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Three Words for Customer Loyalty in 2017

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Three Words for Customer Loyalty in 2017
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The 3 Words Process

Each year, Loyalty Truth completes an exercise to select 3 words that we believe will define the course of the Customer Loyalty business over the next 12 months. The 3 Words exercise has been highly valuable to me and creates a framework where I can maintain sharper focus on my long-term goals.

Attribution for the “3 Words” process goes to Chris Brogan. I adopted his planning process over 5 years ago in my personal life, as an alternative to setting new year’s resolutions. Later, I discovered that I could apply the same process to improve my annual business planning. Now, we’ll apply this process to the customer loyalty industry, hoping to bolster your thinking in this new year.

I hope after reading our 3 Words for 2017, you will consider adopting this thought process as part of your own planning toolkit.

Context for Loyalty Marketing in 2017

More than ever, I believe successful execution of customer loyalty strategy requires a tri-fold covenant relationship between the brand (your business), the loyalty provider (the company providing enabling technology and support services), and your customers.

  1. The three parties to this covenant are not weighted equally in importance, and it is undoubtedly the customer’s endorsement of whatever strategy is brought to market that matters most.
  2. While putting the customer first is essential, you should also remember that you have your own financial goals to meet. Balancing the respective financial goals of customer and your brand leads to a financially sustainable approach to building customer loyalty.
  3. In the process, the loyalty provider (or your agency, cloud partner, etc.) must be able to reap a reasonable return for its efforts in supporting execution and operation of the program. If you operate your program through internal resources, then you should calculate the fair return of your invested resources.

Building on the tri-fold covenant concept, I took a different angle on selecting my 3 Words for Loyalty Marketing in 2017. Rather than choosing 3 words as a proxy for industry trends or the future of loyalty,  I searched for individual words that best capsulize the forward-looking needs of each party to the tri-fold covenant: Consumer, Brand, and Solution Provider.

My 3 words for Customer Loyalty in 2017 are:

  • Veracity – for Consumers
  • Material – for Brands
  • Congruence – for Solutions Providers

Veracity – One Word for Consumers
Consumers are tired. Skepticism reigns. “Snapchat Nation” thrives, where people can express an opinion or tell a tale in an instant, only to have its record erased forever. Accountability is low. Fake news threatens the veracity of what we consume online.

Consequently, wherever trusted relationships influence commerce, the Consumer’s need for transparency and sincerity is at an all-time high. The concept of transparency has been on Marketer’s radar for a year or two, but we have reached a tipping point, where operating with transparency and sincerity must be baked into your brand promise rather than considered an optional feature.

Brands can’t hide anymore. Consumers dissect product and service offerings before they step foot in the store or visit a website. Organizations like Patagonia, REI, and Starbucks understand this concept and have thrived as a result. Hammer Nutrition (read this post) intuitively built its brand on transparency, because it is part of their corporate DNA. As Consumers recognize these critical brand attributes, they will migrate towards brands where they discover the comfort that comes from being part of a trusted relationship.

Consumers will view your loyalty strategy through the same lens. While it’s true Consumers want more value from their loyalty programs, they also have an insatiable desire to more easily understand program benefits and experience less friction as they access their rewards. Does your customer “get” what your offer is? How easy is it for your customer to become engaged with your program and take advantage of its benefits? Does the way you operate your program provide clarity, consistency, and encourage trust?

If you want to better understand the power of the word Veracity in terms of consumer loyalty, browse through this list of synonyms and find one that you can connect with to make this concept your own: authentic, credibility, fairness, genuineness, honesty, integrity, sincerity, trustworthiness.

Material – One Word for Brands
More than ever, Consumers are making purchase decisions based on an assessment of packaged value. For example, Amazon Prime members buy more than non-members because they assign a value to a packaged set of benefits that streamline the purchase process. Free shipping, integrated payment, and wish lists make for good execution; and good execution translates to improved consumer trust.

Amazon doesn’t need to give away points, but it does have a loyalty program. Prime is a loyalty program that has more power than most points programs to influence a member’s future purchase decision. Amazon doesn’t need an explicitly stated surprise and delight feature either. It already offers a growing list of membership benefits (free Kindle content, videos and more) that create the icing on the Prime cake.

Hammer Nutrition (see our related article here) packages effective products, great customer service, and free product knowledge to create repeat purchase and long-term customer loyalty across its client base. The lesson to be learned by observing these two retailers, regardless of the divergence in size and recognition, is that packaging is important, but the package must fit the brand.

In sum: your customer loyalty efforts must be a material part of your delivery package. If it is a throw-away offer equivalent to a 1% rebate, you’ve got to find additional attributes to create differentiating magic versus your competitors. These attributes can come in the form of personalized (soft) benefits, tailored communications, or community building to expand your brand influence.

Whatever your individual approach for customer loyalty, your strategy must deliver an offer that is “Material”. This means an offer with real importance, possibly even great consequences, that becomes an essential component of your brand promise delivery. Being material means the offer is integral to your customer experience, and is taken into consideration by a reasonable person in making a future purchase decision.

If you want to better understand the power of the word Material in terms of consumer loyalty, browse through this list of synonyms and find the one that you can connect with to make this concept your own: substantial, real, true, palpable, phenomenal.

Congruence – One Word for Loyalty Providers
For nearly a generation, the most common business model among loyalty marketing providers has emphasized the sale of promotional currency (points or miles) and delivering rewards (merchandise, travel, gift cards, etc.). These are essential services that will continue to have influence in the customer loyalty industry for years to come.

At the same time, loyalty providers are being stretched to provide additional value in the execution of customer loyalty programs. The emergence of “disruptive” providers over the past 5 years confirmed market demand for boutique service offers, and filled gaps from the mainstream, established, loyalty providers.

Connecting member accounts to social media profiles, awarding value (both points and non-points) on interactions, not just purchases, and creating new ways to use rewards currency beyond catalog redemption are all examples of gaps that have been addressed by the so-called disruptors.

Regardless of the industry tenure of a loyalty provider today, or whether you choose to categorize a provider as “legacy” or “disruptor”, one common need should be recognized by the entire provider industry. Loyalty Providers should come into greater Congruence with the brands they serve.

Any service organization providing technology and operational support to brand organizations needs to better align their service offer with the needs of the Brands they serve. Future success is not ensured through execution of an existing model. Anticipating the Brand’s need to selectively reduce friction in program execution, and a commitment to align the respective economic models of Brand and Provider will be the cornerstones of success. Innovative enhancement to a solid foundation, and the ability to create cost-effective products to respond to market trends are key attributes to a sustainable Provider model.

By adopting the concept of Congruence, Loyalty Providers will become more attractive partners as they enter a stronger state of agreement to coincide with the interests of brands themselves. If you want to better understand the power of the word Congruence in terms of consumer loyalty, browse through this list of synonyms and find the one that you can connect with to make this concept your own: accord, agreement, alignment, calibration, compliance, harmony.


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