There’s no doubt that most businesses prioritize customer satisfaction, but that doesn’t always mean that they deliver. Most companies assume that they’re providing a quality service to their consumers, but that doesn’t always go both ways -- in fact, studies show that 80 percent of businesses believe they deliver a superior customer experience while just 8 percent of consumers share that same belief.
So what’s responsible for this gap?
Well, more often than not, it’s because companies fail to understand the needs of their customers. To provide great service, brands can’t act on instinct alone; rather, they’ll have to get an understanding for what their customers really want. Fortunately we at Points believe that, when looked at through a loyalty lense, most consumers fall into one of three different categories: the brand loyal buyer, the customer with a passion for points, and the price sensitive shopper. These three types of consumers are common in nearly every industry and knowing how to appeal to them is essential for success.
The Brand Loyal Buyer
Brand loyal buyers prefer to do business with franchises that they’ve come to know and respect -- even if they have to pay more to shop with the brand of their choice. If businesses want to capture this demographic, they’ll have to craft a strong brand loyalty strategy, especially since 75 percent of Americans think that brands should be doing more to encourage customer loyalty. One proven way to cultivate and keep brand loyal customers is to develop policies that align with your consumers’ interests and ethical principles. By promoting a specific charity or taking a stance on an environmental cause, you’ll create a culture of corporate social responsibility, which will not only create better business practices for your brand but will also craft a bond with consumers who value community and societal issues.
The Customer with a ‘Passion for Points’
While some consumers shop with brands because of the causes that they support, others are driven by the promise of a strong rewards programs. In fact, we found that more than half (65%) of all consumers would choose to shop at one retailer over another if they had the option to earn loyalty rewards in their favorite airline, hotel, or travel brand on all purchases. This type of customer’s primary incentive for engagement is to earn as many rewards points as possible when shopping; brands can appeal to this group of shoppers by creating more relevant opportunities for them to earn and redeem rewards. One industry that’s quickly attracting rewards-focused customers is travel, where loyalty programs like Miles & More and Flying Blue are giving consumers the ability to earn frequent flyer miles on hotel bookings or spend frequent flyer miles to pay for a hotel booking. This gives travelers with a passion for points the unique ability to tie together their entire travel journey with their loyalty rewards -- and greater incentive to stick with a brand or program that can offer these opportunities.
The Price Sensitive Shopper
The third type of consumer that brands are likely to come across is the price sensitive shopper. As the name implies, these customers are drawn to items that are priced at a significant bargain or items that they believe are fairly priced. Capturing the price sensitive shopper requires a bit of balance -- price your goods too high, and they’ll turn to your competitors, but price them too low, and they may think that your offerings are of poor quality. If you’re not sure whether you should slash or raise prices, monitor your competitors and your industry’s market to see how your current rates compete. And since price sensitive shoppers are always looking to save, brands with loyalty programs should consider offering split currency payments, which are transactions that allow consumers to pay with a combination of loyalty points and cash.
At the end of the day, it’s impossible for brands to know exactly what consumers are after -- but the good news is that most shoppers are motivated by one of three things; brand loyalty, a strong rewards program, or price. By developing a strong brand voice (including a culture of corporate social responsibility), providing more opportunities for consumers to earn and redeem rewards, and offering split currency payment options, brands can deliver a superior customer experience for the three most common types of consumers that reside in just about every industry.
Danielle Brown is the VP of Marketing at Points, the global leader in loyalty currency management. Via a state-of-the-art loyalty commerce platform, Points provides loyalty eCommerce and technology solutions to the world's top brands to enhance their consumer offerings and streamline their back-end operations.