Engage to increase loyalty
Product marketing is no longer sufficient to ensure a company’s success in this day and age. The financial success of the many brands that surround us is actually largely determined by their customer loyalty. A company must provide a positive customer experience as well as opportunities for customers to interact with the brand in order to establish that loyalty. As a result, it is crucial to remember that a positive customer experience and active customer engagement contribute to increased customer loyalty. See how to engage to increase loyalty!
The six behavioral manifestations of engagement
Loyalty programs have been increasingly popular as a way for businesses to build stronger relationships with their customers. They also frequently succeed in attracting new members without committing them to the brand in the long run.
For decades, customer engagement has been the topic of numerous marketing research studies. And yet marketing researchers are only now beginning to investigate the topic of loyalty program engagement.
In fact, Bruneau’s study aimed to comprehend what member engagement with a loyalty program was, as well as measure how that would connect to engagement with the brand.
Six behavioral manifestations of loyalty program engagement are highlighted in the study:
- Proactive use of the loyalty card.
- Receptivity to the information the company shares about its loyalty program.
- Redeeming points.
- Adapting purchase behavior.
- Sharing and seeking information about the loyalty program.
The study proposes that loyalty program engagement may be measured along six behavioral manifestations with varying levels of effort. For instance, redeeming points or using your membership card are less time-consuming recurrent actions than sharing or actively seeking information about the program.
The researchers also point out that measuring member engagement with loyalty programs based solely on transactional behaviors is no longer sufficient. Modern programs now include not only monetary incentives, but also experiential and social incentives, such as personalization of offers and communications, as well as invitations to special events.
The researchers used a 20-item scale to evaluate a novel method for measuring the six manifestations of customer engagement with a loyalty program. Earlier research on the subject mainly looked at proactive usage of the membership card and point redemption as markers of loyalty program engagement.
Measuring engagement
The results of this study showed that neither calculating the ratio of active participants, i.e. the number of program members who use rewards or incentives to the total number of members, nor calculating the redemption rate is adequate to measure members’ engagement to a loyalty program.
The redemption rate is a fundamental performance metric that, on its own, does not accurately reflect loyalty program members’ level of engagement.
On the other hand, the results suggest that traditional member engagement performance measurements should be examined along side indicators that assess engagement which require more time and effort.
As a result, businesses must track changes in member purchasing behavior, as well as actively searching for information regarding loyalty programs. They can track the effectiveness of targeted cross-sell and up-sell promotions and the transfer of in-store transactions to the transactional website. They can also track information posted on the company’s own media or the program’s members-only community forum, for example.
Engage to increase loyalty : A method of interaction
Finally, the authors conclude their research by reminding us that loyalty programs are frequently consumers’ primary method of interaction when forming a relationship with a brand.
As a result, it is critical to maximize member engagement with the program. If a member’s level of engagement with the loyalty program stays low after enrolment, his engagement with the brand may never reach the desired level.
Companies that encourage higher-effort engagement habits, on the other hand, are more likely to better engage and connect members with the brand.
Reference : Bruneau, V., Swaen, V., & Zidda, P. (2018). Are loyalty program members really engaged? Measuring customer engagement with loyalty programs. Journal of Business Research, 91, 144-158.
