Defining Business Loyalty

Hello and welcome to my first blog post, where I’ll be discussing all things marketing and strategic communication as we progress throughout this semester! I’m so happy you’re here!

Today’s post will mainly focus on how companies can build/maintain loyalty and engagement with their customers using the Loyalty 3.0 method. I will also be expanding upon the factors that go into forming this effective approach and what this means for growing businesses. As part of our assignment this week we were also tasked with reading the introduction and first chapter of our textbook, Loyalty 3.0 written by Rajat Paharia, entitled “May You Live in Interesting Times”. Now that we have an idea of what I’ll be going over today, let’s get into it! 

The Importance of Customer Loyalty

We can’t begin to talk about ways to build loyalty without first understanding what it means. According to the textbook loyalty is used to “give customers a compelling reason to continue to patronize the business and to resist competitive offers” (Paharia, 2013, p.9). Customers are the driving advocates for your brand. Because of this, your business strategy should make an effort to adapt effective techniques that will keep your consumers engaged and happily returning to your company.

The Dijulius Group explains that returning customers are highly valuable to any business initiative. They “spend more than new customers, provide higher satisfaction scores, and act as advocates for your brand more often than new customers” (DiJulius, 2021, para.22), expanding awareness, profits, and interest in your company with a broader audience. In other words, they are a key part of your business!

Main Loyalty 3.0 Factors

Strong loyalty methods take the form of three important factors; motivation, big data, and gamification. Without these factors, it is difficult for companies to effectively reach their target demographic and understand how to captivate their attention and keep them coming back for more.

Motivation relates to what drives human interactions, behaviors, and decisions. Big data refers to consumer data that companies utilize to curate experiences that will appeal to their target audiences (Paharia, 2013, p.9). Lastly, gamification applies to the idea of “applying game elements to non-game contexts…to increase participation and retention by creating fun and meaningful experiences for consumers” (Wright, 2023, para.1). This typically takes the shape of points, badges, challenges, and rewards that can be earned. 

A perfect example of this is Starbucks’s Star Reward Program, where customers can earn points when they purchase a coffee or pastry through the brand’s mobile app, to eventually receive free rewards and perks. While I am not personally that committed to Starbucks, I have close friends who are avid coffee drinkers who utilize this program often and find it to be a great investment. They continually return to the brand because it not only piques their demographic’s interest but also motivates them to keep buying Starbucks’ products to receive something in return that sparks pleasure in their daily lives. 

Keep your eyes out for next week's blog post, where I’ll be covering the factor of motivation in more depth!

Citations

DiJulius, J. (2021, April 21). The DiJulius Group. The DiJulius Group. https://thedijuliusgroup.com/how-to-make-your-customer-experience-so-good-price-becomes-irrelevant/

Rajat Paharia. (2013). Loyalty 3.0 : how big data and gamification are revolutionizing customer and employee engagement. Mcgraw-Hill Education.

Wright, J. (2023). What are the benefits and challenges of gamifying your affiliate program? Linkedin.com. https://www.linkedin.com/advice/0/what-benefits-challenges-gamifying-your-affiliate