Skip to content
Home » Blog » The 5 Principles of Building Customer Loyalty

The 5 Principles of Building Customer Loyalty

In this ongoing collection, we’ll be “unboxing” must-have digital advertising and marketing campaigns and packages very important to success. In this installment, we’ll take a look at loyalty and rewards.

Are you taking your model’s greatest clients as a right?

As entrepreneurs, it’s too straightforward to focus our sources on acquiring new customers or reducing churn.

Because it additionally means your loyal followers—those who select to spend their hard-earned cash together with your model again and again—might not be getting the unique expertise they deserve.

That’s why we’re going to deal with loyalty and rewards for this subsequent version of Unboxing Must-Have Marketing Campaigns.

Download the entire information to grasp why a profitable loyalty or rewards program is greater than an unique low cost, and 3 ways to gamify buyer rewards with cross-channel messaging.

As an introduction, let’s focus on the 5 ideas you want to create a model neighborhood and enhance buyer loyalty.

The Five Principles You Need to Create a Brand Community

When writer Charles Vogl revealed how he efficiently hosted a weekly ceremonial dinner for 5 years in The Art of Community, it stunned him at what number of leaders approached him afterward to assist them do the identical.

Yet, his definition of what a neighborhood entails didn’t align with a for-profit group’s must make cash and fulfill shareholders.

So alongside author Carrie Melissa Jones, the 2 of them created the model neighborhood idea, which “aspires to serve both its members and at least one organizational (brand) goal.”

Jones and Vogl go on to additional outline the model neighborhood by stating the next:

“Real communities are made up of relationships…although they may include transactionals, they are never purely transactional. They include generosity, at least the kind where we help others without calculating the return on investment (ROI) for sending a card, answering a timely question, or holding a door open for a stranger coming in from the cold…community relationships transcend transaction.” 

While the generosity examples listed above may fit for a brick-and-mortar enterprise, doing the identical on-line begins to get sophisticated.

Luckily, a chosen loyalty and rewards marketing campaign can talk the identical intentions of generosity, offered that they comply with some of the Principles of Belonging that Vogl outlines his first book.

There are technically seven ideas, however we at Iterable discover that solely 5 of them translate over to a advertising and marketing marketing campaign.

They are:

  1. The Boundary Principle
  2. The Initiation Principle
  3. The Rituals Principle
  4. The Temple Principle
  5. The Inner Rings Principle

Let’s break them down, one after the other.

1. The Boundary Principle

The first half of constructing any neighborhood is to create a boundary. To do that, a model should decide a set of standards on who’s eligible to affix your loyalty or rewards program and who isn’t.

For your B2C model, that standards might be a first-time buy.

Or it may be an software course of, like within the email instance beneath from PayPal debit Mastercard.

PayPal Mastercard email

Online cost processor PayPal invitations their enterprise clients to obtain 1% cashback in the event that they apply for its debit Mastercard.

In this situation, PayPal sends this email to enterprise house owners all for 1% cashback on eligible purchases. The boundary used is the web type that requests particular info, like a birthdate and a social safety quantity.

It’s unlikely that each buyer you work together with goes to affix your loyalty or rewards program. Therefore, it’s useful to find out who your ideally suited buyer phase is for a loyalty or rewards program, create a boundary like an software or a first-time buy, and invite chosen people to affix accordingly.

2. The Initiation Principle

Once a buyer joins your loyalty or rewards program, now comes the initiation. The buyer has efficiently crossed over the boundary and is now formally a member of the model neighborhood.

While an initiation will be so simple as a loyalty-specific welcome or onboarding email marketing campaign, writer Charles Vogl states that the most impactful initiations include a ritual that comes with symbols and tokens.

For occasion, let’s study how Seattle-based PCC Community Markets initiates new members to their meals co-op.

It’s vital to notice that PCC Community Markets is open to the general public. However, PCC states of their mission that they exist to serve the members of the local community. If a frequent shopper chooses to cross the boundary and pay a one-time $60 charge, they begin to accrue an annual dividend.

Once a brand new member joins, the beneath email instance is distributed with directions on monitoring their earnings.

PCC loyalty email

Local grocery retailer PCC Community Markets sends a welcome email to new members of their co-op.

While a cellphone quantity can be utilized to trace purchases made in-store or through Instacart, PCC additionally makes some extent to mail new members a bodily membership card.

