The rate of change has never been greater — or faster — for the footwear industry, with new challenges popping up every day in nearly all corners of the business, from navigating cash crunches and supply chain issues to understanding the latest technological advances. In its “Ask An Expert” series, FN asks industry leaders — all solutions-based providers — to take on some of the most timely topics.
Loyalty programs have been around for decades, but the modern consumer expects a more creative and personalized offering in order to stay engaged. Brands that are able to get this right will reap their own rewards, as their most loyal customers become ambassadors for their brand. But ineffective loyalty programs can become a time and money drain at best, and a negative customer experience at worst.
Eve Kolakowski, CEO at loyalty platform Rymax, spoke with FN about the building blocks of a successful program and how the B2B market can also take advantage.
FN: Consumers are frequently enrolled in loyalty programs that they then do not use. What might be causing this?
Eve Kolakowski: That’s absolutely correct. Studies indicate that the average U.S. household has enrolled in more than 18 customer loyalty programs, but only about eight are active. Consumers demand value and want cost savings, bottom line. They also appreciate personalized service that speaks directly to them; it makes them feel part of something bigger, so they become loyal to those kinds of brands. If they don’t feel they’re getting those things, they’ll focus attention — and dollars — somewhere else.
Consumers like to have a lot of options, and shopping for rewards is an experience for them. We’ve observed trends where Tory Burch sandals are paired with another Tory Burch accessory, like a piece of jewelry, to complete the look. The same trend is seen in men’s: If they’re purchasing a Ferragamo belt, they’re more likely to also purchase Ferragamo shoes or cufflinks to complete the look and tell a more comprehensive brand story.
FN: How would you define a truly successful loyalty and rewards scheme?
EK: Maximum client engagement and continued participation are the true definitions of program success. These two ingredients are key to continued client retention. A successful loyalty and rewards scheme offers much more than just discounts and promotions; you want to create a brand ambassador for your company and drive repeat business. The competition is steep and customer reviews are heavy influencers. Quality is demanded. In loyalty marketing, you must show sincere and timely appreciation to the customers to keep them loyal. I always recommend rewarding with trending, in-demand brands to keep customers coming back.
FN: Loyalty programs are usually associated with B2C businesses. How might these be successfully translated to a B2B relationship?
EK: There is much to be learned from B2C loyalty programs in the fanfare they attract, but at the core is a deep understanding of what drives value for customers and what will create a brand ambassador. The success of any B2B Consumer Loyalty Program comes down to the functionality of the recognition platform, your relationships with the reward offerings and your knowledge of your clients’ buying habits. The dated loyalty model of cash incentives doesn’t translate as well to business customers. Customers expect strategic design, an easy-to-use online platform, ongoing management, immediate order tracking, non-automated customer service and reliable fulfillment.
Companies that take advantage of employee recognition programs in conjunction with customer loyalty programs are often the most successful. Employees can independently engage businesses; increase sales through a reward system; and provide a reporting history that enlightens the business as to what motivates their employees best. This type of program is often not considered when thinking about “loyalty and rewards” programs.
FN: Are there ways that brands can launch a smaller-scale or partial loyalty program, that they can then scale?
EK: Certainly. Depending on the size of the business, the mindset of the client and the budget allocation, there are a lot of loyalty program options. If they’re an e-commerce business only, there are a wide variety of plugins and apps that help facilitate this, like Smile.io. I’ve seen many smaller-scale businesses try to manage a point system in return for products, but as they grow, they need more to offer and a team to handle it all. Whatever the company’s preference, loyalty marketing should be part of the strategy — it is much cheaper to retain your current customers than to solicit new ones.
FN: Shoppers are less brand loyal than ever right now. How does this impact interest in these kinds of programs and how can brands try to combat this?
EK: Customer expectations have changed significantly over the years. Amazon has created a culture of accessible variety and the expectation of instant gratification, so companies need to be smart and nimble when vying for a customer’s attention. The incentive industry trends are no different. At Rymax, we have built a brand portfolio that appeals to everyone, from millennials to baby boomers — there are currently over 20,000 active SKUs on the platform.
Although the pandemic has affected corporations worldwide, many of our loyalty programs are surviving and thriving as cash is not as liquid as it was before. That said, during these trying times, with unemployment rates higher than ever, customers have had to diminish their brand loyalty to purchase items at a more affordable price point, rather than tried-and-true brands that may be more expensive. So brands should pivot as well. Rymax has partnered with brands that offer more smart home and in-home products, to help accommodate those working from home, homeschooling and entertaining outdoors.