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Loyalty Programmes must begin to move beyond physical rewards

One of the ways that companies have been able to meaningfully engage with customers and deliver on expectations, is through their loyalty programmes. These programmes are often focused on providing customers with extrinsic rewards, such as discounts on products and services or loyalty points that can be spent in-store and are aimed at incentivising repeat customers.

However, as consumers begin to favour a shopping experience that allows for minimal contact with brands, like click-and-collect and drive-through checkouts, businesses must look at evolving their loyalty programmes beyond what is quantifiable.

Intrinsic incentives can help to inject a dose of innovation into a company’s customer loyalty strategy and have been proven to be far more effective than tangible, extrinsic rewards as they tie a feeling or emotion to the company.

Integrating intrinsic motivators could play an important role in giving businesses a competitive advantage in an environment where loyalty programmes are so commonplace that they no longer engender loyalty. They can help to boost individual satisfaction and feelings such as a sense of value and belonging, enabling companies to establish a deeper connection with customers.

So, what would the deployment of intrinsic incentives in your business look like?

Gamification is one of the ways that a company can create engagement with customers that facilitates a feeling of achievement and of having earned their rewards. Using game design elements and principles in a loyalty programme can play off an individual’s natural competitiveness and make use of the fear of missing out (FOMO) to build a community and increase brand loyalty.

Another example can be found in digital platforms like iMessage, Snapchat and even work-oriented apps like Slack and Gmail that integrate secondary social media app Bitmoji, allowing customers to be creative and express themselves through cartoon avatars. These self-reflective avatars can then become comics, GIFs, emojis and reactions that can be used when communicating on these platforms.

What connects these different models of intrinsic incentives is that they all allow for more customer interaction with brands at a level that is engaging and fun.

As intrinsic incentives present their impact via emotions such as satisfaction, achievement and happiness, they can be difficult to quantify. Therefore, you might be wondering how you can measure their impact on brand affinity and customer loyalty once they have been adopted?

While it may seem a difficult task to measure and track the progress being made through the introduction of intrinsic motivation into loyalty programmes, there are a few simple steps you can take. First, establish a baseline of the interaction or engagement of your customers before integrating these factors into your business. This will give you an overview of where you are right now so you are later able to compare it to where you would like to be.

Now you can implement targeted and specific motivators aimed at driving the desired behaviour from customers and adapt these incentives based on their performance in comparison to your baseline. This process allows you to fine-tune your tactics based on empirical evidence that can help you determine if you are moving in the right direction or not.

Repeat customers are essential to generating a consistent and dependable stream of revenue for any business. However, the pandemic has made it a matter of survival for companies to ensure that customers return to their business. Any company that wants to bring customer loyalty back, must break free from the traditional customer loyalty experience and look to intrinsic incentives to facilitate deeper and more authentic engagement with their customers to have them coming back for more.

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