3 Things I’ve Learned About Customer Loyalty Programs
As Executive Creative Director at CreativeDrive, I help fashion and beauty brands create content at the scale of e-commerce, leveraging that production model and workflow to create shoppable, channel-appropriate content for any platform. The purpose is to meet the customer where they are, closing the conversion gap between brand story and the transactional moment.
It’s no secret that the five year plans mapping out the future of e-commerce were drastically accelerated these past two years as a result of the pandemic. The days of gift-with-purchase customer loyalty approaches are behind us. The future, or actually, the present, is one that embraces data-driven personalization, offers a habit-forming, completely customized member experience, and delivers added perks like discounts, free shipping, and other unique offerings in thoughtful, useful (never one-size-fits-all) ways.
As customers shifted nearly all of their purchasing to online, craved connection and community, and had only digital stores to shop in, forward-thinking brands reimagined what the full potential of online retail could be. For example, Heinz has been a big winner in shifting to direct to consumer. They totally changed the playbook of a legacy brand, shaking up an industry that relied heavily on retail.
As we reflect on the first half of the year and move forward into Q3, my team and I are leaning into these three important lessons we’ve learned about creating customer loyalty in a post-pandemic world.
Lesson 1: Purposeful personalization is key
Truly impactful personalization leverages data in both a functional and emotional way. It should solve a problem, but must also “surprise and delight” the customer. In practice, this would mean that instead of offering a simple carousel of recommendations based on past purchases, you would build a curated feed that paints a much bigger picture. This could include tips about their previous purchases (like beauty hacks or fashion styling inspiration), content about trends they’d find interesting, give-back initiatives that align with their values, and predictive analysis that forecasts future purchases recommended from an influencer they follow and admire. This creates new value and unique interactions. It adds culture, instead of trying to fit into the culture.
On a practical note: Make sure that the data informing your algorithm is up-to-the-minute, because old data is poor data.
Lesson 2: Create a habit-forming destination
There is an explosion of brands out there. How can you keep them coming back to yours? Move past the consideration stage and focus on the loyalty/retention stage. Most customers don’t buy a new product daily. But they do interact with a brand’s products several times a day. Think: washing your face and applying skincare in the AM and PM. So instead of focusing solely on new sales, think about creating a destination that amplifies the brand experience for them in a meaningful, on-demand way. This includes all of the value-adding personalized content mentioned above (tips about their purchases, trends, info about causes, future purchase forecasts, etc.), but also interactive moments like games, quizzes, and entertainment.
Connecting the consumer with your brand messaging on a consistent basis and constantly sharing insights on how best to enjoy the product(s) they purchased from you are a recipe for retention.
As a bonus, you can use this organic content to test, learn, and inform advertising content. Leverage that data into paid posts to drive return on ad spend.
Lesson 3: Meet your customers where they are
There is a structural difference in how people see the world today compared to 2019. Most consumers are not going back to the old shopping ways—or the old ways in general. Platforms are evolving rapidly and the social media channels of today are the beta model of what is to come. Brands need to be more flexible than ever and meet their customers where and when they want to engage.
How to stay ahead? Focus on outcomes, not the platforms or channels. Brands need to get away from the internal silos and friction of channel conflict. New and emerging brands understand that it’s not about competing over which channel to be on, but to focus on where their customer is, meet them in that moment, and then be prepared to evolve to new platforms quickly. Legacy brands are still struggling with how to strategize retail versus e-commerce, especially as the pandemic affects regions differently. It's about how the consumer wants to shop, not where. Channels will always come and go.
Remember, the center of gravity has shifted away from retail to online in the last 18 months. 5 years ago, 12% of all purchases were e-commerce. Now it’s 25%, and 50% in China.
In closing, I know it seems like there is a lot to be done—and it can feel overwhelming. But you don’t have to do everything at once. Start with what you can do now, be honest about what you can accomplish with the resources you have, and take that step. But take it as soon as you can. Don’t wait. Quickly determine what you can reasonably do, and then do it. Execute, then test, learn, and repeat. Keep looking forward, and keep building from there.