Economic slump? A retail store with few customers. Image by Tim Sandle.
Loyalty programs were considered a unique value add not too long ago, but due to the pandemic, nearly every restaurant possesses one now. However, not all programs are created equal. In fact, the average customer is a member of 15 programmes, but only active in 7. Put simply, over 50 percent of all brands are not achieving the desired outcome of a loyalty program: return customers.
To understand more, Digital Journal spoke with Britt Mills, VP, Digital Customer Experience at Mobiquity. Mills outlines how restaurants can revamp their loyalty programmes to stand out in a now crowded field.
Digital Journal: Why do brands use loyalty programmes?
Britt Mills: The brands that are using loyalty programs right are now more focused on how the program guides the experience in new ways vs. just offering a discount or reward to users. The loyalty program is guiding the experience to make sure the customer is getting the most out of it. Brands should find new ways to satisfy the customer with their digital experience – that is the true value that customers are looking for with loyalty programs these days.
DJ: With nearly every consumer-facing brand having its own loyalty program, how effective are loyalty programs today?
Mills: Traditionally, loyalty programs have been viewed as ‘effective’ if they are driving visits and purchases, but that might not be as sustainable as it used to be. The true loyalty programs are those that are driving brand preference by making the customer feel satisfied in their purchase. i.e. it was easy, the rewards redemption process was integrated and not frustrating, they got free shipping, they got early access, they feel rewarded for engaging with that brand. It is all about impacting customer emotion and satisfaction and not just the wallet.
DJ: What are some of the challenges for brands looking to start, revamp or improve their loyalty programs? With so much competition, how can they carve a spot out in the market?
Mills: Challenge is that just offering just discounts won’t meet user expectations. Those are accessible to most customers with or without taking the extra steps to join your program. Customers have ‘redemption anxiety’ and are often trying to access coupons and barcodes while in line or at the checkout counter – the question you should be asking yourself is how can we make this redemption process more integrated into the experience, so you are removing that burden for your loyalty member?
I suggest creating or revisiting your customer journey map and identify the opportunities that you can enhance the experience for a loyalty member and remove redemption anxiety as a first step vs. just introducing new offers.
DJ: What are some of the hallmarks of a successful loyalty program? What role does digital engagement play?
Mills: Successful programs are focused on emotion vs. discounts and go the extra mile in the good and bad moments. Your loyalty program should guide the digital and physical experience so that the true value to the customer is felt.
DJ: What role does digital engagement play?
Mills: One of the brand benefits of having a customer join a loyalty programme and engage with a digital touchpoint, is the data that it now provides. It is up to a brand on how they use that to benefit the customer in new ways.
DJ: While consumers belong to an average of 15 loyalty programs, they are only active in 7 programmes, on average. How can brands lengthen the lifespan of customer loyalty membership?
Mills: Don’t get lost in the black hole of discounts and rewards if you want to lengthen the lifespan of their membership and engagement. Chick-fil-A and Panera are great examples of how to go above discounts and really integrate the benefits of the program into the digital experience to provide a better and more satisfying visit for the customer – ultimately ensuring their ongoing membership. Things like reminding you that you have a reward for something in your cart and to apply with one tap (vs. having to go hunt for what applies to this order) and sending personalized notifications from that restaurant manager with a ‘thank you’ message and a morning coffee on them. That shows that they value the customer, want to provide value from their program in new ways and touches on the emotional aspect.