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The Language of Loyalty
By Matt Sanderson, President & CEO, SmithBucklin

The pricing of memberships, products and services is one of the most challenging issues associations face today, especially in a world in which anyone can comparison shop almost instantly using any one of several devices. While many of us as consumers have become accustomed to letting “the deal” drive decisions, there are lessons from many industries that teach us that price can be a trap that leads to low-value and low-loyalty relationships — something associations must avoid. And, as easy as that sounds, even the best minds in business struggle with this challenge. One example is the recent highly public clash between Ralph Lauren’s founder and its former CEO, Stefan Larsson over the company’s practice of discounting, which resulted in a share price decline of 24 percent over the past year and the loss of Larsson’s job. It’s clear that associations need to pursue a different paradigm. And there is some compelling recent research that provides guidance.

Loyalty and Brand Trust

PwC Global’s Total Retail Survey 2016, which polled 23,000 shoppers worldwide, found that 60 percent of consumers say price is the reason they shop where they do. Interestingly enough, however, brand trust was second with 32 percent citing it as their primary motivation. The latter factor should be our goal for associations, because if we really want our members, exhibitors and sponsors to feel they are receiving great value and remain faithful to our associations, brand trust is what will create high levels of brand loyalty. And brand loyalty often trumps price, because it generates positive feelings toward the brand and a dedication to purchase from that brand repeatedly, both now and in the future, regardless of a competitor’s actions or changes in the marketplace.

A recently released Accenture study also sheds some important light on loyalty. After surveying 25,426 consumers around the world, the researchers concluded that “it’s time for organizations to take a fresh look at loyalty,” and “the traditional ‘low price’ and ‘reliable service’ mechanics are no longer as effective in driving loyalty.” The study also showed that 66 percent of consumers spend more on “brands they love.”

Loyalty and Value

The loyalty associations should be striving for is based on a mutual exchange of value. After all, if we aren’t striving to deliver great value and using it to create loyal members and association partners, what are we doing? In addition, the loyalty all of us should be working to cultivate in associations requires relationships built on faith and trust. Building relationships in order to create loyalty is the one thing that can keep associations out of the “race to the bottom” of discounts. In an economy that values “stickiness” in customer relationships, loyalty is the ultimate “sticky” solution. If members and partners don’t see your association as more than a conduit to the lowest price, where are they going to go when there is a sale around the corner?

If we aren’t working — actively working — to foster that long-term loyalty, with our membership and our association partners, then we are thinking about today at the expense of tomorrow. Ultimately, loyalty will not only sustain our associations, but it will also enable growth. The solutions you provide to your members and partners, and the solutions provided by those partners who are most loyal, allow you to achieve returns on your own association investments.

Improving Loyalty

The Accenture study noted previously also concluded that organizations are wasting billions of dollars each year on customer loyalty programs that don’t work like they used to. The study’s authors concluded, “With millions of loyalty points sitting dormant and the majority of U.S. customers (78 percent) retracting loyalty at profit-crushing rates, organizations must pay attention to the new factors driving customer loyalty …”

Here are four “languages of loyalty” that Accenture said are driving customer relationships in the digital age. I hope they might spark ideas that will help your organization.
  1. “Tokens of Affection” — Fifty-nine percent of U.S. consumers feel loyal to brands that present them with small tokens of affection, such as personalized discounts, gift cards and other special offers that reward their loyalty. For associations, this can mean keeping track of, and recognizing, our most loyal members — or those who we want to encourage to be most loyal to us.
  2. “Get to Know Me” — Fifty-one percent are loyal to brands that interact with them through their preferred channels of communications. Forty-one percent of U.S. consumers are loyal to brands that offer them the opportunity to personalize products or services to create something that is bespoke to them. Associations can work to tailor offerings to members. They can ask members about preferred communications channels and then segment communications accordingly.
  3. “Thrill seeker” — Forty-four percent of U.S. consumers are loyal to brands that actively engage them to help design or co-create products or services. Forty-one percent are loyal to organizations that present them with new experiences, products or services. This should give associations confidence that tapping new volunteers to get involved in such activities will be not only welcomed, but also loyalty-generating.
  4. “If you like it, I like it” — Forty-two percent are loyal to brands that their friends and family do business with. Thirty-seven percent show loyalty to brands that actively support shared causes, such as charities or public campaigns. These results should not be surprising to anyone in the association industry. We know that in associations, conditions exist for incredible loyalty through the communities we build and foster, and the power of shared connections. In fact, the larger business community — and even world-class companies — should be turning to associations to better understand and leverage this language of loyalty.
By making conversations about value expected and value delivered a top priority, and by focusing on modern techniques that have proven to be effective, associations can ascend beyond the battleground of price and build loyalty. By doing so, their impact and futures will be changed forever.

  Matt Sanderson, President & CEO, SmithBucklin, has more than 20 years of business development, strategy and leadership experience. He previously served as executive vice president and chief executive of SmithBucklin’s Business + Trade Industry Practice. Prior to that he was executive vice president of the Print Services & Distribution Association, a SmithBucklin client organization focused on the reseller supply chain for print, marketing and business communications.

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