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Driving Intrinsic Loyalty

Building loyalty is a lot like dating: a promise of a nice dinner or tickets to a show can certainly be an enticing invitation; however, it isn’t enough to actually sustain a relationship. A relationship is built over time and based on getting to truly know and appreciate someone. 

Often clients ask me whether a loyalty program or CRM are more important to their organization. I would argue that both play an important role but that many loyalty programs alone fall short of developing a genuine relationship with consumers. 

A loyalty program based on earning, rewards and perks is often effective at getting consumers to register for these benefits. In industries where customer data is not easily available, it serves as a great tool for collecting customer information and transactions. Although programs that drive extrinsic loyalty can often boost short-term revenue and drive acquisition, if your competitor comes up with a more enticing program, the barriers to switching are lowered. 

Many frequency programs, such as grocery store or pharmacy cards, register many users, but are they using the information they capture to generate deeper brand loyalty (e.g., advocacy, collaboration, higher spend, longer tenure, etc.)? The best loyalty programs are those that use loyalty as a vehicle for data capture, then as action beyond just points or discounts. A loyalty program can be a key enabler and an ‘owned channel’ to bolster the customer experience, but it needs to be done within the context of a broader CRM strategy.

Intrinsic loyalty to a brand is much harder to emulate. It goes beyond program loyalty and taps into a consumer’s thoughts, feelings and emotions, reaching beyond just logic and cost/benefit analysis. It takes time and investment to drive this kind of long-term relationship. It is fueled by the CRM principles of knowing your customers and providing value at every touchpoint. And it engages customers by providing timely, relevant interactions which simultaneously build brand affinity and drive incremental revenue.

There are no short-cuts to driving intrinsic loyalty, but the investment in a sustained CRM strategy pays off by increasing customer life-time value. A loyalty program done in tandem with CRM will help ensure a balance between extrinsic and intrinsic motivation for true loyalty to your brand.  

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