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GUEST COMMENT Forget loyalty: why experience is the hottest currency in online retail

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In a world that worships original, money-can’t-buy moments, loyalty programmes hold diminishing sway. Few people will turn down a 10th free coffee, or an exclusive members’ discount. And yet, like an ice-cream that tastes delicious but melts as you eat it, these time-honoured tactics lack substance. They’re simply not built to last.

Part of the problem with loyalty schemes is that they’re too easily replicated. Any brand can come along with a rival idea to trump their competitors and steal market share. The bigger issue, however, is what loyalty actually means. The consumer is loyal as long as it suits them, in terms of points collected or offers redeemed. But the relationship goes no deeper than that.

In order to lay down anchor with their target audiences in a crowded landscape, online retailers need to think of loyalty via the lens of another key differentiator: experience. Over 85% of consumers are willing to pay more for a great customer experience and yet, only 51% of consumers believe that companies understand their needs and expectations.

To power up lasting brand resonance, the booming online sector needs to get to the heart of customer problems and deliver actionable value for its audiences – all via the medium of experience. Here’s how: 

  • Create the groundwork for deep-rooted empathy

In the US, 1 in 3 customers will leave a brand they “love” after just one bad experience, while 92% will completely abandon a company after two or three negative interactions. Key to combating this is empathy.

In experience terms, this means brands need to ask, “how can we serve and help?” rather than “how can we convince and sell?”. Much like a relationship in real life, it’s about sometimes putting the interests of yourself second, in order to make your significant other (your audience) happy. 

This dynamic has been particularly pronounced in the past year. Alpro, for example, launched a user community platform to support out-of-work baristas, while Burger King threw its support behind the food industry in an eye-catching campaign that encouraged customers to shop from its arch rival McDonald’s. Booking site, meanwhile, urged people to stay at home, sending a clear message that put the wellbeing of its customers above the bottom line. 

Part of this empathetic approach involves brands putting themselves in their customers’ shoes. They should use methods such as social listening to proactively uncover the frustrations that their customers encounter, and then set out to solve them.

Art Series Hotels, an Australian boutique hotel chain, overcame a major pain point of customers having to checkout at 11am – an industry standard – with an “overstay checkout” programme that tracked check-ins to allow guests to stay on for free in their rooms where possible. 

Meanwhile meditation app Calm recognised the world’s growing insomnia crisis by creating its Sleep Stories series: a huge bank of bedtime tales narrated by the likes of Idris Elba and Kate Winslet, which have become particularly popular during the pandemic

  • Focus on investment and value

Online retailers need to scrutinise their outlay on loyalty schemes and consider where it may be better spent, too. Take Verizon Media’s landmark Fabric of Reality event, which used extended reality (xR) tech to present interactive ‘rooms’ within a virtual museum at London Fashion Week last year. Or Asics’ virtual reality trainer launch a few months prior, which allowed audiences around the world to explore its new designs up close in an online innovation lab. 

These kinds of boundary-pushing events begin with a razor-sharp focus not only on budget, but also on value. Most people struggle to articulate what they actually want from a brand – they are, in reality, driven by subconscious triggers.

Brands need to interrogate factors such as sensory appeal, emotional motivation and sense of belonging in planning experiences. This forensic mindset will lead to experiential gold, such as Dove’s viral “You’re More Beautiful Than You Think” campaign, which powerfully exposed the lack of self-worth many of us feel deeply. 

  • Put the customer first

Exceptional customer experience is all about adopting a personal, empathetic stance that forever punches above expectation. And within this quest, it’s no longer good enough to compare your brand’s customer experience with direct competitors. 

Since online is a great leveller, consumers are increasingly likely to equate all brands with each other – irrespective of the products or services they offer. Little wonder, then, that a money management app like Emma, slated as ’your best financial friend’, offers the same level of  intimacy and ease of use as subscription pros the Pasta Evangelists, or the personalised skincare service Skin + Me

The lesson here is that Insurance or financial brands need to be as intuitive, responsive, supportive and proactive as anything their customers might have come across in online retail because that is how customers will judge them. 

Experience is and will remain pivotal for online brands. Those likely to thrive will place an overwhelming focus on empathy, in understanding the real pressures their customers face. They will leverage smart technologies, freeing them up to focus on moments of true surprise and delight. And they will win because they will actually do what so many claim to – they will put their customers first. 


Richard Palmer, European Strategy Lead at digital consultancy Appnovation

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