Gaining a customer’s loyalty is essential for expanding brand visibility and increasing sales. From discounts on new purchases to accumulated travel miles, loyalty programs have evolved over 200 years to offer memorable and high-value benefits. How can digital strategies bring users closer and transform them into recurring buyers?
Loyalty programs are essential when it comes to sustaining and strengthening customer relationships. These strategies allow organizations to increase Customer Lifetime Value (CLV), which translates into increasing the value of their existing customers.
Why is it important to invest in customer loyalty?
While delivering an excellent service or offering a high-quality product is fundamental, it is equally important to offer supplementary services or added benefits to differentiate and excel in the face of competition.
Going above and beyond to exceed customer expectations is key to winning loyalty and standing out from competitors. By providing an exceptional experience that surpasses what they anticipate, we leave a lasting impression on customers and strengthen their connection with our brand, pulling them further away from the competition. Furthermore, investing in customer loyalty has the added benefit of expanding the CLV curve.
There are concrete reasons for companies to consider customer loyalty as a central part of their strategy. Among the main reasons are:
How have loyalty programs evolved?
Loyalty strategies are not new. There are documented cases from the 1800s of companies providing gifts or other benefits to customers who showed consistent purchasing behavior.
These strategies have evolved. For instance, in the past, customers would receive a stamp with each purchase, and these collected stamps could later be exchanged for products or gifts.
Over more than 200 years, loyalty programs have evolved to become more personalized, accessible, interactive, and emotionally engaging. Companies strive to establish stronger and lasting customer relationships by offering relational value beyond commercial transactions.
American Airlines, pioneers in loyalty programs
From 1981 onwards, loyalty programs began incorporating technology. The first company to do so was American Airlines with Air Miles. It was a pioneering mileage program that other companies in the travel industry subsequently replicated.
As the adoption of this loyalty method grew, American Airlines found the need to develop a new strategy that offered more advantages: AAdvantage. This «Privileged Customer Club» relies on its CRM’s information regarding each customer’s behavior. This evolution provides company-specific benefits like access to VIP zones and expedited boarding and includes benefits from partner companies. Other companies also imitated this concept.
Content and Communication: the 3rd Stage of Loyalty
Recently, loyalty programs have shifted their focus toward information and content.
The content does not necessarily have to be directly related to promoting the brand’s products or services, but rather providing advice and information to help the target audience learn and stay informed. By receiving these «tips» and valuable information, audiences increase their trust in the brand and recognize them as industry experts.
In this regard, the following cases stand out:
The Era of Building Loyalty through Digital Experiences
Although these strategies are relatively new, the latest innovation revolves around fostering loyalty through the Digital Experience.
As we’ve observed, investing in customer relationships and relevant digital experiences is key to gaining a competitive edge and maintaining a prominent position in customers’ minds. Are you delivering exceptional value? If you want to learn how to create the best Loyalty strategies, we invite you to contact Gerardo Sama, Loyalty Services Director.