How to Boost Customer Loyalty

Mikhail Korytov
Grom
Published in
7 min readNov 27, 2020

How to Boost Customer Loyalty

In early September, Bond and Visa released their annual joint research on how to boost customer loyalty. In 2021, a year when the pandemic hopefully ends, these insights can come especially handy once the economy reopens.

About 70,000 respondents from 34 countries were surveyed, making this study the biggest in the industry’s history.¹ What trends have been growing stronger and stronger over years? What does the document tell us? What client requests should you pay attention to before it is too late?

In this article, I’ll talk about those metrics and takeaways from Bond’s research that I found most interesting.

How to boost customer loyalty in 2021: infographics
Source: The Loyalty Report 2020, Bond Brand Loyalty

These three numbers above speak for themselves, highlighting the benefits of having an interesting loyalty program.

72% are ready to recommend a brand to their friends. Personal recommendation is one of the most efficient advertising channels. If 72% of your customers recommended your brand to, say, just five of their friends, you could substantially grow your clientele at the end of the day.

How would you like that?

The only thing you need to do as a brand is help your clients a bit with making their word of mouth native and convincing. And that’s exactly where the service I work for as a Loyalty Engineer thrives.

78% are ready to come back if your brand offers an engaging program. Remember the stats? 20% of loyal clientele brings in 80% of sales. So here’s what happens if share of your loyal clients doesn’t drop or, quite the opposite, increases:

64% spend more to get extra bonuses and perks.

How to Boost Customer Loyalty in 2021: Hear from Bond & Visa

  • Create a unique purchase experience for your customers, make them feel valued
  • Go digital, bring your loyalty program on-line
  • Think outside the standard-loyalty-mechanics box. It’s essential to stand out from your competition
  • Organize your team’s work in such a way that high-quality customer care becomes the core principle. Motivate your teammates towards achieving that level, allow more flexibility
  • Partner with financial organizations and collaborate with others
  • Interact with your clients off-line. This format has been largely overtaken recently, but don’t neglect it (if possible)²

Let’s take a look at some of the latest cases introduced by big companies to see if they keep up with ever-changing consumer needs.

Lamoda

Last month, this leading post-Soviet on-line retailer started testing some interesting functionality.

Registered users will get rewards for performing useful actions: signing up, subscribing to news, completing profiles, leaving reviews, placing each 10th/100th/etc. order, reaching a high buyout rate, and choosing a self pickup or paid courier delivery option.

Users will also have access to unique brand badges. By earning them, they’ll be moving up the “Lamoda Club” loyalty program ranks and get bigger discounts on the next purchases.

“The launch of the ‘My Rewards’ section is a planned development in the Lamoda Club loyalty program. Gamification motivates users to improve the buying behavior on the site,” says Julia Nikitina, Customer Experience and Community Management Director at Lamoda. “Besides, My Rewards is personalized and based on the preferences of a particular customer. For example, during the first phase, Lamoda will offer a unique badge to loyal Nike customers.”³

Trends followed:

  • Loyalty program gamification
  • Rewards for useful actions
  • Digital channels

Yandex

Also last month, search giant Yandex launched a loyalty program that covers several services from the brand’s ecosystem.

The company positions it as cashback and addition to the Yandex.Plus subscription. Part of the money spent in Taxi, Drive, Lavka [‘Shop’ in Russian], Market, and other Yandex services returns to the account as points that you can immediately redeem at the rate of one point = one ruble.

Note how creative they are in promoting their service:

“Share your story with the world, and we’ll share the Plus points with you. Tell us how Plus helps you and what features you use most often. Publish a post on VK or video on TikTok or Instagram.”

Yandex rewards its users for creating and distributing content to promote the service. Users have an opportunity to earn points not only for purchases, but also for reviews and recommendations.⁴

Trends followed:

  • Rewards for useful actions
  • Partnerships and collaborations to deliver better user experience
  • Digital channels

McDonald’s

At the end of the summer, McDonald’s launched its first loyalty program in Russia. The program impresses with its simplicity and innovative plans.

