One of the joys of working in customer loyalty is the breadth of scope you have to influence it. Almost everything you do could contribute to an improvement in how your customer behave towards your brand and how loyal your customers feel. To make it drive business growth, you need to master the optimum combination for your brand based on what you do and what you know about your customer.
Some of the areas in growth are referral and partnership marketing along with subscription models. The resurgence is, in part, due to the improved tracking, testing and measurement capabilities. They are highly relevant for startups and ecommerce, who may have little brand equity and awareness. But also because they can complement, rather than cannibalize your other marketing channels.
Check out the full Loyalty Series
Referral and partnership marketing along with subscription models are all practical methods that can enable your brand to expedite the trust and relevance required for loyalty. I am a big advocate of including these in your loyalty strategy because together, or independently, they can take away some of the most common pain points for customers, providing you with the perfect hook for loyalty.
Referral Marketing
Your greatest asset is your customers. Whether you are a new or established business, small or large, there is real value in your customers helping you to spread the word about what you do. Word of mouth is an age-old marketing practice, however, this discipline has moved on in terms of real measurement and the opportunity to influence it through your digital capability.
Unlike traditional word of mouth, referral marketing calls on your advocates and encourages them to evangelize about your brand through a tracked process. In return for that referral, the customer and usually the person who is referred, are rewarded. It can be highly effective and efficient in driving new customers with the advantage that they have already been warmed up to what you do. Managed well this can become an advocacy cycle where the hard work you put in with your customers then starts to multiply under its own momentum.
By taking trading mechanics, such as discount and incentives and handing those over to your best customers to share with their contacts, it becomes less ‘cold call’ and abrasive. A potential new customer receiving a recommendation from a trusted source removes some of the hard work involved for you and for them in finding a product or service that they like. When your brand makes someone’s life easier, they start to value you – one of the golden rules of building loyalty.
In some industries, peer to peer recommendation can be as big an influence as any other claims or endorsement. If you have found your ideal customer, it’s likely they will know and be able to influence other people who are just like them. The reason referral works across so many industries, is because it scores highly on relevancy and trust, another two key contributors to loyalty.
The human aspect of this method is of high value to your brand. There is targeting and audience creation functionality in other marketing channels but this has an edge. When a friend or colleague recommends something to you, it’s not considered to be “advertising.” Your customer will already have the knowledge of who your brand is relevant to and has a relationship with the recommender so it’s less of a stab in the dark. What’s even better is that it can often be done before you have sophisticated customer tracking in place so it’s a viable option from the start of your business.
How It Works
Of course, there is still need on the part of the brand to create those great customer experiences. Nobody wants to recommend something that is a poor experience. But referral programs certainly develop advocacy from your existing customer base and can often result in recruiting high value customers through it. The brands who do well are those that offer kudos associated for doing it.
For the referrer, being considered someone who is a trailblazer, has found a new exciting brand, a niche product, bought a luxury item or experienced a unique service is something they want their friends to know about. When you really dig deep on what that great experience is for your brand, your customers will love you for it and want the credit for telling others – help them do just that!
As you would with any other campaign, apply test and learn methods to the implementation of referral. Consider where in the journey you are best to ask them to refer, how you are going to thank them for doing it, how you are going to incentivize the new customer to purchase and what channel you are going to get the best response from.
Try and find ways of getting a referral for more than just orders. Think about how this method can help you get leads, improve engagement in your content or gather feedback. Positioning a request for a referral in various points in the customer journey can enhance the results you get and actually support advocacy more broadly as you are actually asking these customers to be part of your brand, share in your success, and show how much they love your brand.
Partnership Marketing
The substantial growth in partnership and influencer marketing is really a reflection of referral marketing but with the opportunity to scale this considerably. Just as peer to peer referral can be highly effective in driving new customers, so too can brand partnerships and influencer marketing. However, it isn’t simply about hiring a celebrity for the day and it’s certainly not just for younger, edgier brands. Find the right people and organizations who share your brand vision and values so that you can mutually benefit from the association.
