand based on recommendations from trusted sources. Similarly, discovering a brand’s poor reputation is a significant factor in customer dissatisfaction.
While this shift in purchase motivations and loyalty outcomes has been ongoing for a while, most brands are just beginning to incorporate brand purpose into their loyalty programs. This integration is often done through isolated methods, such as emails or occasional events supporting ESG-related initiatives. Instead, you should consider making brand purpose a central element and build loyalty programs rooted in that purpose.
One example is charitable giving as a redemption option within a brand’s loyalty program. While it’s a step in the right direction, brands typically do this in isolation, resulting in very low charitable giving redemptions. What you should do instead is to lead with brand purpose by incorporating it into your program’s vision and allow that to overflow into the program’s activation and tactics. When customers engage with a brand’s loyalty program, they should see the brand’s purpose and values prominently displayed.
Incorporate Unique Experiences, Access, and Partnerships
The brand experience—the sum total of all interactions and touchpoints that a customer has with a brand—plays a critical role in shaping perceptions, loyalty, and advocacy. It fosters emotional connections, such as trust and a sense of belonging, leading to outcomes like advocacy, customer satisfaction, and long-term customer value.
To create these emotional bonds while delivering on increased customer expectations, more brands are emphasizing loyalty as a membership offering. This membership provides increased utility (e.g., enhancements to convenience, speed, ease, and choice) and access (exclusive access to events, products, and services).
In addition, partnerships—such as grocery stores offering fuel pump rewards—offer various advantages, including enhanced benefits, access to a broader audience, new marketing channels, customer acquisition, richer customer data, and opportunities for increased brand engagement and repeat sales.
With this in mind, consider structuring your loyalty program as a human-centered membership ecosystem. Connected membership experiences are the way of the future because they’re focused on maximizing customer lifetime value and advocacy—an aim far bigger than using the partnership to provide additional redemption options to members. They rely on deeper partner integration, resources, and investment across technology, co-branding, member experiences and benefits, and shared profit and loss (P&L) management.
To establish successful connected memberships, you need to identify optimal partnerships. This can be achieved by creating data clean rooms to securely compare anonymous data with potential partners, determining customer matching and sharing cross-brand customer insights. The key benefit lies in gaining more customer insights than the brand possesses individually—making both brands more data-informed.
Integrate Customer Service Experience Into the Broader Loyalty Experience
Customer service and personalized interactions are key factors in cultivating customer loyalty. In our research, we found that customer service matters more than price when it comes to driving brand satisfaction and promotion, and customer service is twice as likely than price to drive Net Promoter Score (NPS) (27% vs. 15%).
Today, AI-powered tools, such as chatbots and virtual assistants, are being used to enhance the customer service experience—by better handling routine inquiries, gathering information more efficiently, and freeing up advisors to deal with more complex issues. This shift allows advisors to concentrate on delivering value-added services that require human intervention and empathy and lead to better customer satisfaction when done right.
Leverage Advances in Technology to Provide More Personalized Experiences
Delivering personalized experiences has been a long-standing goal in marketing. According to Loyalty360, 85% of retailers consider personalized offers as important, or very important, to the customer experience.1 Large data and analytics teams in high-frequency sectors like mass retailers and grocers already employ algorithms and propensity models to determine personalized promotions for customers. Additionally, they benefit from funding from consumer packaged goods brands, which are investing in customer shopping behavior insights.
In the future, driven by regulatory updates and advancements in machine learning and generative AI, there’s more opportunity than ever for a broader set of brands to deliver on the promise of personalized experiences. Brands of all sizes are now leveraging AI to drive business results through personalization, such as crafting tailored messages, conducting A/B testing, offering customized polls and quizzes, and rapidly customizing content.
For mid-sized and smaller brands, the path forward involves creating use cases that boost revenue and foster stronger customer connections. Consider which brand experiences would benefit from hyper-personalization and can lead to increased revenue and lasting customer attachment. Determine the necessary data, analytics, front-end customer experience, customer service automation, and backend technology to enable these experiences.
Put a Little Love in Your Loyalty Program
Ready to take the next step toward building brand love with your customers? It’s easy, as long as you have the right loyalty strategy in place. These approaches can improve your loyalty program in a world of greater expectations from customers—leading to higher customer retention, greater customer lifetime value, and ultimately, stronger brand love.
Discover more tips on how to earn your customers’ love in our latest report, State of Brand Love.
Jodi Rausch
VP and Managing Director, Loyalty Solutions
