The Three Rs of Loyalty: Lessons from Classroom to Boardroom

It is often said that the lessons we learn as children will guide us through our lifetime, and I am reminded of that everyday when I think of our customers in the loyalty industry.

As kids, we all learned the three Rs of basic education – reading, writing, ‘rithmatic. But there were three other Rs at play as well, and these three Rs are what I consider the foundation of any long-lasting customer relationship. In the classroom, these three Rs were unspoken, but in my company, we recite them daily: Reward, recognition and relevance.

This is how they apply to customer loyalty:

Reward: The tangible thank-you we give people for changing their behavior and allowing us to gain insights into what they value as consumers. Points, miles and coupons are common rewards, though they can be tailored to specific products or times to better resonate with the consumer.

Recognition: This symbolizes an appreciation of the customer’s commitment and is typically delivered in a soft reward, such as a complimentary upgrade, preferred booking status, or front-of-the-line access to a special event. Recognition makes the customer feel special.

Relevance: Of the three, relevance represents the most powerful opportunity for companies to create deep emotional loyalty among their customers. Relevance shows you understand who your customers are and what they care about.

A good example of the three Rs exists with GameStop, the world’s largest video game and entertainment software retailer. GameStop’s Power Up Rewards offers paid-tier members the chance to win aspirational, one-of-a-kind experiences. With each in-store transaction, members can receive an entry into GameStop’s monthly Epic Reward Giveaways, which have included VIP access to the coveted Comic-Con International convention in California or tickets to a NASCAR race in the United States.

Another example of three Rs reaching people in new and inventive ways is through LoyaltyOne’s AIR MILES for Social Change program, the first and only social venture inside a coalition loyalty program. Through our work with the Ontario Power Authority, for instance, we offered rewards to every consumer who pledged to reduce energy consumption. The result? The campaign helped increase the OPA’s pledge numbers by almost seven fold, and at a third of the cost of its previous campaign.

Personally, I feel the three Rs of loyalty are essential to achieving emotional loyalty, and ultimately customer intimacy. Your customer data will get you there, by helping you to understand the demands and aspirations of your customers and then using that knowledge to deliver more relevant communications, products and services.

And if ever in doubt, let the lessons of your childhood guide you.

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