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What drives loyal behavior beyond discounts?

Try service with a smile


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Experience.

Loyal behavior comes down to human nature. Put simply, people will buy from and do business with businesses they like. That applies across industries and sectors. Product quality matters, of course, but given an equivalent product, service with a smile will keep customers coming back. The consumer will choose the brand that is perceived to provide more relative value.

To create a sense of relative value in an effort to drive loyalty through analog force, companies use rewards programs to gameify the repeat customer experience with the same brand over and over. Loyalty programs like these were first invented by airlines, perfected by credit card companies, and then distilled to their most raw forms by dry cleaners, coffee shops and pizzerias. 

Buy 10, get one free. Gain access to insider discounts by doing x, y, or z.

These programs attach specific rewards to specific behaviors.

Some companies have tried to translate these programs into the digital age, but customers have become increasingly savvy at identifying buzzwords, scuzzy phishing operations, vying for their information, in a not-so-subtle effort to bombard their guests with marketing follow-ups.

So now what?

While these programs are and will continue to be impactful and quantifiable in many ways, we can't ignore the seismic shifts happening right now as consumers use technology to more nimbly engage with consumer-facing businesses, such as retailers and restaurants.

According to Pew Research, as of Q4 2016, 77 percent of Americans had smart phones and 95 percent had cell phones of any kind, which means that the customer experience can and must be shaped by engagement in the digital space.

As people become more habitually connected, they expect greater convenience from their relationship with their technology and expect businesses to leverage connectivity to provide a better experience. Short of Elon Musk wiring our brains into the neural net, bridging the human divide and creating his robot army, brands can make a real and impactful effort to help consumers feel welcome by using digital tools.

Put simply, good experiences drive loyal behavior. Beyond discounts and coupons, savvy consumers unconsciously look for value when shopping around for where to do business.

For example, I fly Southwest often and they recognize this. As a reward, I’m able to board first and pick the seat that I want. Everytime. Second or third row aisle, every time. This is an extremely valuable experience will easily tip the scale toward Southwest when I’m booking travel. There is no cost to this program. This component of the Southwest rewards program has no discount associated ... and just may be perceived as the most valuable program attribute. The impact is highly valuable. I feel like a VIP and it is a reward for my loyalty, which in turn drives me to come back.

Another example of an industry leveraging real time intelligence to create a better, more personalized experience is hotels. With the rise of AirBnB and VRBO, providing a bed and a pillow are no longer enough to keep customers coming back. Service is critical for hotels to maintain the perception of relative value when competing in an ever changing marketplace with so many alternatives in any given city. Treating guest to a light consistent touch like offering mobile check ins,  readable room keys added to mobile app, or augmenting concierge services with on the go attention are just some of the ways that hotels can offer a personalized touch through digital tools. Whether traveling for business or pleasure, the last thing hotel patrons want is to waste precious time navigating hotel bureaucracy. The hoteliers doing it right are using tech to treat weary travelers with an extra level of TLC from the moment they book a trip to the time they leave...and hopefully come back.

Delivering on an intelligent, real time guest experience relies on data-activated, one-to-one marketing that is personalized and familiar. This increasingly popular way of doing things is not only becoming more prevalent, it is practically expected by consumers.  In other words, making each guest feel like a VIP the moment they walk in the door is the key to transforming simple customer transactions into enduring relationships.

Customers will remember their experience with a brand long after they’ve forgotten a discount. Companies cultivate true customer loyalty by making customers’ lives easier and making sure each engagement – whether in-person or in-app – is valuable for them.

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Damon Baker

Damon Baker is a former United States Marine and the current CTO of HYPRLOCO. In the Marine Corps, Baker worked as an Infrared Data Technician from 1984-1988. After being discharged from the Marines, he went on to work in software development for over 20 years. Baker is a self-taught computer programmer and developed the HYPRLOCO platform from the ground up.

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