A global pandemic, a series of lockdowns, a worldwide supply chain crisis, an ongoing war between two massive economies, and an impending economic downturn! The world has witnessed unprecedented levels of crises in the last three years than it has in the last three decades.
The current circumstances are compelling many customers to change their purchasing habits. A report published by McKinsey, the oldest and the largest management consultancy firm, revealed that over three-quarters of customers have already changed their shopping behaviors since the beginning of the COVID-19 pandemic.
In such a scenario, companies are bracing themselves for a slowdown in sales and spending habits of their customers. But as the saying goes, “every cloud has a silver lining.” The moment provides every business an opportunity to rethink and redesign its strategies.
This blog post discusses the ways companies can update their loyalty programs in times of crisis to address new needs and priorities of their prospects and customers.
1.Use the power of personalization
Be it an economic boom or downturn, personalization will never go out of fashion. A brand that personalizes its offerings, rewards, and messages for a specific group of people is more likely to connect with its target customers and register higher sales. As per research by Boston Consulting Group, eight out of every ten customers said that they will buy from a business that delivers personalized messages and experiences.
Personalized messages and offers not only make customers feel special and valued but also show that brands genuinely care for their customers. That feeling and concern are worth more than many tangible rewards. If you’re looking to check on your customers to know how they’re doing in the tough times, give a personal touch to your messages. To send personalized messages, collect data directly from your customers. You also can leverage your loyalty platform to get first-party customer data.
2. Focus on emotional loyalty
Brands that succeed in creating an emotional connection with their customers enjoy higher customer satisfaction and generate massive sales, revenues, and profits compared to their competitors. A Capgemini report found that as much as 70 percent of customers with high emotional engagement spend twice as much as customers with low or mild emotional engagement. The same study revealed that 80 percent of customers with high emotional engagement would always buy from the brand they are loyal to when making purchasing decisions. Another report by Motista found that customers who are emotionally engaged with a brand have over 300 percent higher lifetime value.
To reinforce emotional loyalty, use your loyalty programs to touch the five key components of emotional loyalty—trust, belongingness, recognition, gratitude, and emotional engagement. Design your loyalty programs in such a manner as to win the trust of your prospects and existing customers. Recognize your valuable customers and create a sense of belongingness with your brand. Also, thank your customers for doing business with you and engage with them regularly even if some of them don’t buy as frequently as they did in the past.
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3. Leverage digital solutions and focus on the omnichannel experience
Using digital solutions is an extremely creative and effective way to reward customers. One of the best ways to digitize your loyalty programs is to gamify them. Gamification is the process of using game elements in loyalty programs. By gamifying your loyalty programs, you can understand your customers’ preferences, enhance social sharing, make your loyalty programs appealing, and increase the ROI on loyalty programs.
In addition to gamifying your loyalty programs, have a robust mobile presence so that you can send digital loyalty points, app-only discounts, and push notifications. Also, use an omnichannel platform to provide loyalty rewards. An omnichannel loyalty program enables customers to participate in loyalty programs using a wide range of channels and create wholesome experiences for them.
4. Balance financial rewards with non-transactional benefits
While earn-and-burn loyalty programs are among the most effective loyalty programs during a crisis, mix transactional rewards with non-financial benefits. Use traditional loyalty programs whenever you can as they can enable customers to exchange points for monetary rewards such as coupons. These loyalty programs provide customers with ways to save money and will reinforce the bond with customers.
Earn and burn loyalty programs will make your customers remember that your company helped them out in their time of need, which will make them more loyal. To complement the financial rewards, use experience-based benefits to ensure a delicate balance.
In a time of crisis, businesses of all types and sizes must rethink and modify their loyalty programs to retain their most loyal customers and successfully navigate the uncertain and challenging times that lay ahead.
If you’re considering modifying your loyalty programs, we at LoyaltyXpert can help you do so. We have created effective and successful loyalty programs for many companies across industries and we can do the same for you. To know how we can help, contact us today.