Rules of engagement: the role of brand loyalty and building a community

The business landscape today is highly competitive, and companies must be able to offer something different in order to attract and retain customers. While a product or service may help to secure a buyer’s initial business, there are many other factors that can influence a customer's decision to remain loyal to a brand.

For any business, engaging with customers and the wider community is crucial, not only for nurturing customer loyalty but looking at new and innovative ways to stand out from competitors. And according to a 2023 YouGov survey carried out by commerce tools, more than half of UK consumers (66 per cent) said they were more likely to use loyalty programs. So, how can businesses leverage customer loyalty and build a thriving community for more sustainable engagement in the long term?

The role of loyalty schemes and rewards

Consumer behaviour has undoubtedly changed over the years with brand loyalty declining as consumers view cost as the overarching factor to influence decision making. The rise of comparison sites to provide consumers with cheaper alternative offerings has also posed challenges for businesses to retain their valued customer base. But, by implementing a successful loyalty scheme or rewards program, businesses can target current and prospective customers and engage them from the outset.

By using loyalty schemes whereby customers can register and create an account, a new engagement opportunity is created. Generating a QR code or physical loyalty card can enable customers to collect points and various rewards, perks and promotions can be gifted following a continued number of purchases or site visits. Issuing various milestones throughout the customer journey, or introducing elements of gamification, for example, businesses can increase loyalty by incentivising the customer through receiving a gift or reward when the spending threshold is reached, or for completing certain tasks or challenges.

Across the leisure sector, for example, a gym or sports centre, this can extend to many areas. Whether it’s a member’s one-year anniversary or they have hit their desired monthly target gym visits, a reward can be gifted. This could be a discount in the café, club shop and even a free session or opportunity to bring a friend. This not only builds brand loyalty and encourages the customer to reach their health and fitness goals, but it also has a positive impact on their well-being and potential to introduce new members.

Leveraging data to personalise customer experience

The key advantage of encouraging customers to join membership schemes and loyalty programs is the gold mine of customer data that becomes available. By analysing the data businesses can gain valuable insights and make trends in user behaviour. For organisations across the leisure sector, this will allow senior leaders to understand the most popular offerings and issue personalised offers to encourage bookings across other areas to increase demand.

This could come in the form of a discounted rate for a gym class, access to all areas of the swimming facility and even a combined spa experience package. Not only will this make the customer feel like a valued member with exclusive benefits, but it will also allow them to immerse themselves in other areas of the business and increase the likelihood of spending there again in the future.

While the immediate benefit here is to enhance loyalty and impact spending habits, there is an additional advantage for staffing levels. Depending on demand, workforce numbers can be adjusted to cope with any busy periods in line with booking times, this will ensure the customer is given a high-class experience and not left waiting or delayed for their session or class. Another important consideration to take into account before analysing any customer data is to clarify that this will be used for marketing and operations during the sign-up process, helping meet GDPR compliancy by allowing customers to opt-in or opt-out.

Community and communication are everything

Encouraging community interaction is one of the most powerful tools businesses can have at their disposal. Bringing members together with other like-minded people will create an enjoyable environment whereby all will have common interests, which makes the process more authentic, and conversation can naturally unfold.

For individual members or people interested in being part of a wider group, building a community is particularly beneficial for them. Although the sole basis for being part of a gym or leisure facility is to undertake the activity itself, making connections and new friends can elevate the experience to the next level. This element is really important for longevity and is likely to encourage customers to continue paying a membership and valuing the brand or organisation if it means also meeting up with friends and socialising.

The benefit of building a community base opens more touch points and communication channels with the wider membership. Marketing and event opportunities can be created including specific social and networking sessions to encourage interaction.

One-to-one conversations with like-minded individuals will again feed into a more engaged and proactive customer. Due to meeting more people with similar interests, there is likely to be an upturn in spending habits as the user will be devoting more time to joining community events. If the customer feels comfortable and part of a wider community this will boost loyalty and reduce the chance of them choosing a competitor if their long-term friendships and community is with the current business.

 It's clear to see the true impact and benefits that brand loyalty can build. It’s therefore more important than ever for businesses to keep up with the shift in momentum and ongoing changes in consumer behaviour. While reaching new customers and prospects is a key target for any business, retaining current customers and driving brand loyalty must hold a central part of any business strategy in 2024 and beyond.