The Science & Art of Loyalty
The fastest growing and best performing businesses tend to always have two key ingredients in common; they have highly engaged employees and evangelically loyal customers. The two ingredients are intrinsically linked and WILL lead to increased profitability and commercial success. This is the power of Rewarding Relationships
Our RewardingRelationships mantra establishes the connections between profitability, customer loyalty, employee satisfaction and loyalty, and productivity.
- Great leaders communicate mission, purpose and values with gusto. They balance challenge and support to encourage high performance and ownership which leads to...
- Committed and productive employees feel inspired by great leadership and are driven to deliver outstanding internal service quality and results, which in turn fuels...
- Motivated sales channels, the external face of your business, which when aligned with your values and communicated well will deliver outstanding external service quality to your customers leading to...
- Loyal customers, who return to you time and time again, spend more and recommend you to their friends and colleagues.
- Align all the links in the sequence effectively and you will enjoy increased profits and commercial success.
Understanding the 'Happy Chemicals'
What is loyalty?
95% of our purchasing decisions are unconscious urges, which are driven by emotion. We make many decisions with our hearts, not our minds - well metaphorically speaking! and what really controls our emotions are our brain chemicals. Three in particular - Serotonin, Dopamine and Oxytocin. These chemicals influence our mood and define whether we feel motivated and rewarded.
Serotonin is the ‘wellbeing’ hormone. It flows when you feel proud, significant or important. People get a boost of serotonin when they achieve a gain in status or are praised for a job well done.
Dopamine is the ‘reward’ hormone." This one feels great! It’s the high we get when we are rewarded or achieve a goal. It motivates us to set new goals because it’s an addictive feeling.
Oxytocin is released when you form strong and long-lasting emotional connections, and is the most important chemical when it comes to long-term loyalty. In fact, we believe in the power of Oxytocin so much, our logo and branding is inspired by the chemical structure of the Oxytocin hormone! Read more about how Oxytocin and trust are linked in this fascinating article from Harvard Business Review.
In order to form long-term relationships with brands (and people for that matter), people need positive experiences whenever they’re interacting, and to feel like their personal values are being reflected with the relationship.
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SNOG, MARRY, AVOID?
Why is loyalty important to
As you've seen from our #RewardingRelationships sequence above, fostering strong relationships is important to the success of any business and how your customers perceive your business is critical. If you've ever heard of, or played, the playground game "Snog, Marry, Avoid?" or one of its variations, the concept of the game can be used to distill down how your prospects or customers view your business. So what kind of business do you want to be?
Some businesses don’t treat their customers well at all, nor their employees for that matter. Not necessarily on purpose, but so many companies are laser focused on driving new business that they don’t give a thought for looking after employees or nurturing existing customers.
Some businesses run sexy promotions, offer discounts, or rebates to drive short-term but, ultimately, fickle behaviour. This behaviour creates a promiscuous environment, attracting mercenaries who are only loyal because you are paying them to be in that moment… what happens when your competition offers a sexier promotion?
The best businesses are trusted, reliable and form long-term profitable relationships with their employees and customers. They reward and recognise the right behaviours, engage in two-way dialogue and share beliefs and values.
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The Power of Points
Taking into account these complex factors, one compelling strategy stands out in promoting loyalty: points-based reward programmes. Collecting points stimulates our brain's reward system, fosters positive emotional experiences, exploits psychological biases, and creates a sense of community, all contributing to enhancing loyalty.
Every time we earn points, we experience a dopamine rush, reinforcing the desired behaviour and fostering an association between this positive feeling and the brand. Anticipation of rewards also keeps dopamine levels high, creating a cycle of positive reinforcement.
Emotionally, the satisfaction of earning points and the excitement of getting closer to a reward can create a strong emotional connection with a brand and get the oxytocin flowing. Meanwhile, psychologically, the sense of progress and investment fostered by earning points taps into powerful cognitive biases, further driving loyalty.
Traction: How to create world class loyalty programmes.
Unleash the potential of your programme with our game-changing 'Traction' model. A truly successful and effective loyalty strategy is based on the blend of six key components which, when present, give you an amazing chance of success.
Along with our award-winning SaaS platform, Traction gives you the tools to create consistently outstanding experiences and WOW moments for customers and teams. By rewarding, recognising and reinforcing positive behaviours we open the door to two-way communication and learning on a platform that people WANT to use.
Learn more about our Traction methodology