PCC loyalty card

Local grocery retailer PCC Community Markets mails a bodily membership to new co-op members.

Not solely is it cheap for the model to ship a bodily card, nevertheless it additionally serves as a token of initiation to the loyal buyer who has crossed over the boundary to affix the neighborhood.

3. The Rituals Principle

After initiation has taken place, now comes the half the place manufacturers excel: creating and celebrating at the least one ritual, in any other case referred to as “a practice that marks a specific time or event as special or important.”

An instance of a ritual for your loved ones will be consuming turkey on Thanksgiving or serving cake on a birthday. But to your model, a ritual might be a buyer milestone or a recurrently occurring occasion, like a yearly sale.

For occasion, outside retailer REI hosts its anniversary sale each spring. The public is free to buy there, however REI co-op members get a primary take a look at the merchandise and obtain unique coupons.

REI loyalty email

Outdoor retailer REI emails its co-op members a sneak peek on the upcoming Anniversary Sale, accompanied with unique coupons.

Inviting co-op members to view the anniversary sale merchandise earlier than the general public accomplishes the 2 following issues: 

  1. Alerts new members that this sale is an occasion or ritual to sit up for yearly
  2. Rewards present members for his or her continued loyalty and patronage

4. The Temple Principle

Every neighborhood should have a gathering place of types, in any other case referred to as a temple. Temples are vital to communities as a result of it’s the place like-minded members can discuss to one another and share their values.

For e-commerce-only manufacturers, this gathering place might be a web-based discussion board or chat room. For retailers with a bodily storefront, they will encourage their clients to go to a close-by location to view new stock or attend an unique occasion.

But let’s say your model is a restaurant, just like the email despatched beneath from fast-casual chain Bahama Breeze.

Bahama Breeze island favorites email

Bahama Breeze coupon

Fast-casual eating chain Bahama Breeze emails an unique coupon to its Island Insiders to make use of in direction of their subsequent dine-in go to.

Typically, Bahama Breeze gives an Island Insiders loyalty program for brand new clients, in trade for a coupon on their subsequent dine-in go to. However, with the restrictions positioned on eating places and different brick-and-mortar companies in the course of the COVID-19 outbreak, manufacturers must evolve and adapt.

It could appear unattainable to encourage clients to collect at a bodily location whereas additionally complying with authorities social distancing pointers. But one option to fulfill the temple precept could be to supply additional perks and rewards to loyalty program members who choose up merchandise through curbside as a substitute of using a supply service.

5. The Inner Rings Principle

Last however not least, a thriving model neighborhood must have an internal ring, that are the tiers or ranges in a loyalty or rewards program. Without an internal ring, members received’t know find out how to progress their relationship with the neighborhood, or get rewarded for his or her standing.

In the case of sweet retailer Sugarfina, they outline a set of factors between 0-500 {that a} rewards member can obtain throughout the yr.

Sugarfina rewards email

Candy retailer Sugarfina makes use of email to inform a rewards member of their present factors standing up to now this yr.

As a rewards member collects extra factors, the sort of rewards they obtain adjustments. For occasion, Sugarfina states above {that a} buyer wants at the least 100 factors or extra to start out receiving invites to unique occasions.

According to Charles Vogl, having an inner ring as part of your brand community is crucial as a result of:

“We all aspire to belong to prestigious inner rings, perhaps not just for authority and respect but for new ways to participate and contribute.”

To Sum It All Up

Setting up a loyalty or rewards program to your greatest clients is a no brainer for any marketer.

However, it’s extra than simply monitoring what they spend or giving an unique low cost—it’s making a model neighborhood.

We at Iterable advocate utilizing some or all of Charles Vogl’s Principles of Belonging when creating your loyalty program and advertising and marketing campaigns.

The ideas are:

  1. The Boundary Principle
  2. The Initiation Principle
  3. The Rituals Principle
  4. The Temple Principle
  5. The Inner Rings Principle

And in case your model has a cellular app or desires to experiment with different cross-channel mediums, obtain our full information to learn to make the most of textual content messaging (SMS), in-app messaging and cellular push notifications.

Now that you’ve got the talents and information to create an enticing loyalty and rewards marketing campaign, what are you going to do to verify your greatest clients aren’t taken as a right?

Get the Guide: Unboxing Loyalty and Rewards Campaigns

Leave a Reply

Your email address will not be published. Required fields are marked *