Why Love Isn't Enough for Brands

Valentine’s Day. A time for love, loyalty, a vague sense of guilt, and a desperate hope that small gestures can inject a spark into a long term partnership.

Now now, I’m not talking about your significant other. I’m talking about brands.

Mid February is peak season for cringe-inducing emails from companies with whom you once did business, hoping to tie their wares into the day of love. But it’s no good trying to woo customers (or your other half) on one day of the year. Getting your customers to love you - and getting that to translate into sales - has never been harder.

We all know the high street is struggling - the widely loved John Lewis has seen sales slump by 99% - and the number of empty units continues to rise. But the challenges are there for all brands, not just retail.

The power of Amazon is deprioritising big name goods (and it’s even ventured into manufacturing its own, lightly branded products). According to Foresight Factory research, only 12% of people use brand names in their searches for food products on Amazon, and for home, clothing and healthcare, it’s just 3%.

Direct to consumer brands are increasing in popularity and ever more people are using subscription services for everyday goods. In short - the way we shop is changing. The most convenient option (convenience being one of the biggest drivers of loyalty) is often no longer the high street, big name, widely known brands. It’s time for everyone to up their game.

So let’s look at some new models of loyalty - the methods that are working for brands today:

1. Managed Scarcity

Limited editions, invitation-only access, exclusive partnerships with influencers and even the famous ‘middle aisle’ at Lidl. These are all ways of generating ‘managed scarcity,’ where customers have to get in quick, or miss out.

Whether you want the latest Nikes, that H&M designer partnership jacket, or a half price pressure washer - this strategy means you’re offering a unique and democratic value to your customers, open to anyone - if they’re dedicated enough to get in fast. This strategy, if handled well, and if the products offer genuine value, can also be a great one for creating buzz and positive PR.

2. Mass exclusivity

This sounds similar to managed scarcity, above - but in this case, you’re asking for one additional action on top of purchase. You need your customers to join a club.

This is, at its core, a form of data exchange, or loyalty scheme. However, here, members do more than just collect points. In fact, there may be no points on offer - it’s the membership alone that offers privileges and makes consumers feel special. The H&M Club, for example, offers privileges like free delivery and points-based rewards, to anyone who’s prepared to sign up, while every O2 contract holder has access to early-bird concert tickets and restaurant discount codes that make them feel just that little bit special.

3. Latchkey Loyalty

AKA loyalty for the fickle. ‘Latchkey loyalty,’ - another level up from the mass exclusivity of point two, asks customers to subscribe to something and offers benefits for doing so - but crucially, doesn’t tie them in.

Subscription models of this type now allow much greater flexibility, allowing customers to skip, cancel and amend their choices with far more freedom than previously. Though it might seem counterintuitive to offer customers an easy ‘out’; without it, today, many are unlikely to join at all. It’s crucial that loyalty feels like a choice for modern subscription models to work.

The question of how many consumers truly ‘love’ brands is one for another day (is love, convenience or nostalgia?) - but what brands really need is to find new ways to make their customers’ lives happier, easier, more exciting and surprising all year round. In the end, that’s what all good relationships are built on.

Niki Macartney is strategy director at Southpaw.