What is a brand? The American Marketing Association defines a brand as the “name, term, design, symbol, or any other feature that identifies one seller’s goods or service as distinct from those of other sellers.” A brand is a multifaceted platform that represents a rational and an emotional connection to the various stakeholders and the intended customers. Great brands are easy to recognize. Their objective is clear and they cultivate that coveted customer loyalty all retailers yearn for and use that loyalty to build a brand. But what are brands using loyalty to build a brand?
The most talked about brands and arguably, the most successful brands are the ones that create a special connection with their customer. A typical customer journey starts off with the customer being unaware of the brand. The customer then learns about the brand, gets somewhat familiar with it. Next, the customer grows to like the brand and engages with it. The ideal next step is for the customer to love the brand and be a loyal customer and brand advocate. What we just detailed here are the building blocks for loyalty strategy – the strategy that will carefully architect the customer’s journey. And yes, defining a loyalty strategy is an integral part of creating a brand.
The loyalty strategy should be 100% in sync with the brand and its identity. While a good number of retailers believe that having a loyalty program is good enough, it should be noted that a good loyalty strategy does not start and end with a loyalty program. The program is the tactical implementation of one aspect of the overall strategy. A loyalty program may be one of many – automatic rewards, bankable points, discount program, purchase frequency, etc. While this may be a core component, the experiential component is what truly differentiates a good strategy – surprise and delight, sneak peeks, early access, exclusive experiences and access, etc. As a retailer is thinking through building a brand, it is important to plan the experiences that its top customers will be treated to. It is this thinking that differentiates a company like Nordstrom from its competitors. The customer is treated to a fantastic experience and that’s what keeps them coming back for more.
Adding to that, in today’s social-media rich world, enabling that happy customer to share their experience and amplify their voices can have a significant impact on the brand and its bottom line. Leveraging that, rewarding that and strategizing around that is integral to developing a successful long-term relationship with the intended customer base.
A loyalty strategy is complete only if it is multi-channel and recognizes its customer on each channel. The retailer has the opportunity to learn different aspects of the customer via each channel and use that information to engage with them in the most relevant, experience-rich manner, thereby creating a set of strong brand advocates.
In closing, retailers need to think about a customer loyalty strategy as they define their brand. They need to think ahead, think long term and invest in building strong relationships with engaged and interested customers. And, that coveted pool of loyal customers is theirs.