Just as referral marketing can introduce you to a new pool of your ideal customers through your existing base, partnership marketing can find you new audiences who may currently not be giving you any brand consideration at all. Because they trust your partner, who in turn is endorsing and advocating your brand, you can benefit from those potential customers.
How It Works
Improving the reach of your brand through popular but authentic brand partnerships can also widen out the appeal of your brand. The best bit about it? They no longer have to be the latest celebrity. These powerful alliances can be formed with anyone from a student to a stay at home mom, a comedian, a nurse, a crafter or a personal trainer.
People from any walk of life, who are specialized and knowledgeable in their field, who have something highly relevant to share with their audience can be a great vehicle for introducing your brand. Through your partnership, your brand sits right alongside that influence they have and benefits from that association. As with referral marketing, as long as the relationship is respected and nurtured, this can be made very authentic and lucrative. Though it is advertising, it’s a less invasive and more value adding method than display alone.
If you’re not sure where to start, using market data to highlight gaps in the reach of your brand can help you be specific about the types of brands that would make a good partnership. Or the kind of interests that would sit comfortably alongside your brand. Avoid going for obvious associations as they will appear disingenuous and lacking authenticity. You want increased reach and new customers through someone who really listens to them. Making these brand partnership selections based on gut feel can often lead to simply talking to your existing set.
Subscription Models
One of the reasons subscription models are a good consideration when building a loyalty strategy, is that they allow you to mimic a loyalty program without much investment. And with the option of enhancing or down-sizing it at a future date. In addition, they are particularly useful for businesses in their infancy and with little brand equity as it takes time for customers to have a series of great experiences and for that loyalty to build.
By creating a subscription model, brands can help in enhancing those great experiences in a short period of time and start to influence some of the behaviors you would like to see over time. They give your marketing great scope, can be the structure of some of your communication programs and, as with referral, allow you to create a sense of personalization and relevancy much sooner than through data alone.
Of course, a subscription model should be done ethically. This approach isn’t about simply locking customers into shopping with you and disadvantaging them when they choose to stop. It should be a fair exchange of value and benefits in return for consistent behavior.
Some of the most established subscriptions are within health and beauty where trial of new products, repeat order, and bundles are of high relevancy. Also, more frequently, this kind of model is being tested in areas like fashion, food, education, and lifestyle. To really hone in on what customers need and to provide a service in that space that they grow to rely on – these sectors must lean into core principles of loyalty.
How It Works
When you can design a subscription around what your customers love about your brand, your subscription model has the potential to be highly personalized, relevant, timely and helpful. Think about how it should feel to be part of that subscription. Where people are, for example, time poor, lacking inspiration or body confidence, for instance – your brand can fill that gap and give your customers the helping hand they need.
As with referral, find the pain point that your ideal customers are feeling and then focus in on that. Word of caution, however, before you start, be clear on why subscription is the right model for addressing this pain point. It needs to be something that makes sense for the customer to continue with over time otherwise you will experience high churn rates.
A discount alone is not a subscription model, but it can certainly serve as one of the perks. Don’t be afraid to use them, in fact, most customers would expect a preferential rate. But aim to make it a perk and benefit rather than the sole reason for being part of the subscription.
And of course, don’t forget delivery. This should almost certainly play a part in your subscription offering for all or, at least, some of the time. It is one of the best ways to remove the barriers to repeat and incremental orders with you versus your competitor.
Don’t forget to have some fun when creating a subscription that really meets what you stand for as a brand and encourages your customers to get involved. When they are invested in feeling a part of your business and your brand, that’s loyalty in the making.
Good luck and stay tuned for more on the art of customer loyalty.
This is the 8th chapter of the Loyalty Series. Read more here:
Chapter 1: What Is Loyalty and How Do You Recognize It?
Chapter 2: What You Need and What You Don’t to Build Loyalty
Chapter 3: Measuring Loyalty – What Are the Important Metrics and How Do We Find Them?
Chapter 4: Is Personalization Relevant in Loyalty Marketing?
Chapter 5: Rewarding Loyalty to Drive Growth
Chapter 6: The Relation Between Loyalty and Technology
Chapter 7: Establishing the Right Culture for Loyalty