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Behind the lure and labour of loyalty
programmes
By Manish Dureja, Managing Director at JetPrivilege
prefer surprise deals or gifts to
Time and again, loyalty programmes have information on sales, special privileges,
proven to bring grist to the mill, serving as time-saving opportunities, or other
one of the most effective ways of traditional programme benefits.
engaging with and retaining customers.
That is just the beginning. Several more Successful loyalty programmes act like
aspects account for the customer’s motivational currencies that go-beyond
propensity towards it, making it a the conventional route, through tangible
compelling strategy for long-term growth. and intangible rewards, to reach customer
delight. Such engagements are
Why customers love it: indispensable for enduring relationships.
Complimentary excess baggage, award
Value perception flights, waiver on seat select charges and
cabin upgrades for flight passengers go a
Customers remain active within a loyalty long way in making them feel special.
programme because they see an increased
perceived value in their activities that Belongingness
have translated into a ‘wow’
factor. According to persuasion expert Loyalty programme customers share a
Robert Cialdini, this positive experience sense of pride in belonging. They feel
triggers a desire to return the favour, they are part of an exclusive and
steeped in the power of reciprocity. A privileged cohort, and that is an
report from Smart Insights says, “If a opportunity for marketers to seize.
customer receives positive treatment like Exclusive privileges like VIP access to
in a loyalty programme – they will be airport lounges and priority boarding,
more likely to return the favour in the allow flight passengers to enjoy the
form of more visits, purchases or special distinction that their loyalty
referrals”. In a recent KPMG survey, 74% programme offers them.
of customers said they would go out of
their way to shop at a store where they Why businesses design it:
earn loyalty points, and 60% of the
customers said they would shop at a store A proven growth driver
with slightly higher prices in order to earn
a loyalty award. Quite for the same Many marketers use loyalty programmes
reason, in the travel loyalty space, the as the go-to-strategy for new customer
basket of benefits offered to members on acquisition, business growth and
their flight bookings is often extended to expansion. Members of customer loyalty
stay and dine experiences as a value-add. programmes generate between 12% and
18% more revenue for retailers than do
Being valued customers who are not members of loyalty
programmes.
In the same KPMG survey, more than
80% of the loyalty customers said they The silver bullet for customer retention
