I recently read a user story about how Harlequin — a publisher of romance novels — keeps its customers loyal. I don’t usually give a plug to a company like this, but for what it’s worth, Stellar Loyalty provides technology to make loyalty happen.
What’s interesting to me is how many of the ideas in my current book, You Can’t Buy Customer Loyalty… (I know, another plug) are put to good use by this publisher. The things that I think work really well include emphasizing a consciousness of customer loyalty, keeping things simple, and focusing on personalizing relationships and engagement.
Consciousness is relatively easy, but someone high on the org chart has to be willing to say, “This is important.” Other things might be important to the publisher too, like finding good writers and editors, but that’s in a separate realm. In the customer realm, being conscious of working to maintain relationships is about as important as it gets, because it becomes the animating principle for everything else.
Consciousness and Simplicity
Consciousness of maintaining customer loyalty works for me, because it’s already my primary focus — but for lots of people in organizations, that’s not true. People have jobs with concrete deliverables and expectations, and unfortunately there aren’t typically metrics for individual customer loyalty promotion.
It’s something the organization has to do both together and as individuals, so starting with consciousness is really a pretty smart idea because it leaves less to chance.
Simplicity is another big idea that comes from other research. Customers — you and I — have a lot on our plates, and we don’t always want or need a vendor’s extravagant display of affection to make us know we’re loved. What we crave is time, and that boils down to simple processes and systems that we can get through on the march through the daily bucket list.
In Harlequin’s case, simplicity means having a mobile app that enables customers to scan receipts to notify the loyalty program of a purchase, so that rewards points can be tallied automatically. Giving points for this activity is important to the publisher, because it provides insight into who is buying what, and where — and if you’re selling books, that’s pretty important. It also provides the data that enables personalization at a meaningful level.
More importantly, though, Harlequin places equal emphasis on the ways customers reach out. You can’t ask for better a sign of loyalty than a customer engaging online by writing a review, posting on the company’s Facebook page, or answering a survey. These are the types of engagement that any company would want, because more than a business’ outreach to customers — which can be ignored — these actions identify things that motivate customers to reach out.
Metrics Behind Movement
Harlequin analyzes all of the customer data that it collects, which helps it both to identify customer moments of truth, and to assess how well it is performing in them. That’s how constant improvement is built into a loyalty program — by a company knowing what customers care about and then ensuring that’s where its people and automation place their focus.
Consider some of the metrics that the publisher shared in the use story:
- Percentage of customers who engage with the loyalty program monthly, and the direction of the trend;
- Percentage of customers who redeem rewards, and the percentage who have redeemed multiple times;
- Percentage of members providing feedback, and the percentage of feedback that’s positive (much more useful than a Net Promoter Score); and
- Time in the loyalty program and propensity to repurchase.
Almost any company could benefit from a program like this, with a few well-chosen metrics. Companies increasingly are moving in this direction and away from simply awarding points based on purchase transactions, my studies indicate. The simple reason for the movement is that it takes much more than points to keep customers in the fold, and more than simple transactions to diagnose vendor health.
That’s why loyalty programs are taking on greater prominence — but not just any loyalty programs. Modern loyalty is based on customer engagement and understanding moments of truth, so that vendors can be there when customers need them. If you’re wondering about your loyalty program, this is an approach to get you thinking different.