Beyond Points: Embracing Loyalty as a Meaningful Outcome

Jun 13, 2024

It’s a tale as old as humans themselves. People want to feel they belong, they are appreciated, and you are listening to them. It’s easy for marketers and business leaders to lose sight of a customer’s basic desire to feel a connection to the brands they engage with when there’s pressure to meet shareholder expectations, deliver on KPIs, and stand out from the competition.

Brands that incorporate a loyalty program are a step ahead in delivering on the basic needs of their customers, but how you deliver can differ significantly and with varying degrees of effectiveness. Do you offer points and rewards to show appreciation? Check. Do you offer exclusive access or tiers to give customers a sense of belonging? Check. But do those elements truly make customers feel they are connected to your brand or that you are listening? To deliver on those core elements, you need to go deeper and find ways to integrate key drivers of emotional loyalty—building trust by listening to your customers and incorporating feedback and personalization to validate they were heard; showing appreciation with relevant and tangible value for choosing to do business with your brand or recognizing them for non-transactional participation; and demonstrating empathy by removing friction in the customer journey.

Reaching a state of emotional loyalty with customers takes time. Meaningful connections typically don’t happen overnight. To successfully nurture relationships, brands should think about loyalty holistically with customers at the center of all planning efforts. This is key to turning your most engaged customers into advocates who will influence others. We see loyalty as the sum of all interactions—not just points or a program, but the outcome of a deep, abiding connection with your customers.

When brands focus on loyalty as an outcome, they are more apt to connect with customers in ways that result in the customers wanting to spend money to reflect their values and identity and advocate for the company because of positive customer service, the quality of products, or the value they feel from participating in the loyalty program.

Learning from successful loyalty efforts

While this may seem counterintuitive, there are a myriad of programs that demonstrate the experience-over-points phenomenon in action, and brands would be wise to take note. Often, it comes down to three key experiential needs.

1. Deliver simplicity and convenience.

Crocs is a cult brand consumers love. Members of the Crocs Club receive 15% off their first purchase, exclusive offers, early access, free shipping, and more. Crocs also provides 25% off to students, teachers, military, and healthcare providers when they verify their status. The brand uses little charms that connect to Crocs, called JibbitzTM, to extend personalization and engagement opportunities to its customers, including a Jibbitz personality quiz to collect zero-party data and make future recommendations.

2. Make the experience personal.

Sephora’s commitment to personalization, tiered benefits, and exclusive experiences ensures Beauty Insider members feel valued and connected to the brand. There are three tiers that offer increasing benefits based on spend and points earned, with top-tier members receiving personalized services such as beauty classes or makeovers, free shipping, and private sales. Sephora’s Rewards Bazaar provides members more flexibility and choice when it comes to redeeming points, including virtual meet and greets with brand founders and a $200 Sephora shopping spree.

Sephora supports the customer’s in-store experience between visits with a robust website and app that analyzes customer browsing, buying, and zero-party data provided seamlessly by members through quizzes. This enables Sephora to send relevant, appealing, and personalized product recommendations to its Beauty Insider members. Finally, the Beauty Insider community is a place for members to participate with the brand—ask questions, join challenges, and get recommendations from one another by joining community groups that align with their interests.

3. Evolve the experience to grow and connect with brand advocates.

With its persistent stance on condemning Big Oil, defending the wilderness, and encouraging people to vote with the planet in mind, Patagonia wears its environmental values on its sleeve. In turn, its loyal customers do too. Since the 1980s, Patagonia has given 1% of its sales revenue to environmental causes and encouraged other business owners to consider becoming members of “1% for the Planet,” a socially and environmentally progressive group. Patagonia does not have a traditional points-based loyalty “program,” but it has a strong CRM strategy that includes omni-channel interactions (email, SMS, app, digital site, social) and has created an engaging narrative through “The Stories We Wear.” Patagonia’s commitment to authentic activism has proven loyalty as an outcome occurs when a brand has strong shared values with its customers.

Experience matters more than ever

Expectations have changed—customers want a brand to be flexible in its offerings, providing seamless ways to interact digitally and in-person, with experiences that go beyond points. And those who have positive experiences with your brand want to buy more of your products or services and actively participate with you through your loyalty program. This leads to an increase in your ROI.

Becoming more customer-centric: Advice for brands

Brands like Crocs, Sephora, and Patagonia are successfully executing a customer-first strategy across their organizations. This is no easy feat. It involves transforming every aspect and functional role of your company to consider how every decision, big and small, will affect the customer.

Here are five best practices to help brands become more customer-centric:

1. Be data-informed and customer-led.

Don’t guess which experiences might make your customers actively participate in your program—ask them. Find small, bite-sized ways to gather zero-party data directly from your customers and be ready to do something to improve their experience with the data they provide.

2. Focus on what your customers want and need.

Design your products, services, loyalty program, CRM strategy, operations—everything—around your customer’s wants and needs. Build a long-lasting relationship. This isn’t a one-and-done; it’s a continuous evolution.

3. Benchmark KPIs and adjust appropriately.

Use key metrics such as Net Promoter Score, Customer Lifetime Value, and Churn Rate to determine if the changes you make as an organization have an impact. Learn more about measuring the impact and value of your customers’ ability to identify and advocate for your brand with a participation-based approach to loyalty and by implementing measurable strategies for yourself.

4. Be realistic about timing and expectations.

Create a roadmap with key objectives, ideas, and milestones to help you hit your goals and keep activities on task, without the frustration that comes from overly ambitious deadlines.

5. Keep customer experience at your core

Successful customer-first companies have a culture inherently designed to support a positive customer experience. And they’re typically quick to make it right when something goes wrong.

Loyalty programs are often built on a foundation of points—or stars, miles, or cash back—that encourage desired behaviors and build brand engagement. But that’s no longer enough. Achieving long-term success comes from forging human connections and making emotional investments. These days, points just aren’t the point. Today’s customer journey requires more than a transactional exchange between the brand and the customer. It requires intentionality, always-on relevance, utility, and personalization to drive participation at every touchpoint, in-person and digitally.

Want to dig deeper?

Experiences that foster trust, appreciation, and empathy inspire meaningful, long-term engagement with customers and increase participation with your brand. This is how brands cultivate and maintain emotional connections and true loyalty. Our industry-leading Humanizing Loyalty report uncovers these connections, outlines key drivers that create emotional loyalty, and shares how brands can establish a shared identity at scale with their customers.