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CUSTOMER COMMUNITIES AND THE FUTURE OF LOYALTY PROGRAMS

Changes in marketing technology and consumer behavior this past year are setting the stage for innovative trends to come. In terms of customer expectations, marketers are just now beginning to identify and cater to the influence a person’s family and friends exerts on their buying behavior. A customer’s community not only affects how they personally view brands, but it’s also directly linked to how loyal they are to brands. The bottom line: if your brand is only marketing to individuals, you’re missing a vital opportunity to connect with influencers behind many of those purchasing decisions. However, acknowledging and communicating with a customer’s reference group isn’t the only trend certain to impact loyalty this year, as electronic payments and omnichannel communication are poised to redefine loyalty programs.

Here’s how looking beyond individual consumers can strengthen your brand’s loyalty rewards program and what trends will impact loyalty during the remainder of 2019 and into 2020.

Designing for Customer Communities

Brands have traditionally approached the relationship between themselves and their customers as a one-to-one dynamic. However, as we witness increasingly large groups of consumers engaging collectively with brands, it has become important to recognize each individual in that social circle and understand the relationships among all members. Financial and motivational differences can be expected among the individuals of most groups, so brands must make determinations about how they are going to treat the collective. Regardless of the industry, brands must be very strategic about how they communicate with customers’ communities. The more ease and versatility a program offers, the greater likelihood it has of group adoption and advocacy. On the other side, if they offend one member, they risk offending the entire group.

Once brands start seeing customers as members of communities, it’s vital to understand the underlying motivators driving repeat customer visits. Oftentimes patrons keep coming back, not because of the product, building or facilities, but because of the relationships with others while engaging with brands. Take the gym, for example. We’ve applied HALOfit for cycling studios, among other fitness-related clients, and we’ve found that repeat business and engagement is really built upon connections with instructors and fellow gym members.

We’ve come to realize that rather than just friendship, these relationships represent support systems or competitive systems to consumers. In the example of the gym, some people go to compete and that’s the motivation – the relationship to the building means almost nothing. For others who view their gym network as a support system, the relationship with the trainer may be key. In stores, hotels or restaurants, these networks may be with clerks, waiting staff, or receptionists, to mention a few. As opposed to having any connection with facilities or buildings, this loyalty impetus is socially driven. Successful loyalty programs understand and are able to fully optimize such group dynamics, treating those patrons as a collective customer rather than a single one.

Greater Adoption of E-Payments

Beyond recognizing communities of customers, 2019 will see a number of critical changes to loyalty. The first trend is electronic payments. We’re seeing electronic payments changing everything, and the past few years are only the beginning. There are a lot of changes happening which are impacting industries from retail to restaurants and hospitality to gaming, and there are a lot of new technologies being introduced. These technologies can determine how consumers make purchasing decisions and carry out these transactions, which are dynamic advancements and a drastic change to the current status quo.

The epayment and epurchasing structure is critical because of the rich data it provides for actionable marketing not just after the fact, but during the actual purchasing decision and through the consummating of the sale. Additionally, when payment is put in the hands of the customers, it enables the company to focus on creating a phenomenal customer experience. For example, Apple employees are able to perform the hands-on expertise Apple is known for, without having to also juggle being cashiers. We’re also seeing companies like Whole Foods perfecting their order and delivery systems thanks to Amazon. Personally, I’ve had the opportunity to engage with electronic payment options for both of the aforementioned brands, and not only have the purchasing and epayments made the experience seamless and more enjoyable, but I find myself as a customer investing more of my own time and money in those brands as a direct result of these experiences.

Understanding your Best Customer

Another critical theme to loyalty in 2019 will be establishing the building blocks of omnichannel so that brands are able to determine the difference between a great customer and a not-so-great customer. Brands will really need to understand the dynamic of who, what and where their best customers are and we’re seeing a continued shift in this direction. This is a requirement for every company, no matter where they are on the loyalty journey. There’s always opportunity to know your customer better, to improve the customer experience and to enhance the delivery of that service and brand promise to the customer.

The influence of reference groups – social groups, work groups, family or close friends – on consumers’ behavior and attitudes cannot be denied. With that in mind, brands who truly want to cater to individuals must target the collective if they want their loyalty programs to offer an experience that will resonate across the board with both the customer and their communities. As 2019 rolls on, this perspective, along with optimizing electronic payments and ingraining an omnichannel approach, will go a long way in ensuring that your loyalty program will keep bringing customers back to your brand, albeit with a crew in tow.

About the Author: Jon C. Wolfe is the founder, president and CEO of House Advantage, an international customer loyalty, marketing, strategy and technology company headquartered in Las Vegas, the CEO of eTouchMenu, a sophisticated menu, ordering, and electronic payments platform, and a member of the Forbes Technology Council. With over a quarter century of senior casino management, technology and loyalty experience in the gaming and hospitality industries, Jon is widely considered an expert in business intelligence and loyalty technology and is renowned for his ability to leverage patron information across integrated resort operations to drive revenues and profitability.

 

 

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