Going beyond points for the ultimate loyalty program

Going beyond points for the ultimate loyalty program
When we ask customers about the brands they’re most loyal to, there’s often an interesting disconnect between the reasons customers love their favorite brands and the rewards they offer. Certainly, we hear about points or other earning mechanisms and how they can be used to deliver value, but we find that features of the brand’s experience are what truly drive deep, resilient loyalty.

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. Starbucks Rewards is a masterclass in three key experiential needs:

  1. It makes the experience personal.
  2. It delivers simplicity and convenience.
  3. It is constantly evolving the experience to grow with its brand fans.

The Starbucks app is user-friendly and creates a sense of ease, reliability, and connection between the customer and the brand. For instance, if customers are running late, they don’t want to stand in line for their morning pick-me-up, interact with multiple people, and slow down their schedule, so the Starbucks Rewards app allows members to preorder and pay for their drink with a few taps of a finger. All they need to do is run in, grab their latte, and dash out.

Make no mistake: Starbucks also relies on traditional loyalty tactics like points (or stars, in this case), promotions, and rewards to drive incrementality, and new product and channel activation. But the core of its customer loyalty is deeply rooted in the experience—and using data to personalize and elevate it. However, the challenges in the labor force and global supply chains have greatly impacted Starbucks’ ability to consistently deliver on this experience daily. For regular Starbucks app users, it’s been frustrating to not be able to use the mobile order-ahead option that we’d grown accustomed to. The Starbucks app was built to be user-friendly and create a sense of reliability and connection between the customer and the brand. When brands are not able to deliver on the experiences their customers have come to expect, they can lose trust and reliability—two of the key drivers of emotional loyalty.

Travel is another industry severely impacted by the pandemic. In these circumstances, a standout loyalty program needs to go beyond earning points or miles to keep members engaged and future-proof the brand. For example, Delta’s SkyMiles provides members with an experience that sets Delta apart from other airlines by providing benefits like free checked bags or seat upgrades, depending on the member’s tier status. The SkyMiles program and mobile app help make a potentially stressful experience easier by simply offering hospitality and understanding.

One of the ways Delta does this is by sending smartly timed push notifications with flight delay information and luggage tracking status. Even with the recent difficulties of flying, with thousands of cancelled flights every week, Delta is sticking to transparency and staying proactive by issuing flight credits and waiving rebooking fees to make things a little easier. These simple courtesies are easy gestures that go a long way toward making customers feel cared for and appreciated.

In retail, REI is a great example of a brand with a straightforward loyalty program that doesn’t involve points. REI’s Co-Op has a one-time $20 fee, but the membership more than pays for itself. REI rewards its members with a standard 10% discount in the form of an annual dividend to be used toward a subsequent purchase, along with free shipping on orders over $50.

The relationship between REI and its members goes beyond transactional. REI understands its customers and demonstrates this through campaigns and content that align with their values and ideals. In doing so, REI has created a community with a real sense of belonging. The #OptOutside campaign to encourage time outdoors instead of shopping on Black Friday is a perfect example—it’s an emotional connection that rings true to its brand promise, draws customer loyalty, and helps sustain its active member base.

That connection has recently been extended to help get three million people outside: REI now offers 124 multiday guided outdoor adventures as well as guided day tours and recreational rentals around the country. With plans to add more activities, especially for weekend trips and adventures catered to women, families, and adults under 35, REI has created a unique way to support its customers through shared values and increased engagement.

Experience matters more than ever

A customer’s experience with a brand matters even more than it did before the pandemic. Expectations have changed—customers want a brand to be flexible in its offerings, providing seamless ways to interact both 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 Starbucks, Delta, and REI successfully execute a customer-first strategy business-wide. That’s no easy feat. It involves transforming every aspect and functional role of your company to consider how every decision—big and small—will impact 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 that improves their experience with the data they provide.

2. Focus on what your customers want and need.

Then, design your products, services, loyalty program, CRM strategy, operations—everything—around making it happen. The goal is to 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. Start at the top, but don’t stop there.

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

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

Loyalty programs have long been built on a foundation of points—or stars, miles, or dividends—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 an exchange or transaction between the brand and the customer. It requires intentionality, always-on relevance, utility, and personalization to drive participation at every touchpoint, both in person and digitally.

ICF’s global marketing services agency focuses on helping your organization find opportunity in disruption.
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Meet the authors
  1. Katie Berndt, Strategy Director, Loyalty and CRM

    Katie is an expert in improving end-to-end customer journeys with more than 15 years of experience. View bio

  2. Connie Sisco, Senior Strategist, Customer Loyalty

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