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How Leading Organisations Build Loyalty Online – Insights and tips from Australian Marketing Leaders

In May, Blackhawk Network was a proud sponsor of Seamless Australia 2022 – Australia’s largest virtual gathering of Payments, Ecommerce and Fintech leaders. At the event, Blackhawk hosted a virtual roundtable, ‘Building Loyalty Online’, featuring some of Australia’s leading Online Marketing Leaders, who discussed how brands today can navigate an ever-changing consumer landscape, and the importance of building lifetime loyalty in a dynamic digital environment.

The roundtable was chaired by Yvette Costi (CMO at Blooms The Chemist), and featured Darren Gunton (GM Marketing – Total Tools), Christian McKelvie (Head of Marketplace – and Blackhawk Network’s own Will Feutrill.

This fascinating session uncovered strategies and tactics that are driving some of Australia’s leading retailers and e-retailers to build sustainable, lifetime loyalty amongst their customer bases.  Here are some of our key takeaways and insights:

How the Panel Defines Loyalty

Loyalty can be approached in 2 ways:

1) Loyalty programs; and 2) Organic Loyalty, driven through a real emotional connection with customers.

Loyalty programs are relatively straightforward; you have tools that you try and leverage your customer through; rewards to incentivise your customers to buy/visit more, or buy more valuable things, so as to maximise customer lifetime value.

From the organic view of loyalty, it’s important to build an emotional connection between your brand and the consumer; creating those connections (or stickiness) to keep consumers choosing you, for reasons that aren’t purely rational.

The Challenges to building loyalty online

  • The initial challenge is cutting through all the noise to get in front of your customers to present your proposition. And after that job is done, finding the right triggers that drive customers to return again and again, so often that it becomes habitual. The challenge for brands is thus – what are those triggers for your audience, and how do you create the habit?
  • Another challenge is delivering an optimal customer experience and making this a true priority in the enterprise (rather than just a throwaway line); not just online, but across the entire customer journey – from pre, through to post purchase (after sales service). For example, throughout COVID, people were factoring delivery into the costing process of their purchase behaviours – the expectation was they wanted instantaneous gratification; how could businesses satisfy the urge for immediacy?
  • Consumers now don’t see customer experience across the prism of individual industries or purchase categories; rather, consumers want an optimised, seamless experience across all industries and purchase behaviours. At Blackhawk, our partners span a wide array of industries. Being part of a global network and working with some of the world’s leading brands, allows us to understand customer trends from right around the globe, and take these insights to help shape our local customer’s offers.

How to keep customers loyal (outside of discounting) in a price competitive environment?

  • It’s important to emotionally connect to customers. Homogeneous retailers sell the same brands as their competitors. We need to understand what is important to our customers – after you take out price, your distribution, speed of delivery, etc, where can you create the hooks that keep consumers coming back – those emotional hooks and symbols that elevate you above your competitors.
  • Loyalty is built off the bedrock of a consistent brand experience, so that consumers “know” what they are going to receive. These are the minimum thresholds expected to be reached each time to have a positive brand engagement. Every time you go above and beyond that, you grow your consumer’s attachment to your brand.
  • Loyalty programs can become powerful tools for businesses, and strong operating entities in their own right; you just have to look at the success of airlines like Qantas and Cathay Pacific. However, for other businesses, loyalty programs are often launched because you think you need one; they are often hygiene factors and tickets to entry in your competitive field. And as they are often seen as an expense, very little is invested in them to make them truly something that keeps your customers loyal; they are often seen as channels to sell discounted products to drive volume. They can easily become a one size fits all approach, and don’t make the customer feel special; rather just another transaction channel.
  • At Blackhawk Network we make a point to work closely with our partners, to help better understand the rewards that best motivate their customers to remain loyal as individuals, and not just a broad-brush approach. The incentives must be relevant and acknowledge the lifetime value of the customer; the last thing any business wants is to reward a highly transient customer versus someone who has been with the business long term and is loyal.

The role of data, and the expectations in exchange of information made by Customers

  • You must be respectful of any data you collect and ensure its being used in the right way. The “bargain” you make with customers when you are guardian of their information is that you will use these insights to create a better proposition for them, ultimately creating value through an optimised experience.
  • Data collection is a double-edged sword – you need it, but you also need to be transparent about the why and how you are collecting the information, building a reciprocal relationship with your customers. When discussing data collection and usage with customers, Brands are focussing on the importance of transparency, and how it can complete the cycle and optimise the customer experience.

What rewards work across service and product-based businesses

At Blackhawk Network, we like to start with the fundamentals; that is, understand about your customers wants and needs, how they interact with your brand, and how we can add value to the relationship. We then create incentive platforms and deliver content in the form of gift cards, giving customers the choice of rewards and incentives that best suits them, and are aligned to the brand. We know that not everyone wants the same thing, and therefore we can create a program that has the flexibility to satisfy a wide array of customer needs. 

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