A Good Experience Leads to Loyalty

According to an article by Mediapost author Gary Leopold, most customers have had their fill of points. Loyalty Programs that have so-long based their system on points-based rewards may have to change their focus. Leopold quotes USA Today research stating that “there are over 17 trillion unredeemed frequent flyer miles (with a real value of over $480 billion) and nearly 89% of all miles are never redeemed… Not to mention that Americans on average already belong to 14.1 programs, yet are active only in a little over six of them.”

Instead, the key to building real customer loyalty, it seems, is to offer consumers a new or exclusive experience rather than simply offering another points program. Leopold cites a few examples: companies like Starwood offered SPG members the opportunity to attend an exclusive party and American Express invited their card members to take advantage of premium seating at New York’s Fashion Week.

This article by Leopold is in line with research by Forrester Research’s Bruce D. Temkin who reports that customer experience is what generates real customer loyalty. Temkin shows that that superior customer experience can generate tangible loyalty results for brands: “customer experience leaders have significantly more loyal customers than customer experience laggards. On average they have 14.4% more customers willing to buy from them, 15.8% more customers reluctant to switch away from them and 16.6% more customers likely to recommend them.”

What about your customers? With experience being the new premium for customers, what can you offer them on the experiential level? What responses do you see from your most loyal customers? How are you working to build new experiences to maintain long-standing relationships?

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About Joshua Hoffman

Joshua Hoffman is Technology Specialist at Microsoft and a frequent contributor to Research Access.