Having loyal customers – or even fans – for your organization, is an important achievement: loyal customers people generally advocate your brand, tell their friends about your services, and are fully engaged whatever you’re offering. Just for measures of scale, there are over 3.8 billion individual loyalty programs activate in the US alone, and the number is growing year over year. Loyalty is booming.
The Top 100 list of loyal brands of 2017, is led by Amazon, Google, Apple and Netflix. What this means, is that these brands have the most returning and happy customers. What do these brands have in common? For starters, they all focus heavily on technology. Secondly, demonstrate a seamless customer experience and thirdly, managed to disrupt an existing market landscape (Amazon for online orders, Google for search, Apple for smartphones and Netflix brought the cinema experience to your leaving room). Furthermore, it’s interesting to see that Retail heads up the Loyalty Industry list, followed by Automotive and Restaurants.
What does loyalty consist of? How can brands improve loyalty? And do you have control over it?
Functional, Emotional and Self-expressive benefits
If you want to drive loyalty, be sure to know the difference between three kinds of benefits customers derive from using a loyalty program:
- Functional benefits
The first type is functional. This simply means that users return to your brand because they get ‘practical’ benefits. This includes the actual (unique) product features, but also monetary benefits such as cashback, discounts, daily deals, card-linked offers, etc.
- Emotional benefits
Here, we try to engage customers by creating a compelling brand experience, that people remember and advocate. As such, we move from a functional to an engaging experience. For example, I return to apps like Medium, Instagram and LinkedIn because they are a platform for sharing, recognition and connections. As such, driving my emotional engagement with these apps.
Apparel brands, such as Forever 21, Nike or Zara also yield emotional benefits. For example, you might feel comfortable, confident, trendy, trend-setting or just part of a group when wearing their products. These are all emotional end-states arising from buying (and returning to) these brands.
- Self-expressive benefits
The holy grail of loyalty is self-expression. With this we mean: having a brand so strong, that people start seeing it as a way of living. For example: being part of the Harley Davidson clan by wearing a Harley jacket, putting an Apple logo on the back of your car, or tattooing a Nike logo on your ass. And, of course, I don’t have to mention the amount of diehard sports fans out there that would sometimes literally give their life for their favorite sports club.
Maslow & Loyalty: climbing the needs-ladder
Abraham Maslow created its famous Maslow pyramid in 1943. This widely used framework illustrates our (psychological) needs. He created a hierarchy in those needs, starting very basic and physiological, all the way up to intellectual and psychological. We basically ‘climb the pyramid’ as we grow and develop ourselves, both in a single lifetime, as well as society as a whole through the ages:
Now, this is not new information and is widely regarded as the default needs model. It becomes interesting when we bring our above mentioned loyalty benefits in the mix. Interestingly, we can match these 1-on-1 against Maslow’s pyramid:
Why is this important?
Because this allows us to consider loyalty and customer engagement as a hierarchical growth path, starting with the basic and moving ourselves up to the top. By doing so – just as in ‘real life’ – we ensure continuous development to reach the full potential one can be, just as an athlete wants to become the best athlete, or a parent wants to excel in parenting.
- Start with functional benefits with instant gratification
- Build the relationship by emotional benefits with delayed gratification (e.g. a benefits that can be used once per month)
- Improve and continuously strengthen the relationship by focusing on self-expression
“What a man can be, he must be.” – Maslow, 1954
Loyalty strategy as a ‘human development plan’
By drawing a parallel with Maslow’s pyramid, you can define your strategy by asking three simple questions:
- What can we offer to make people feel ‘safe’ with our brand (financially as well as personally) on the short term?
- What can we offer to make people feel part of a community (‘extended family’), on the longer term?
- What can we do to enable people to express themselves and fulfill emotional needs, as a continuous journey?
If you’re able to articulate clear benefits for all three questions, chances are you’ll make people feel secure about choosing your brand, make them feel part of a group and able to self-express themselves: just what we need to achieve an engaging experience.
By following Maslow’s analogy, loyalty is reached when people are motivated to advance to the next needs level, and are continuously motivated to improve. Create this motivation be carefully considering your loyalty offerings per pyramid-layer, starting at the bottom.