- – Loyalty programs offer intrinsic consumer rewards but leave little room for profit.
- – Only 10 per cent of businesses cited loyalty programs as the primary driver of their repeat business.
- – 57 per cent of businesses said that established relationships with their customer base was the primary driver of repeat business.
- – Customer-centric events show your appreciation for your customers, while giving you an opportunity to strengthen relationships and generate opportunities for invaluable insights into your target market.
If you want to build brand loyalty and reward your customers for sticking with your brand through thick and thin then customer events, rather than loyalty programs should be your focus.
Loyalty programs are almost automatic for most major brands who use them to retain existing customers and attract new ones. According to Access Development’s Ultimate Collection of Loyalty Statistics, 27% of consumers said that they would sign up to a company’s loyalty scheme while Ericka Morphy, a contributor for Forbes reports that some companies generate up to 60 per cent of their revenue through loyalty programs.
Still, Morphy points out that in a recent study by the Boston Consulting Group, they used a mathematical formula to prove loyalty programs actually make it difficult for companies to make a profit. So while the intrinsic rewards are there for consumers, these consumers do not often spend enough to allow the company to break even on the rewards given.
You may already see the philosophical flaw in these types of programs. Companies who are using loyalty programs to try to encourage consumers to spend more money with the brand are missing the point. Rewarding brand loyalty should be about the consumer, not about the brand. Just as people don’t give a gift to get one in return (at least one would hope), brands who want to reward customer loyalty should focus on building existing relationships rather than giving away free swag.
When it comes to building relationships, event marketing is king
There is arguably no better way to build relationships with existing customers than through events. According to the Event Marketing Institute, 74 per cent of people that attend events have a more positive opinion of the brand being promoted.
So, if your company is looking for a way to reward your existing customers then why not invite them to an event that makes them feel appreciated? For auto manufacturers, customer-centric events show your customer appreciation, but they also have a number of important outcomes, including:
- – Ensuring your brand has your finger on the pulse of your target market’s core values
- – Getting product feedback and ideas from the customers who use your vehicles
- – Generating buzz around new vehicles (see how one drive is worth a thousand words).
- – Teaching your customers about the intricacies of your vehicles – especially the technological advances and how they can impact consumer’s day-to-day lives
- – Encouraging word-of-mouth reviews and referrals (you can be sure your customers will tell their friends about the event)
- Harnessing positive, organic PR through the social media buzz surrounding your event.
Most importantly, in-person events, not loyalty programs help your brand build strong relationships with your customers. According to the Ultimate Collection of Loyalty Statistics, 57 per cent of businesses said that established relationships with their customer base was the primary driver of repeat business. Only 10 per cent of businesses cited loyalty programs as the primary driver of their repeat business.
When your event is strategically executed, you’ll have created an enduring line of communication and stronger relationship with your customer base. Brands who build these solid relationships with customers are more likely to earn customer loyalty and trust.