Today’s marketers are increasingly seeing customer experience (CX) fall under their umbrella of duties. So much so that Harvard Business Review claims that customer experience “has become the new marketing ... [because] it influences brand perceptions and impacts business performance just as strongly as tradition- al marketing.”
Harvard Business Review got it right. CX programs are a new marketing approach that matches its predecessors — and its impact will only grow.
However, many still confuse CX efforts with traditional strategies like loyalty marketing programs. But there’s a fine line between the two — and marketers should be warned that this is a place where “similar” definitely does not mean “equal.” So what are the differences between loyalty marketing programs and CX programs, and why can a CX mindset empower your loyalty program?
What's the Difference Between Loyalty Marketing Programs and CX Programs?
Loyalty marketing programs refer to company-wide initiatives that focus on growing and retaining existing customers by selling them more. CX programs help businesses understand the customer/brand relationship and what makes the customer loyal to the brand in the first place.
The key difference between the two is in their approach: loyalty marketing is selling — often through incentives — while customer experience focuses on the ongoing conversation with the customer to then drive a deeper sense of loyalty.
This is where a traditional approach to loyalty programs goes wrong: At the end of the day, your customers don’t want to be bought with coupons, infrequent freebies and discounts. While customer appreciate them, those benefits do not make them more loyal to your brand. Customers want to feel valued and heard. If you look through the lens of customer experience, you can reset your loyalty marketing programs to take a more holistic, relationship-centric approach that will truly impress your customers.
Related Article: Where Does Customer Experience End and Digital Marketing Begin?
A CX Mindset Aims for a Consistent Experience
According to Forbes, the Advertising Research Foundation found in a 2019 survey report that U.S. consumers are less likely to share their personal data (e.g. home address and email) with companies compared to a study conducted a year before. This should come as no surprise with the yearly increases in data breaches as well as the recent LinkedIn data leak that exposed 700 million users.
When you’re trying to expand your memberships, this can be a massive problem. Loyalty programs almost always require customers to enroll by sharing some form of personal data. So how can a CX mindset help you solve this possible customer objection? One word: consistency.
Customers need to know they can trust your brand from the get-go. If they’re receiving mixed messages in policy, employee interaction or overall experience, they aren’t going to know what to expect and will be less likely to trust you with their information. But if you approach this problem with a CX mindset, you know that you need to dedicate resources to unearth areas of brand inconsistency so you can streamline, hire, and train appropriately and put the best foot forward before asking for customer data.
When customers have a great impression of who you are as a brand, their positive and consistent experiences will inspire the trust they need to join your loyalty program.
Related Article: Manage Experience Consistency ... or Chase Your Customers Away
A CX Mindset Provides the Right Perks
Though perks alone won’t drive true brand loyalty, they are incredibly necessary to provide what customers expect when they sign up. However, your efforts can be all for nought if you aren’t providing the right incentives.
Customers Are Less Likely to Share Without the Right Incentives
According to our CX Trends report, customers are less likely to share their info when a program simply offers to make interactions easier, more efficient, or to deliver personalized recommendations. The problem with the benefits just mentioned is that they don’t guarantee a quality exchange between the consumer and business. Having ease, efficiency or personalization doesn’t necessarily give the customer added value to their purchases.
Customers Want VIP Treatment
What consumers do value is receiving exclusive access to sales, events or products. Essentially, today’s customers are more willing to share their data if they’re given VIP treatment. In fact, Microsoft's "The Consumer Data Value Exchange" found 99.6% of those surveyed would give information if there is a cash reward, 89.3% would if a discount is involved, and 65.2% would for loyalty points towards services and products. To truly drive brand loyalty, you need to invest in customers, even if it means giving substantial prizes. After all, how else will you incentivize?
Find Out What Really Drives Participation for Your Brand
No industry is the same, and your company might need a specific set of incentives that differs from other brands. The listening capabilities of a CX platform can help narrow down what perks will drive participation in your loyalty programs. By listening to the voice of customer (VoC), your business can elevate data collection and analytics to find out what customers are saying about membership benefits.
A CX Mindset Focuses on Relationships, Not Memberships
Customer satisfaction is a short-term win. After all, if a customer was able to purchase the product or service they were looking for, they might be more willing to become a loyalty program member. But why stop there? When you provide excellent brand interactions over and over again, you have a customer that will come back, buy more, and recommend you to others. That’s the kind of customer you create when you focus on relationships and loyalty over merely satisfaction.
The key to going beyond “good” and creating excellent experiences is emotion. When InMoment studied unstructured customer data, we found that when discussing memorable experiences, most customers concentrated on the interactions they had with brand representatives and, even more importantly, the emotions they evoked. Sixty-eight percent of respondents to a 2021 customer service trends survey believed the key to great customer service is a polite customer service representative. Ultimately, 20% off coupons don't inspire emotional experiences. Meaningful human interactions keep customers around in the long run.
Keep Your Eye on the Bigger Picture
Though loyalty marketing programs and CX programs both have similar goals, it’s vital that marketers recognize customer experience goes beyond the membership/incentive mindset.
By being a consistent and reliable brand you can inspire trust and loyalty within your customers. Through listening to what customers really want their needs become clear. And, when you approach customers as a human being rather than an additional number to your memberships, it’s more likely that customers will want to stay for the long run. When you focus on customer experience, you can enrich all areas of your business, including your loyalty program.