Six Distinct Dimensions Essential for a Holistic Loyalty Program

Six distinct dimensions essential for a holistic loyalty program-min

In today’s landscape, there is no denying that the customer is king. Today’s shopper has more power than ever – with information at their fingertips and endless choices on where to buy their goods. In this world, there’s no wonder that brands are focusing more on customer loyalty and, by extension, their rewards or loyalty programs. Today, an average customer furiously hops between different websites and checks out multiple brands based on various factors before making a final decision. In comparison, many loyalty programs are static and outdated in today’s fast-paced digital economy.

The evolving customer expectations require brands to create personalized and holistic loyalty experiences. A holistic loyalty program should encompass all aspects of the customer journey. It’s not just selling flight tickets or booking hotel rooms; a comprehensive loyalty program should include all ancillary services — because they are post-pandemic keys to customer satisfaction and profitability.

What exactly is Holistic Loyalty Approach?

The holistic loyalty approach should combine technology with deep data analytics and strategic consultation to unlock multiple dimensions of loyalty, including transactional, social, advocacy, engagement, behavioral, and emotional. There is no one-size-fits-all answer to this question, as the holistic loyalty approach will vary depending on your customers’ needs. For example, while transactional loyalty will help encourage and convert new customers to repeat their purchases, behavioral loyalty and engagement-based loyalty programs can help improve customer trust in your brand. Each loyalty program has its benefits, and these elements work best when used in combination with each other.

Let’s look at each dimension that has its strength and is paramount to achieving holistic loyalty.

1. Transactional Loyalty

Transactional loyalty is accomplished by offering offers or discounts to customers, and it is a potent tool for bringing back customers. Transactional loyalty strategies are simple, easy to use, and give customers the indisputable feeling of getting a good deal. Instant discounts, in particular, entice customers to join loyalty programs. Transactional loyalty is an attractive and necessary ingredient in building brand advocates. Still, if combined with experiential loyalty, it elevates the member experience and creates a holistic and sustainable connection between brands and customers.

For example, The North Face provides its loyalty members with the perfect mix of Transactional & Experiential Loyalty rewards. As part of their VIPeak program, customers can earn points through traditional methods like making purchases and less conventional ways like attending events, checking in at specific locations, downloading the company’s app, and more. However, the most captivating factor of The North Face’s experiential loyalty program is its vast array of choices when members redeem their rewards. Customers can use their points towards unique travel adventures like mountain climbing in Japan or hiking to Machu Pichu. The North Face’s rewards program has propelled its customer experience to the summit. With different transactional loyalty strategies, brands should incorporate the right mix of offers depending on the customer’s interests and needs.

2. Social Loyalty

A well-planned and executed social loyalty program significantly impacts your brand. It increases early-stage customer engagement by encouraging customers to interact via social channels. Online recommendations, referrals, ratings, and reviews are all examples of Social Loyalty. It creates brand advocates by offering incentives to customers for referring friends. For instance, Sephora’s program to develop a community of influencers and reward them through personalized experiences was an instant hit among their customers. The campaign garnered more than 76k conversations and 1,500 active topics daily. They also expanded the program into multiple tiers. You can get more or fewer rewards based on spending over time.

Rewarding customers for their social loyalty enables you to build trust, provide a memorable customer experience, and strengthen their loyalty to your brand. Ultimately, social rewards programs can help you build brand advocates.

3. Advocacy Loyalty

While loyalty is often seen as clients’ purchasing behavior, advocacy is about what they say to others. Not only is advocacy free advertising, but it is also the highest endorsement your products and services can receive. When a happy user voluntarily advertises your products/services, that’s pure gold. Advocacy is significant for the effective customer experience. A critical driver for brand advocacy is the service and experience your brand can offer to customers. Happy customers go the extra mile to recommend the brand to their network. It is essential to provide consistent five-star quality, making the brands stand out from the rest. Brand advocates will share their experiences of interacting with a product.

“Shot on iPhone” by Apple is a creative way to encourage customers to use the product and uniquely capture different experiences. These user shots included photos ranging from colorful scenery to meaningful family photos. A creative way to encourage customers to use the product and uniquely capture different experiences.

Customers who feel part of a community co-create your brand with you.

4. Engagement Loyalty

At its most basic, engagement loyalty is how you interact with a customer to keep them interested in your product or service. On the contrary, keeping on top of your customer loyalty engagement means tracking how they are engaged, what type of engagement works, and, equally as importantly, what doesn’t.
Engagement loyalty programs incentivize customers for email sign-ups, newsletter subscriptions, survey completion, etc. This helps brands derive more profound insights into their customer base, leading to effective customer segmentation and better targeting. Moreover, this also enables brands to communicate more effectively with customers in a personalized manner through various mediums. If a customer realizes you will go the extra mile to please them, they are far more likely to feel valued — and to stick around. Engagement loyalty is an important strategy to increase customer loyalty.

5. Behavioral Loyalty

Behavioral loyalty is when a customer continues to buy/use a particular product or service. By nature, people tend to stick to convenience, which creates behavioral buying patterns. Rewarding customers for specific purchase behavior is another highly effective strategy. For example, if your website flashes, “Get additional 500 bonus points if you make three purchases this month,” it will encourage your customer to keep coming back. By enabling customers at multiple touchpoints, brands can succeed in creating more engagement and, subsequently, greater loyalty.

To improve the effectiveness of behavioral loyalty, machine-learning algorithms can be used to segment different customers into actionable clusters such as deal seekers, high spenders, or occasional browsers. Depending on the insights obtained, loyalty program campaigns can be set up for different categories of customers. Behavioral loyalty programs help in personalization, which can form the foundation for creating strong customer-brand relationships.

6. Emotional Loyalty

Emotional loyalty can be defined as a psychological preference and affective attachment, loyalty to a brand is demonstrated by favorable perceptions, opinions, and recommendations. Emotional loyalty is achieved when customers want to advocate for your brand because they feel connected. The human element in these relationships is natural, and customers crave that interchange from the brands they love.

Brands that share a deep, emotional connection with their customers tend to have a more holistic understanding of how they fit into their customers’ minds—what those customers need from the brand to make their engagement more fulfilling. A holistic loyalty platform helps brands connect with customers at an emotional level. A simple gift, free product, or exclusive promotion is an excellent way of extending thanks to a loyal customer. Through analysis of loyalty program trends and behaviors, brands can identify the best customers to target with elements of surprise and delight. Emotional loyalty lets you focus on understanding your customers’ perspectives, relating to them, and empathizing with them.

Final Thoughts

Combining the six distinctive dimensions can help you deliver a holistic loyalty program. A holistic loyalty program affects customers emotionally, ultimately helping the business with improved customer retention and increased business revenues significantly.

In addition, the multidimensional strategy can help companies to build relationships with their customers and create a sense of community and sustainability. A holistic loyalty platform doesn’t necessarily mean immediate revenue. What it does offer is exponential revenue build-up as your customers stay loyal and generate demand.