I got some comments about my last blog on two leading rewards/loyalty programmes (NextBee and Fielo) and driving loyalty through rewards. Plus concerns of customers being loyal to the programme rather than the brand. All worth discussing.
Coincidently when truncating the two terms, rewards and loyalty, the word ‘re-alty’ is created. Quite aptly I believe. Turning to the trusty thefreedictionary.com the meaning of ‘realty’ is: “belongings, property, holding – something owned; any tangible or intangible possession that is owned by someone”.
These words speak to me about ‘customer loyalty’ (intangible possession), ‘rewards’ (belongings), and ‘perception’ (owned by someone). The kind of words that resonate with rewards and loyalty.
But coming back to the point. Rewards provide an opportunity to enhance loyalty. For example, rewarding someone for being a customer for 5 or x years is a nice thing to do and is generally appreciated by the customer making them more loyal.
Also offering customers a reward (or incentive) to change their behaviour e.g. go to online billing, may increase their loyalty to the brand. Friend get friend offers (referral) using rewards will work if there is customer loyalty; as you don’t recommend something you don’t rate to a friend.
So in my opinion rewards and loyalty work hand in hand. However, some rewards such as a reward for not leaving (typical in the electricity sector) doesn’t recognise loyalty but is more blackmail.
Further I believe that there are different levels of loyalty, for example:
- Despite rewarding a customer, a bad customer experience or competing offer may make them ignore their level of loyalty and change brands
- Some people are more loyal to the programme than the brand.
With the right programme, you can manage rewards to maximise the benefits and limit the downsides of a loyalty programme. My previous and next blog will cover more about the best options for rewards/loyalty.
Being part of an umbrella rewards/loyalty programme makes your brand part of the programme and the drive for rewards can be more important than your brand. Being part of a programme rather than having your own also has an impact on the perception about rewards. Progressive Brand’s One Card and New World’s Fly Buys are a good example of perception about ownership and brand.
Go 2 Market principle: as always, customer perception (their ‘realty’) is the important thing. Use rewards within the right programme, manage the rewards to drive loyalty and create something that works for you and your customer. That should be your reality.