The 4 Loyalty Mechanics

13th January 2022

Written by Tom Peace

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The 4 Loyalty Mechanics

13th January 2022

Written by Tom Peace

Loyalty schemes aren't purely cards and offers, there are four main mechanics organisations use to retain customers:

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Top 5 Reasons why your Loyalty Program is struggling

1. Data

Many companies leverage data and personalisation to keep people coming back for more. If offers are always relevant to you, at the right price point or aligns with your previous choices, you're more likely to continue buying, watching, listening or sharing.

We all love bragging rights so having lots of data we can easily share with others such as running statistics to how many hours we spent listening to heavy metal increases the reach of your brand.

Best examples: Strava post-activity report, Spotify wrapped and Spotify discover weekly, Netflix's dynamic cover images.

How you can harness data: Segment your shoppers to give them the best recommendations and even creative or call to action based on what's worked previously or use AI to present their data back to them in a fun and easily shareable format.

2. Subscription

By buying into a subscription, even at a low price point, consumers are more likely to then go back again and again to your brand over others. If you have already paid for priority delivery slots with Tesco Groceries you're more likely to choose them over Morrisons for your next shop.

Best examples: Amazon Prime, ASOS next day delivery and Pret A Manger.

How you can harness a subscription: Introduce additional benefits at a low price point that makes it easily accessible for example £10 for next day delivery for a year, £20 for community access for a year, £5 for exclusive access to new releases before the general public.

3. Experience

Brands that surprise and delight or provide a really great and memorable experience keep customers coming back again and again. Standardising your products and services to the point where someone always knows exactly what they will get is a great way to retain customers, hence the never-dying popularity of big fast-food chains.

Best examples: McDonald's standardisation of service and food, John Lewis, Hilton, Decathalon.

How you can harness customer experience: Having set packages with expected services or going above and beyond those expectations for an experience they'll want again and again.

4. Value

Providing fantastic value with either a low price point, great deals or always adding additional value with offers and upgrades means customers get the most for their spend. Aldi never have offers because their goal is to consistently provide the lowest price point and greatest value they can, all year round. Companies reliably running regular sales are also perceived to have a greater value for the spend (even if the sales never end).

Best Examples: Aldi, PureGym, Amazon, Boohoo.

How you can harness value: Is there a product or service range you can keep at a low price point to make it accessible? If not, seasonal offers or incentives and regular giveaways can keep people coming back for more.

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