Brand Loyalty Isn’t The Trump Card You Think It Is

You are wrong if you think that having scores of customers on your loyalty program is insurance against failing. The solution lies elsewhere

Lauren Dowdle
May 07 2018

Ask anyone who worked at Blockbuster, Borders bookstores, Toys “R” Us or any number of companies that ended up in the retail graveyard what went wrong, and you’re likely to get a slew of answers. However, when you really get down to the heart of problem, it all comes down to one main thing: relevance. Some might suggest it’s about customer loyalty — or a lack thereof — that sent these brands and others like them to their untimely demise, but that doesn’t seem to be the case when you ask customers, especially when you look at loyalty programs: 71 percent of consumers say loyalty incentive programs don’t make them loyal, according to research from Kantar Retail.

They are instead looking for brands that provide relevant options to meet their current needs. In the U.S. market, businesses lose $1 trillion in annual revenues to competitors because they aren’t relevant enough, according to consumer research from Accenture and the Harvard Business Review. And I guess many would agree that the mentioned brands were sufficiently lacking when it came to relevance, refusing to adapt and give customers what they really wanted — like options beyond their brick-and-mortar stores. So how (and why) did relevance begin to overtake loyalty when it comes to customer retention and ultimately the success of your business? To answer that question, it’s important to first understand how consumers are defining and demanding relevance.

Remaining the go-to brand

When you translate ‘relevant’ into marketing terms, it simply means your brand must provide a direct solution to what consumers are searching for, while also remaining the company they want to turn to.

Here are a few criteria you’ll have to meet to remain relevant:

  • Share what your company is passionate about to build that connection with your customers
  • These are ever-changing, so ensure you’re not only meeting their current needs, but also predicting the future ones they might not even know about yet
  • Analyze data, customer behaviors and what your competitors are doing to stay ahead of the curve
  • You want to be proactive, instead of trying to catch up with the direction your customers are going
  • Tailor their experiences so you’re meeting their specific wants and needs
  • Ease of use. One of the best ways to lose your relevant status is to make the customer experience a difficult one, whether that’s through purchases, finding information or your interactions

All of these components can also bring about a sense of loyalty with your customers. But if you’re only focusing on creating loyalty, you’re missing out on the bigger picture and what’s going to keep customers coming back long term. You can attribute that change to the ever-evolving customer expectations. Go back a decade or two, and companies competed mainly by price and product quality. Fast forward a few years, and more brands are focusing on loyalty programs and tailored incentives — things customers have shown they’re willing to pay more for. And now, it’s all about being relevant if you want to keep customers around.

A good example of companies adapting to this change is Target’s latest program.

Targeting new customers

The retail giant began offering its new Target Red to customers in the Dallas-Fort Worth area in April. While categorized as a loyalty program, Target Red represents the company’s desire to stay relevant with its customers. With the growth of the company’s Redcard stalling, they took steps to provide a new option that will reach consumers who aren’t interested in signing up for another credit card. That allows them to engage a segment of their base who weren’t getting what they wanted. Target Red gives customers perks like 1 percent back on every purchase that they can use on future purchases (needs), the opportunity to vote for a local organization where Target will donate (values) and discounts on delivery services (ease of use). Target said they went straight to their customers to understand how they could improve their loyalty program — or in other words, “How can we provide a relevant service?”

Tracking the trends

To figure out what it’s going to take to remain relevant with your customers, turn to the massive amounts of data you’re collecting. Consumer data contains a seemingly endless amount of value for your marketing team if you know how to properly harness its power — and that starts with reviewing the information. However, technology executives and decision makers estimate they are only analyzing about 12 percent of the data they have, according to a Forrester survey. Don’t be those guys. To improve its content relevance and online conversions, B2B publication implemented the Conveo intelligent search app, according to a case study. Not only did this allow them to compile all their content from across their platforms to be searched, but it also created two other benefits to users:

  • Pulls and surfaces relevant content for the topics in the content channels
  • Recommends the most relevant content based on factors like recency

The site experienced a 125-percent increase in their mobile conversion rate during a 12-month period after using the search app. The publication is also looking into personalizing their content using information like the user’s location, according to the case study. They’re creating a custom user experience that not only ensures relevance, but it also provides a level of personalization and engagement.

Don’t throw loyalty to the curb

While all brands need to make relevance a priority, that doesn’t mean they should throw their loyalty-building tools out in the process. Both of these factors need to play vital roles in your overall custom retention strategy if you’re going to be successful — and you can combine both for the best results.

Retention requires a multifaceted approach, so ensure all of your strategies are working together with the same goal in mind. Think about the entire customer experience and how you can remain essential for consumers.


Lauren Dowdle

Lauren Dowdle is an award-winning writer and magazine editor based in Nashville, Tenn. Her nearly decade-long writing career has covered everything from landscaping to marketing — plus being interviewed by Jay Leno and winning a backhoe-operating contest. When she’s not behind the keyboard, you’ll find her spoiling her four furry babies and exploring the city with her husband.

Be the first to comment on this post:


Get your free print edition!

Fill out your complete details below

Chars: 0
Chars: 0
Chars: 0
Chars: 0
Chars: 0
Chars: 0
Chars: 0
Chars: 0