The technology of loyalty software allows us to collect data, analyze it and make decisions on how we can best interact with our customers. However, the loyalty revolution is not simply a technological one. 

Just as we have seen with Facebook and other types of social media, there are psychological implications which are yet to be fully understood. What is understood is that the availability of information means more people are aware of how they can potentially be manipulated.

This is why using psychology in your customer loyalty program is not only necessary, but beneficial to all parties.

Here Social&Loyal goes further into how the power of the mind builds loyalty.

 

Know Your Customer

The technological side of customer loyalty affords us the ability to not only build customer demographics, but also to know the individual customer. This means taking the information they get from surveys, registration forms, social media and anything else to which they elect access and creating profiles for them.

Just in case this sounds like psychological warfare rather than loyalty, these profiles are only to be used to build a relationship between brand and customer. While we are still finding out how implementing a psychological approach can help build loyalty, we already know that we don’t use it to exploit.

Instead, this data allows us to help the customer build their identity with our brand. Or, perhaps more appropriately, ensuring our brand has an identity they want to be associated with.

The fact that marketing has applied psychology to sell goods and services is nothing new. However, the psychology of loyalty has seen a change. No longer are customers going to allow themselves to be taken advantage of. Brands will still try to influence a buyer’s decision, but they will do so in a way which matches their values, not trying to instill any which are inappropriate.

This is a complicated psychology which will take longer than a blog post can offer to investigate. What can be conveyed is that data allows us to build identities for our customers and then respond to them. Managing that data to build loyalty is where loyalty software comes in.

 

Identity within a Community

Once these identities are built, then it is important to know how they reinforce a greater community. No one lives in a vacuum and social media affords us greater opportunity than ever to interact with others.

When it comes to a brand, using these methods of contact requires thinking about the impulses behind a customer’s actions. Knowing what it is customers respond to in your brand allows you to make the right decisions in moving forward. These decisions can involve new products, methods of promotion, branding style changes and even helping to choose who you work with on certain projects.

Your loyalty software can monitor likes and shares, check for trends and see how your network fits into larger ones. In doing so, you can ensure your customers don’t just feel like purchasers, but as part of a community.

 

Healthy Competition

Technology allows those in a community to share, discuss and appraise within it. Communities also foster elements of competition. While obsessing over the amount of Instagram likes you may get or feeling dejected by another’s flawless online presence is unhealthy, competition doesn’t have to be.

Promoting contests on social media, creating forums for discussion and allowing individual users to promote their own identities can help build loyalty. It use the psychological approaches we take to group mentality. It is inclusive and accommodating, but will also stand up for its members.

Such inclusivity doesn’t mean there aren’t stand-out members. Another way to respond to the psychology of customers is to appeal to their sense of aspiration. With brand ambassadors you can do just that. By showing customers what being part of your brand means to someone else, it helps them to identify you with themselves.

 

The Psychology of Reward

If your brand has a reward system (and it really should if at all possible), then using psychology to build loyalty can be great fun. Different types of rewards will provide different types of customer interaction, but all of them can have an element of gamification.

Gamification is increasingly how we interact with the world at large, including brands. We want to achieve certain things, we feel bad if we don’t and we always want to be striving forward. While there is a slightly worrying element in that we continuously need new stimulation, an effective loyalty program will mean a customer is never bored and that your brand is a game worth playing.

By having a points system reward scheme, your customers can get immediate responses to the actions they partake in on a daily basis. This feeds into their brain, releases positive chemicals and associates your brand with success. Or, at the very least, with fun.

It also goes back into the community element by allowing us to factor in social ranking. Your rewards system can keep it only between your brand and the customer. However, allowing customers to rank against each other means they can better visualize what being with your brand means to them. It is always more fun to play against a friend than against the computer.

It has been documented that customers leaving your brand isn’t always the problem. Them changing their buying patterns to stop investing as much with you is. Using these micro-steps to build loyalty can cut defections from your brand by as much as 30%.

 

Reinforce Loyalty

These elements all use psychology as a way to improve the type of engagement a brand has with its customer as well as reinforcing loyalty. This psychological approach of reinforcing loyalty, however, involves much more.

It means a brand has to project the kind of identity which is subconsciously desirable to the customer. You need to be a brand which is unique in its approach, positive in its interactions and respectful in its engagement. These appeal to the psychology of today’s customer. One who is social, valued and individual. Being a brand which respects the individual means knowing them and this is where customer loyalty software is so useful.

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Kelly Rogan
CMO Social&Loyal
Kelly is our VP of Business Development and a loyalty and customer retention expert having worked with large brands all over the globe to grow true brand loyalty. She’s written for media outlets such as Forbes, Inc and Startup Grind on topics related to digital marketing and brand loyalty. She is passionate about combining behavioural psychology and technology to boost results.
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