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How to Personalize Experiences and Win Customer Loyalty

By February 9, 2022September 13th, 2022Article

How to Personalize Experiences and Win Customer Loyalty

Your top 5 loyalty questions answered by a business to consumer (B2C) loyalty expert.

Man making online purchase.

Earning customer loyalty remains one of the top priorities for brands and one of the hardest-to-achieve goals. Customers expect seamless, personalized experiences and offers whenever they engage with a brand, and they’re willing to go elsewhere when those expectations aren’t met. Building long-lasting customer relationships depends on how well brands navigate the always changing landscape of loyalty technology, services, and trends.

Mary Pilecki, vice president, principal analyst, Forrester, leads the company’s loyalty coverage. Her research focuses on loyalty strategy, loyalty programs, consumer trends, and the tools, skills, and processes business-to-consumer marketers need to manage and measure customer relationships. Prior to our webinar in which Mary was a guest speaker, she joined for a discussion about her insights into customer loyalty, including how brands can build and leverage it.

The following has been edited for length and clarity.

How can appealing to consumers’ emotional drivers help brands enhance customer acquisition and loyalty?

Pilecki: Data from Forrester’s Customer Experience Index (CX Index™) in 2020 and 2021 demonstrates that the emotions customers feel after an interaction with a firm can greatly affect loyalty. In fact, the top positive emotions that bind customers to brands are feeling appreciated, respected, and valued.

And emotion drives behavior. When a company makes a customer feel appreciated, 76% indicate they’ll keep their business with the brand, 80% say they will spend more with the brand, and 87% will recommend the brand to friends and family members. The last thing a brand wants is for its customers to feel nothing about it. Those consumers are unlikely to take any action.

What role do you see exclusive offers and discounts playing in a brand’s acquisition and loyalty strategy and programs? How important are discounts and incentives within a loyalty program?

Pilecki: According to the 2021 Forrester Analytics Consumer Technographics® Retail Topic Insights Survey, 69% of U.S. online adults state that instant discounts in a loyalty program are important to them, and 62% state that reward certificates are important to them. Consumers expect loyalty programs to save them money as a reward for their business.

But growing in significance are experiential benefits such as enhanced customer service (52% of U.S. online adults agree that is important), the ability to earn special status (52% agree), and the opportunity to provide feedback to the company (53% agree). For many brands, it’s valuable to offer a mix of financial and experiential rewards in your program.

How do you see brands successfully balancing transactional and nontransactional benefits?

Pilecki: Customers now want both transactional rewards, such as discounts and offers, as well as nontransactional, or experiential, rewards. The nontransactional benefits enable the brand to keep customers engaged even when they aren’t buying. For example, Starbucks Rewards offers “Stars” for purchases, which can be redeemed for beverage add-ons, free drinks, or select Starbucks merchandise. And through its mobile app, Starbucks also offers fun, seasonal games and a link to Spotify to stream music — helping keep customers connected even when they aren’t anywhere near a store.

Sephora’s Beauty Insider program’s benefits include points and discounts as well as such exclusive experiences as one-on-one consultations with talent from beauty product companies and membership in a community with a variety of groups focused on different types of beauty products. Loyalty members of these programs stay more engaged because of these experiences.

Why is value-based buying increasing in popularity? How are you seeing brands successfully meeting that demand and giving back?

Pilecki: Forrester detected the early rise of the values-based consumer nearly a decade ago when consumers began noticing the social, moral, political, and environmental impact of company decisions.

In 2017, 52% of U.S. online adults agreed that company values influence their purchase decisions. By 2019, values-based employees and investors joined consumers in demanding that companies take a stand on social impact issues and prove accountability. Then the COVID-19 pandemic forced consumers and businesses to take action to protect themselves and their employees.

Consumers are seeking out brands that share their values, and many brands are stepping up. Target’s corporate responsibility efforts are broad, and it reports its results regularly. Chobani displays a strong commitment to nutritional, social, and environmental wellness and has added plant-based and sugar-free alternatives to its traditionally dairy-based product line. But espousing values comes with a risk: Consumers will drop brands that don’t keep their trust by demonstrating integrity, competence, and transparency — actually living their values.

What are the key challenges with collecting customer data that businesses are facing? How can loyalty programs and identity resolution help brands overcome those challenges?

Pilecki: Data deprecation is the loss of previously accessible data due to growing privacy laws, browser and operating system restrictions that impact identifiers and device IDs, and the coming elimination of the third-party cookie. That concerns marketers who rely on traditional tools to understand their customers.But loyalty programs are an effective tool for collecting zero-party data — personal information that consumers willingly share in exchange for some value.

According to the 2021 Forrester Analytics Consumer Technographics® Benchmark Survey, 63% of U.S. online adults will share more personal information with companies when motivated with a reward such as loyalty program points (37%), better customer service (14%), early access to new products (9%), and cash rewards (30%). Given that this information is coming directly from customers, it’s a far more accurate source of data, as well.

Brands are using short polls and fun quizzes to gather data as well as employing identity resolution to more precisely characterize a person looking at products online. Smart firms are turning these insights into actionable, relevant product recommendations, tracking emotional loyalty, and improving their marketing performance.

Want to learn more about loyalty? See how UNTUCKit optimized their promotional checkout experience and accelerate demand by using to offer group discounts.

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