Are we discounting loyalty?

Jemma Marchant, Deputy Managing Director

January, as we know, feels like the longest month of the year – not just due to the dark mornings and drizzly weather, but the bombardement of sale emails that have been going since Black Friday (or Black Friday Week, as it turned out to be last year). Although the Valentine’s Day spam is coming in thick and fast, regardless of the time of year I don’t think more than 15 minutes can go by without a new retail discount email landing in my inbox. Charming and ‘personal’ as they aim to be, these offers don’t feel quite as exciting and special any more. The endless barrage of discounts makes it all feel a bit transactional, as though my loyalty is being bought rather than earned. We are now so conditioned to expect a deal that full-price items feel almost like an anomaly. But is this what loyalty should look like?

Given the global economic challenges many have faced over the last five years or so, it’s no surprise that many brands have fallen into the discounting trap – constantly offering a ‘welcome discount’, ‘personalised price’ or ‘exclusive discount code’, which inevitably finds its way onto savvy shopper forums. While we all love feeling like we’ve snagged a bargain, it’s important for brands not to rely solely on discounts as their main form of customer engagement, especially if their long-term aim is to build a loyal and loving relationship.

Discounts might win the battle for a quick sale, but they rarely win the war for long-term loyalty and emotional connection.

The multitude of discounting opportunities seems endless – 15% off for email sign-ups, Valentine’s Day specials that have little to do with the product, Easter comms that start a month in advance, and the random 20% (just for the hell of it) voucher that make their way through – with price being the number-one factor for keeping customers loyal to their favourite brands, is there any point in doing anything else? And, if so, what?

Customers are looking for something deeper, something that makes them feel valued beyond their wallet: emotional loyalty. The kind that isn’t swayed by a competitor’s flash sale.

Being a woman in her early 40s who’s trying to feel and look her best, I am constantly bombarded with new things to buy – things I didn’t even know I needed. Products promising brighter skin, better sleep, a healthier gut or a stronger body. It feels like every day brings a new brand, a new promise and a new deal. But in a world where we’re curating our lives and pining after the ‘right brand for me’, how do we build meaningful relationships amid this commoditised, noisy marketplace? How can brands ensure customers come back, not just for a price they love but because they feel truly seen and valued?

The generations redefining value

For a while now, Millennials and Gen Z have been leading a transformative shift in what ‘value’ means. Instead of simply looking for the cheapest or highest-quality products, they’re reassessing their priorities. We know that a key driver for their chosen brand portfolio is ensuring a brand aligns with their values, whether that’s social, environmental or functional. With three-quarters of shoppers reporting they have parted ways with a brand over a conflict in values, it’s time brands accept this truth and rethink their approach – recognising that loyalty must be earned through alignment with the customer’s beliefs and lifestyle, not just their wallets.

Can you buy loyalty?

With ‘members-only prices’ looking suspiciously like non-member prices and loyalty programmes that require five months and 50,000 points just to get a small discount, we are all much more suspicious of the ‘deals’ we are presented with. Loyalty done right means fostering an emotional connection, consistently engaging customers, personalising their experience and rewarding them in ways that truly resonate. Customers want brands to understand them, to reflect their values and to genuinely care about them – not just their spending habits.

A deeper connection

A compelling loyalty programme creates an emotional connection through shared values, storytelling and platforms where customers can engage with each other.

Dove does this brilliantly, owning the ‘real beauty’ agenda and driving honest conversations that engage a whole community of all ages, identities and backgrounds. They commit to their body confidence mission through initiatives like #keepbeautyreal and the ‘low self-esteem’ project. It seems obvious to say that this isn’t something that happens overnight; it’s built over time through authentic interactions and shared experiences. However, it seems that this can be overlooked by brands new to the market.

How can you genuinely understand what makes your audience tick, and strive to be a brand that stands for something and demonstrates that it exists as something beyond profit?

Say it how it is

Customers want to know how rewards work and how their data is being used. When brands are honest, trust follows.

Take Skin+Me – they not only simplify the jargon around skincare products but also offer a personalised educational experience that walks customers through their skincare journey in a transparent and easy-to-understand way.

Transparency also means admitting when you get things wrong. Consumers today are incredibly savvy and can spot when a brand is hiding behind jargon or trying to hide the truth. By being open and honest, even in challenging situations, brands can build deeper trust, which is a cornerstone of loyalty.

Pink Honey faced controversy in 2023 for an ‘all-white’ influencer trip, leading to the founder of the viral product going online to make a tearful apology. Customers and non-customers expressed disappointment in the brand following a shoot that lacked diversity and representation.

Loyalty goes both ways

It’s not just about one-time deals or a retail calendar sale. Brands need to maintain regular and relevant communication, keeping themselves top-of-mind through the right channels, whether that be newsletters, social media or personalised updates.

Goop, for example, has managed to make their brand synonymous with a holistic lifestyle, complemented by podcasts and events that keep customers engaged well beyond a single purchase. Brands that actively involve customers in interactive and participatory experiences, such as co-creation campaigns or user-driven content, are more likely to drive advocacy.

Consistent engagement is about building a brand presence that customers enjoy interacting with, not one that just shows up when there’s something to sell. Customers want to feel a sense of belonging, a feeling that they are part of the brand’s journey and not just observers.

It’s personal

There is a difference between something being personalised and personalisation; often this can be overlooked or confused. True personalisation means using data and insights in a meaningful way – understanding your customer and offering them something unique. But it’s crucial that the data used is accurate and the value they receive in return is genuine. The wrong email or the wrong personalised offer can do more harm than good.

Amazon once mistakenly sent out baby gift registry emails to customers who didn’t need them, causing unintended hurt. This highlights the importance of thoughtful personalisation and getting it right. Personalisation must feel bespoke and relevant, not just a generic attempt to upsell. The more a brand can make customers feel understood and special, the stronger the loyalty they will earn.

A seamless experience

Whether on your website or app, the customer journey needs to be smooth and engaging. This is where many brands falter, focusing only on getting the customer to the site and forgetting to guide them effectively through the buying experience.

Brands such as Lumity and The Nue Co are setting a great example by ensuring customers have a smooth, easy and enjoyable experience from start to finish. The goal is to make every interaction, from the first click to the final checkout, as simple and frictionless as possible while still being engaging and enjoyable. A seamless experience is a sign that the brand respects the customer’s time and values their convenience. If it’s easy and enjoyable to interact with your brand, customers will keep coming back not because of discounts, but simply because it’s a pleasure to do so.

Relying on your email being opened is not enough any more, particularly in light of developments such as the new Apple iOS 18.2 updates, which will make it easier than ever for the consumer to batch-delete anything they deem spam or irrelevant.

Rewards in the right places

Rewards still have their place, of course, but a level of expectation exists around this as an almost basic requirement now as opposed to a leading conversion message. To really make a difference, you need to offer unique perks that resonate with your audience, such as discounts, early access to products or exclusive content. These rewards should feel valuable and desirable, motivating customers to engage more deeply with the brand and feeling good about each experience – Pixi is a great example of this.

A new definition of value

Brands that understand the role of discounting within their wider customer value proposition will move beyond price wars and create real, lasting relationships with their customers. These are relationships built on emotional connection, trust, transparency and authentic engagement. Although true loyalty can start with a discount code, it is rarely maintained purely with this tactic – and once it’s lost, no amount of discounting will buy it back. True loyalty is earned through every interaction, every piece of content and every experience a customer has with your brand.

CHAT TO US

Contact Jemma Marchant, Deputy Managing Director
jemma.marchant@krowgroup.com

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