#3 Increase Customer Lifetime Value and Create Emotional Value with Card-Linked Loyalty
80–90% of a Purchase Decision Is Based on Emotions and Gut Feeling
Building on the traditional unique selling proposition, or USP, more businesses are incorporating emotional or values-based appeals into their branding strategies and sales messages. A successful emotional selling proposition, or ESP, can be a valuable, effective way to stand out from competitors and maintain customer loyalty.
Why Is This Important?
Digital and technological development has significantly shifted the balance of power between consumers and businesses. Traditionally, consumers were passive purchasers of products, but digital development has changed this. Today’s consumer is an active, engaged participant who helps shape the experience, challenges businesses and makes demands, thereby helping to set the agenda.
At the same time, accelerating globalisation has expanded the range of products available internationally and intensified competition. Businesses must work harder than ever to win customers over. Delivering a good product is no longer enough. To maintain their loyalty, customers must also feel special, selected and valued—not just once, but every time they shop with you.
Why Card-Linked Technology Matters
Card-linked technology responds to customers’ desire to feel special by rewarding them automatically every time they shop with you using their usual payment card. These ongoing rewards make customers feel special, valuable and appreciated, which matters. A study by the U.S. Small Business Administration and U.S. Chamber of Commerce found that the most common reason customers leave a business is that they feel overlooked.
Rewards therefore create both a financial reason to choose you over competitors and emotional value for customers that strengthens their loyalty. This benefits the bottom line by reducing churn and increasing customer lifetime value, or CLV. Research shows that businesses can increase earnings by as much as 125% by reducing customer churn by just 5% (Emmett C. Murphy and Mark A. Murphy, Leading on the Edge of Chaos, Prentice Hall 2002).
Card-linked technology also helps create a more personal relationship with customers, who receive a personalised message with their reward every time they shop with you. Regular reward reminders make the value clear, increasing engagement and the incentive to shop with you more frequently. Customers also feel more emotionally connected to your brand or business, which has a positive effect on performance. Research shows that loyalty programmes that have created an emotional bond with members earn 27% more from those members than programmes that do not focus on the emotional aspect (Emmett C. Murphy and Mark A. Murphy, Leading on the Edge of Chaos, Prentice Hall 2002). There is therefore significant financial potential in increasing customer loyalty by creating emotional value through card-linked loyalty (The game is changing – The Loyalty Report. Bond Brand Loyalty 2018).
Originally published by Loyalty Key.