Customers can now get a special QR code in the app and show it when paying at the desk or self-service kiosk to get back 3% in bonuses on each order. They can later use them to pay for certain items.

The program’s upcoming innovations include sending bonuses to friends, donating to the Ronald McDonald House charitable foundation, and exchanging the points for Spasibo [‘Thank you’ in Russian] bonuses from Sberbank and the other way round.⁵

Trends followed:

  • Non-trivial mechanics of bonus programs
  • Unique user experience, customers feeling valued
  • Cooperation with financial institutions
  • Digital channels

S7 Airlines

A few weeks ago, I received an e-mail from S7. The subject read, “Let’s play cities?” The company offered me to take part in an on-line game, progressing through which I could receive points and discounts on business travels. There also were several main prizes designed to increase user interest.

The rules are well known to everyone in the CIS region. Participants take turns to name a city that begins with the last letter of the previous one. In S7’s case, the user plays against the computer and has 15 seconds for each move.

If you name a city that is part of the S7’s network, more points are awarded. This is a great way to send users to explore the locations of company’s airports. Through gamification, the brand educates and rewards the user.

There are also easter egg discounts in the game that can be obtained for completing certain tasks.⁶

Trends followed:

  • Loyalty program gamification
  • Rewards for activities
  • Custom loyalty mechanics
  • Unique user experience
  • Digital channels

BMW

BMW’s South Korean subsidiary will soon launch a blockchain-based loyalty program called BMW Vantage.

It is a BMW Korea membership scheme that will allow customers to accumulate bonus points and use them to pay for products or receive discounts on the group’s services.

Buyers of the latest and largest BMW offerings (e.g., the new 5 or 6 Series) can earn up to 900,000 points.

Users also earn points through gaming elements and other social activities in the automaker’s mobile app.

BMW’s willingness to issue loyalty points specifically on blockchain is understandable: this will ensure complete security and authenticity (points cannot be faked), solve most problems with fraud, and open the way for easy collaboration with other brands and exchange for their points.⁷

Trends followed:

  • Custom loyalty mechanics
  • New technologies
  • Unique user experience
  • Rewards for activities
  • Digital channels

Summary

As you can see, all these cases have one fascinating feature in common: the points are accrued not only for purchases, but also for various on-line interactions with the audience. This is that very trend that’s constantly developing and will go mainstream in the coming years.

Most brands interact with their customers only at the checkout (that is, they accrue bonuses for purchases), taking up only ~0.001% of their customers’ time.

Why don’t brands want to interact with their clientele more and do it in a more interesting and intensive manner? Maybe they just don’t have a tool?

Let’s get back to the data we got from a survey of 70,000 consumers.

With an interesting loyalty program, the majority of users:

  • are happy to recommend the brand to friends
  • are more loyal to the brand
  • spend more money

To create an interesting program and increase consumer loyalty, it is necessary to use non-standard interaction mechanics, on-line channels, and award points not only for purchases, but also for useful actions (something big brands already do).

Pinpon is a tool for launching promos that improve loyalty and virality

If you are interested in rewarding your users not only for purchases but also interactivity, which would lead to improved user loyalty and virality of your content on social networks, try Pinpon.

Various brands and agencies are now connecting to our platform. We invite you to join closed access and launch a pilot campaign with us.

I hope cases in this article were useful.

Mike Korytov, Loyalty Engineer at Pinpon, mk@pinpon.io

Sources

1, 2: https://info.bondbrandloyalty.com/tlr-2020

3: https://retail-loyalty.org/news/lamoda-zapustila-nagrady-dlya-polzovateley

4: https://plus.yandex.ru/blog/article/guide-plus

5: https://mcdonalds.ru/mcdonalds_bonus

6: https://goroda.s7.ru

7: https://decrypt.co/44174/bmw-is-launching-a-blockchain-based-rewards-app-in-korea

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