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Best (Brand) Friends: How Active Participation is Changing the Face of Loyalty

With a rise in brand intimacy, the loyalty paradigm is rapidly changing. The brands that will emerge on top are those that can meet consumers’ evolving demands for value, personalization, and active participation. This shift is something I’ve seen in my tenure providing loyalty solutions and, recently, our team surveyed consumers about their expectations for brand relationships for further clarity. We found that the brand-consumer relationship is not one-sided. Consumers are pivoting toward brands that make the purchasing cycle personal. Nearly half describe their ideal brand relationship as one of a “life partner” or “close friend,” and while there’s no limit to how many loyalty programs a consumer can join, an overwhelming two-thirds will only opt-in to their favorite stores.
 
Brands who achieve “best friend” status sounds like a marketing dream -- who wouldn’t want easy access to consumer behaviors, preference, and loyalty? To fast track consumer relationships and derive deeper, more meaningful relationships, read on.
 
The Value Evolution
While consumers are still drawn to transactional elements of loyalty programs like spend-and-earn rewards, utility and emotional benefits are gaining popularity. Once synonymous with cost efficiency, value is evolving beyond financial gain to include time efficiency and convenience. Busy consumers want interactions that streamline everyday activity, whether through expedited shipping or highly-personalized offers surfaced at the right moment.
 
In fact, 40% of consumers appreciate when a brand fits their lifestyle and 20% prioritize brands that improve their lives. When asked to name their favorite loyalty programs in our research, Kroger, Starbucks, Amazon, Walgreens, CVS, and Sephora topped consumers’ lists. Each of these brands are considered leaders in their respective categories, not for rewarding the richest payout, but for their mastery of leveraging data to deliver more relevant experiences.
 
Sephora’s app experience streamlines the discovery process with assisted self-service. Customers can upload a photo of themselves and digitally sample makeup, a feature that introduces them to new products and adds a deeper layer of intimacy. Meanwhile, Walgreens’ Balance Rewards encourages participants to stay active by rewarding them with 20 points for every mile they walk, run, or cycle. Members can receive more points every time they measure their blood pressure, test their blood glucose, or commit to quitting smoking. While these programs are different in structure, their highly-personalized framework allows them to resonate with consumers on a more emotional level.
 
Two-Way Conversation
Relationship building is collaborative. While consumers continue to respond to traditional loyalty models, 45% want more than a transactional relationship, seeking deeper interaction and collaboration. Consumers are growing more mindful about their role in brand relationships, yearning for a more active voice. Forty-five percent crave a choice in how they’re rewarded, while 48% want brands to actively listen and react to feedback.
 
A great way to implement two-way conversations is through activating polls and wish lists that provide broader clarity into consumers’ specific desires. For an even deeper connection, brands can also consider advanced profiles where members can share more extensive personal preferences, allowing permissions like geo-targeting, commenting, and reviews.
 
Brands should also routinely request consumer input and then use feedback as a roadmap for loyalty innovation. Also pay attention to customer behaviors, noting preferred devices, effective offers, and engagement rates. These factors can highlight areas in need of improvement or, the flip side, emphasize functionalities that truly resonate.
 
Hyper-Personalization
Friendships aren’t as special when you feel like a face in the crowd. When asked about non-transactional benefits, 55% of consumers want brands to treat them like an individual, while 46% desire communication relevant to their interests. Starbucks, for instance, has amped its personalization through AI. Leveraging real-time data, its mobile app can send over 400,000 variants of hyper-personalized messages, doling suggestions tailored to customers’ unique behaviors.
 
Meanwhile, over 70% of consumers indicated that they would be “very likely” to join a loyalty program individually customized to their preferences, purchase history, and interaction. Kroger’s Plus Card has made significant strides through its application of shopper analytics. The program applies predictive behavior modeling to segment shoppers and create individualized promotions and tailored prizing, a feat that creates one-to-one experience for consumers.
 
To boost consumer relationships from “acquaintance” to “friends forever,” brands can take measures to drive deeper intimacy into their interactions. Loyalty programs that expand the meaning of value and add strategic layers of utility, personalization, and hyper-personalization will be the ones that foster relationships with long-lasting stability.

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