Beyond the discount: 6 ways to evolve customer loyalty

Now is an excellent time for brands to rethink how they invoke and nurture customer loyalty and even use it as a one-time way to entice new customers. For too many brands, loyalty programs are synonymous with discount offers. Offer shoppers a way to earn points that may be applied to future purchases, and in return, you'll earn their loyalty. It's an easy incentive to offer but, is it the best route to go in 2023?

There are myriad ways to earn a consumer's long-term loyalty, many of which do a better job at cementing loyalty. All over the world brands are launching highly effective loyalty programs that offer no discounts whatsoever; rather, their loyalty programs remind members why they love the brand to begin with.

Here are six ways brands can optimize their current loyalty initiatives:

Romance the product, not the promo code

Most mid-market websites offer some kind of promo code whenever new visitors arrive on their home pages, but smarter brands are moving away from that tactic. When visitors land on your site from a search, it's safe to assume they're in discovery mode. The best way to keep them engaged is to romance them with your product pages, not ask for an immediate sale via a pop-up upon arrival on your site. They don't know your brand at this point, which means they have no idea if they want to purchase from you. And if they do opt to purchase, looking for that promo code once they're in the checkout process can be a distraction, and distractions in general aren't good.

That's not to say that discounts can't be deployed for customer acquisition purposes, as they may help the shopper who is comparing prices between sites. But discounts aren't helpful in creating longer-term retention, which is the goal of all loyalty programs. It can take some experimenting to balance the short-term goal of new sales and your long-term strategy of retention and profitability.

If you're going to offer a promo code, make it part of another initiative, such as an influencer program so that you can track its performance.

Let shoppers decide the perks they want

One size doesn't fit all. Consumers have different budgets, different habits and different needs at various stages of their lives. When you design your loyalty program around a single benefit — a price discount — you'll lose shoppers who aren't motivated by price alone.

Some shoppers are motivated by free shipping or members-only access to new products or sales. Others want to earn points that they can apply to a more premium-priced product that is otherwise out-of-reach.

And some just like to be innovators. Nike is launching a loyalty NFT as part of its dotSwoosh platform. Starbucks also announced an NFT component to its loyalty program that will include gated access to exclusive programs. Why not have your early adopters come along with you on the NFT ride? Learn together!

Luxury clothier Net-a-Porter is offering a new service bound to make customers loyal: bespoke alterations and repairs of items post purchase. To do so, the brand has partnered with a UK startup called Seam to provide "aftercare."

In some instances, consumers will pay to join a rewards program, as long as they can see meaningful benefits, which is what Walmart+ has done. For $12.95 a month, or $98 a year, members can enjoy free home deliveries, free Paramount+ streaming and a host of other awards.

Now is a good time to look at how other brands across all sectors are approaching loyalty for inspiration. Their best tactics can be your starting point to building a loyalty program that is truly innovative. Balance that with a survey of your own customers to see what their priorities are.

Don't underestimate the value of product feedback

B2C brands can take a cue from enterprise software companies that invite their top customers to preview -- and weigh in on -- the product roadmap. It's a smart strategy: companies aren't likely to pull the plug when a feature or functionality that was specifically designed with their own needs in mind.

This is a tactic that works equally well on the consumer side, as Radio Flyer demonstrates. Customers often send Radio Flyer photos of how their little red wagons are used in real life, including Starlight Foundation, which distributes the wagons to hospitals. Upon seeing photos of wagons with rigged IV poles attached, CEO Robert Pasin thought they could improve on that. He told a Forbes reporter, "We got Starlight involved, and we created this gray wagon called the Hero Wagon that has hospital-specific features. It's just been one of these projects that checks every one of our culture boxes; it's been amazing."

Soliciting and deploying customer feedback in your product design is a great way to engender loyalty, and to create customers who will evangelize your brand on social media. More than that, it's just one of the ways that loyalty can manifest beyond perks and tap directly into empathy.

Reconnect with your brand's humanity

This past summer, the pet brand, Chewy achieved legend status with a simple gesture. A customer called in to ask if she could return dog food after her beloved pup passed away. Not only did Chewy refund her money, the customer care rep told her to donate the food to a shelter, then took it upon herself to send flowers, along with a personal card. The story went viral.

This story touched the hearts of so many people because it demonstrated that Chewy cares about pets more than individual sales. Entrepreneurs start businesses because they have a passion, or experience an unmet need and see an urgent need to fill it. They dedicate years building their businesses, often making compromises along the way. Stories like Chewy remind us of those good intentions and engender loyalty.

Lead with your values

By Humankind is leaning into its sustainability values by enabling its customers to offset their plastic footprint of their daily grooming routine. Those offsets are turning consumers into loyal shoppers because they sign up for subscription services.

Leading with your brand's values is an excellent way to promote loyalty, as research shows that when it comes to making purchasing decisions consumers, particularly Millennials and GenZ, shop their values. It's a great way to achieve real brand relevance and loyalty, transcending promos and campaigns. What's more, consumers are willing to evangelize for the brand, which has the added benefit of lowering ongoing customer acquisition costs.

Offer concierge services

Finally, consider offering a concierge service. If your brand is premium, a high touch one-on-one engagement with a concierge will go a long way in helping your customers get the attention they want when in-market for big ticket purchases.

Some companies invite shoppers to work with a styling consultant who "visits" their homes via a video app in order to recommend colors, styles and products that actually match the consumer's home. Ralph Lauren also invites online shoppers to make an appointment with a representative who connects directly with the customer in order to provide highly curated experiences.

Expect to see more of this white-glove service in the future. This past September, digital commerce platform Humankind raised $4.2 million to connect product experts to consumers via SMS. I'm sure more will follow suit.

In a world where finding the lowest possible price for an item is just a Google search away, brands need to think beyond the discount and promo codes for the first sale. Loyalty speaks to your brand's core values -- offering a bespoke product to meet a consumer's unique needs at a given point in time.

About the Author

As the VP, Customer Experience at Rightpoint, Tom Quish is responsible for defining and driving our CX Offerings go-to-market and thought leadership, as well as supporting our clients directly with their CX ambitions. Over his 20-plus years in the industry, he has balanced his time between Brand and Experience Design for a variety of clients across OEM, CPG, Retail and Professional Services industries. Tom also co-teaches the EDI course Human Centered Interaction Design and has led a variety of workshops and electives within the MMM program.