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In my eyes, loyalty programs exist for two simple reasons: to motivate increased engagement with your brand and to collect data in order to build deep customer understanding. But they also exist for a third reason: customers want them. In a study by Nielsen, 84% of respondents said they were more likely to choose retailers that offered a loyalty program. Forrester Research have found that 64% of consumers agree that loyalty programs influence where they make purchases, and 50% agree that loyalty programs influence what they buy.
Virtually every retailer or restaurant chain has some type of loyalty program these days. In South Africa, there are over 100 local loyalty programs with an estimated 50 million memberships across them. With this said, the challenge lies in building programs that appeal to each individual customer segment that result in increased spending on products and services while boosting loyalty to your brand - a big task in these competitive times. However, what is considered “value” by one customer isn’t necessarily perceived in the same way by the next.
Human psychology is a fascinating thing. As marketers, one of the many roles we play is of psychologist and, at times, of fortune teller. A good understanding of human behaviour and a high EQ are fundamental requirements for us to develop strategies and campaigns that will influence changes in perception and behaviour, and ultimately trigger an action: a click, a download, an email, a “Like,” a “follow” or a “retweet.”