4 Brand Loyalty Dead-Ends
The 4 most common brand loyalty dead-ends, and how to get around them.
- Your research shows that people just want discounts.
We often hear from research teams that “people just want discounts” as part of their membership. And who wouldn’t? Of course people want free stuff. But a strong loyalty program is going to think about what other needs we can preemptively service — not just hand out discounts. Membership should make the brand more valuable, not less. We should think about loyalty programs as providing upgrades, not discounts.
The way out: It’s time for a head shift. Instead of thinking about how a member can get something for $80 when it was originally priced at $100, the framing should be in terms of an upgrade — getting something worth $120 in value for $100. When you discount, you discount the brand. When you give an upgrade, you upgrade the brand.
Discounts cheapen. Upgrades show care.
2. Your loyalty team sits in a silo.
“We want to be member-first and consumer-centric.”
Everyone says this, but few understand what it takes to live it as an organization. It requires true cross-functional alignment in defining members’ needs in order to answer how an entire organization can service them. The trap we often hear is that other parts of the organization don’t want to get involved in membership, that it’s just marketing’s job — but the most successful approaches go deep across functions in order to address member needs.
The way out: Reframe membership as a holistic business strategy across functions, not just a marketing tactic. Membership, in many ways, is about how well your business knows your audience and how you will serve them in an ongoing way. Admittedly, this is very difficult in large organizations. But pull this off and the lifetime value, and relationship, with your consumer will flourish.
3. You’re trying to create the Skymiles of (insert industry).
“We need the Skymiles of X.” We often hear businesses say they want a solution based on another model they’ve seen. “Could we be gamified like Peloton?” Well, that model may work for them, but it may not be the model that works for you. And just because it’s a program that you personally benefit from doesn’t mean that it’s a structure that will serve your members’ needs.
The way out: Define your purpose and value, not tiers or levels. We often see loyalty programs built in a way that reveals their own business objectives. This frequently take shape as, “Spend x, get y” offers. Delta’s most recent loyalty refresh is a good example of framing member benefits in terms of the organizational objective, not the consumer benefit.
The truth is that membership structures can take all forms, and can also creatively range from being hidden or “implicit” to fully branded and “explicit.” What feels right for you brand? The chances are high that it’s probably not a an exact replica of a program that exists today.
4. You start your loyalty work by thinking about value extraction.
Nothing sends shivers down our spines more than the words “value extraction.” Would you personally get into a relationship with someone who had this mindset? If your mentality is extraction, you’re not thinking about what you can provide to the other party.
The way out: Think of revenue as an output of relationships. Businesses need to do everything possible to create the relationship, and then the hard business results will follow. Often this means being loyal to your members first. Membership is built this way — by developing ongoing relationships. And relationships begin with a spirit of giving.
Ask yourself: What can we give before we take?
Hellen Contributors: Pierre-Laurent Baudey, Elsa Perushek, Peter Petrulo, Jason Zabel, Adrian Ho
