Long Live Loyalty
Your customer is the most important person in your world.
Every time someone chooses to walk into your store, or order something from your website, or recommend you to their friends, it’s a vote for your brand’s future success. Those individual shows of support are what keep your brand alive and well. And those individual shows of support over time? That’s loyalty.
Loyalty is a powerful thing. Loyalty means your customers are consistently showing up for your brand. It means that you’ve done something right for them, whether it’s building a life-enhancing product, creating a convenient experience, or just bringing some delight into their life.
Loyalty is rooted in that symbiotic relationship between brands and their customers, but in the past decade it’s gotten off track.
Relationships, not transactions
The best thing you can do for your brand is to build a great relationship with your customers. A real relationship—that means 1:1—based on their wants and needs, that benefits both sides of the equation. The best way to build a relationship is to align your incentives with theirs.
When I say “incentives” here, I mean “what motivates you to make this decision?” or simply, “what is your why?”. For the sake of a relevant example, let’s say a brand decides to roll out a rewards program for the first time in their history. Their incentive will dictate what the program looks like. If their incentive is strictly transactional—increasing the number of transactions or flow of traffic to a store—the program will look familiar. Expect to see a lot of coupons or mass discount offerings if used within a certain timeframe.
On the other hand, if the brand’s incentive—their “why”—is to build a lasting relationship with their customer, then that rewards program will look much more personalized. Take REI as an example in aligning incentives throughout the customer lifecycle. Let’s start with their outreach and marketing—they’re a company that focuses on shared values and beliefs. They take action to back up their beliefs. They promote their products in partnership with real people who have used, tested, and believe in what they sell. Because if their products work as promised, then people are more likely to advocate for them. Then when it’s time to bring people into an ongoing “loyalty” program, the Co-Op that their customers pay to be a member of. REI Co-Op memberships include an annual dividend for future purchases at REI and a vote in an annual board of directors election—meaning their customers can have a voice in the future of the company.
That alignment throughout the entirety of the customer relationship—rooted in shared values, strengthened through great product, and solidified by giving the customer a voice in the company’s growth—is what builds true loyalty.
The trouble with rewards
Many rewards programs incentivize stand-alone transactions. They create fleeting, one-off moments that don’t serve the long-term connection between you and your customer. In some cases they even tarnish your brand.
Your customer may come into the store to use a coupon you sent out. That coupon (while serving the transactional purpose) sets the expectation that what you’re selling has a lower value than it’s listed for, and it tells your customer to make their choice based on price tag alone. The traditional rewards equation prioritizes low cost over quality, convenience, and value alignment—the transaction over the relationship.
I am all for good deals, and getting extra value for customers wherever we can— but those are better served when there is an authentic relationship to build on. Transactions are temporary, relationship are what last.
Make your brand, your customer’s brand
So how do you build long-term relationships and lasting loyalty? Let’s talk about ownership.
Imagine one of your customers—maybe a 30-something in Iowa with two kids in tow, or a teenager who just got their first paycheck from a new job, or a recent retiree, whoever it may be—get them in your mind. Now, imagine that the last time they made a purchase at your store they got a notification that they received shares of stock in your company. They became an owner in your brand. From this moment on, when they step into your store, they are in their store. And every purchase, every show of support gets them more ownership.
That feeling of pride—that ownership—is the only “reward” I know that grows every time a customer interacts with a brand. By becoming an owner in the stores they love, customers become more invested in the success of the store. They are probably less likely to step into a competing store as well—and why would they? It’s not theirs.
The impact of ownership
About 50 percent of Americans invest in the stock market. That’s it, just half of us. And I understand why. Did you know that 61 percent of Americans say they don’t have enough savings to cover a $1,000 emergency? As I see it, buying shares of stock and learning about the stock market are out of the question when working to build up savings or an emergency fund. At the same time, the stock market can be seen as overly complicated, reserved just for the elite. But giving stock—even in smaller, fractional pieces—creates an access point for the half of Americans who haven’t yet had it.
Investing in your customers may be a new, novel concept, but the limited research that exists shows how impactful ownership may be on the customer-brand relationship. A study associated with the Helsinki School of Economics found that of Finnish customers who became shareholders in a brand:
- 43% increased positive word-of-mouth about the company (meaning they also became more likely to advocate for you
- 33% ceased to buy competitor’s products altogether
- 38% were prepared to continue to buy, even if prices increased
Bear in mind that that study was conducted in another country, across a small number of companies. Yet there is still indication that by aligning incentives, you can do well for your customers and your company.
Everyone Deserves to Be An Owner
I want to make ownership the new standard in rewards. Through this vision, customers can understand their power to impact the brands they care about, and brands will prioritize values—not just prices—as a way to connect with their customer.
If you believe everyone deserves to be an owner, please reach out. Let’s keep the conversation going and make your store, their store.
Brands interested in partnering with Bumped can learn more here.