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Loyalty Program Best Practices for Responding to the Coronavirus

The Coronavirus pandemic has created an unprecedented situation across all industries. Many companies are still trying to find their footing, while others have already started executing their contingency plans. What we can say for sure is that empathy has become the new norm in marketing. If you overlook this and try to be pushy, it could hurt your business. In order to help you respond to the situation caused by the Coronavirus, this article includes the useful CRM and loyalty program action plans.

What Impact Has COVID-19 Had?

Global lockdowns and social distancing have dealt a fatal blow to brick-and-mortar retail. On the other hand, eCommerce is experiencing a resurgence, with essential businesses seeing a sharp increase in demand.

So what’s the current reality?

  • Since people are now spending most of their time cooped up at home, ‘Home Hubs’ have become a thing. Consumers are making as many purchases as possible online in order to avoid human contact. But more time spent browsing also means more opportunities to send customers useful content, or catch their attention with a viral marketing campaign.
  • The change in shopping preferences has led to the phenomenon of ‘Crisis spend’. Essentials, like food and functional products, like hygiene supplies, are indeed the main focus at the moment. However, most people occasionally go out of their way to buy non-essential goods, such as cosmetics, art supplies, workout gear or games, to make themselves feel better.
  • Witnessing the hard times that others in their communities are going through has made people more socially aware. This heightened ‘Share & Care’ mentality means that people are more likely to make donations or volunteer. Brands that show their dedication to social causes often see increased empathy and a boost in buzz from customers.

Antavo hosted an hour-long webinar with Jörn Roegler, VP Strategy & Insights and Giulia Filoso, Loyalty Strategist, introducing the new customer reality in detail, as well as showcasing a versatile action plan to future-proof your business.

How Have Other Companies Reacted?

A major lesson learned from the 2007-2009 economic recession is that customer experience is what differentiates leaders from laggards. Brands that are quick to adapt to this new situation and get on customers’ good sides with new, disruptive approaches will be the ones to come out of COVID-19 relatively unscathed. 

Here are a few examples from companies that have managed to connect with customers during the health crisis:

1. Make Shopping Worthwhile For Customers

Being able to stand out from the competition is extremely important because customers have more time on their hands to search for the best deals. In this case, highlight the convenience of the shopping journey. Luxury fashion retailer LuisaViaRoma did so by extending returns from 30 days to 60, while DSW is providing free shipping on all orders.

Other than offering free shipping to everyone, DSW also introduced a generous return policy and curbside pick-up to cater to their audience.

Other than offering free shipping to everyone, DSW also introduced a generous return policy and curbside pick-up to cater to their audience.

2. Show Visible Efforts to Support Health Care

Luxury giant LVMH announced that it will dedicate its French production facilities to creating hand sanitizer gels, which are then distributed for free to hospitals and health authorities across France. Doing so keeps the production flow going for the company, while the charitable act has garnered positive word-of-mouth on the Internet.

3. Stay Close to Customers

UK beer company BrewDog has turned all of its bars into virtual pubs to keep their community close to the brand. Hosted on Zoom, patrons can join in, raise a glass and have a laugh online. Furthermore, participants can share a drink with the founders, watch homebrewing tutorials and play games.

BrewDog’s virtual pubs feature live music streams and cooking sessions as well, creating an authentic pub experience.

BrewDog’s virtual pubs feature live music streams and cooking sessions as well, creating an authentic pub experience.

4. Create Infotainment

Cosmetics brand e.l.f. leveraged infotainment and achieved virality by reaching out to customers on social media platforms. In brief, the brand published a remix of a trending song to TikTok, telling people about the importance of personal hygiene and self-distancing. In doing so, e.l.f. garnered plenty of new fans who will be sure to think of the brand when considering future cosmetics purchases.

5. Keep Customers & Employees Safe

Lastly, here’s a cautionary tale for what happens if you ignore the new customer reality and push sales too violently. US-based game reseller GameStop faced major backlash for not only keeping its stores open during the pandemic, but for failing to provide sufficient sanitizers, safety masks and gloves to employees, endangering the lives of workers and customers alike.

GameStop’s controversy ended up drawing the attention of the media and lawmakers as well, forcing the company to close all of its stores in the United States.

GameStop’s controversy ended up drawing the attention of the media and lawmakers as well, forcing the company to close all of its stores in the United States.

Keeping Newfound Customers as a Booming Business

Not every brand is suffering from a lack of customer interest, mind you. Some businesses are experiencing quite the opposite, with a sudden surge of orders from new shoppers. For them, the biggest challenge will be turning today’s customers into tomorrow’s brand lovers. 

  • As mentioned earlier, this is not the time to exploit the situation commercially. Try to serve, not to sell. Focus on long-term profit by keeping your prices affordable, while protecting your margins as much as possible.
  • Seize the opportunity to plan ahead. If you’re planning to launch a loyalty program in the future to better engage your new customers, the concept of that program requires weeks of brainstorming and preparation — actions you can start taking right now. 
  • Lastly, this is the perfect time to test: the unique nature of the current market allows you to experiment with new strategies and learn faster. For instance, you can test how your customer segments react to a new app, or to the introduction of an Uber-based home delivery service.
Starbucks used the situation as an opportunity to expand its delivery service, partnering with Uber Eats to deliver coffee in 49 cities in the US.

Starbucks used the situation as an opportunity to expand its delivery service, partnering with Uber Eats to deliver coffee in 49 cities in the US. 

Making the Most Out of Your Loyalty Program

Having a loyalty program while the Coronavirus is still active is a great advantage. A next-gen loyalty framework not only ensures that customers remain satisfied — without too many discounts — but also creates plenty of touchpoints to help your brand remain relevant. 

Here’s a three-step action plan to increase engagement:

  1. Avoid any friction. Shoppers have less patience than usual, and they might abandon your brand altogether after one poor experience. Show your generosity by extending points expiration and tier reset deadlines, so customers don’t get frustrated about losing their progress. Furthermore, lower redemption rates for rewards, so members are incentivized to use their available points.
  2. Improve your incentives and rewards. Make your loyalty program more fun and engaging by introducing new reward options, such as the ability to donate loyalty points to charity, or develop new brand engagement elements, such as Instagram contests
  3. Future-proof your program. Don’t forget about your long-standing members either. Give special rewards or perks to recurring spenders, and encourage them to interact with the loyalty program on additional channels as well. Also, introduce profiling quizzes to learn about their preferences to enhance the personalization.
Despite suffering as a hospitality brand, Hilton has donated one million hotel rooms to medical professionals on the front line, and postponed tier expiration for its loyalty program members.

Despite suffering as a hospitality brand, Hilton has donated one million hotel rooms to medical professionals on the front line, and postponed tier expiration for its loyalty program members.

Essential Steps If You Don’t Have a Loyalty Program

In case you’re facing Coronavirus challenges without a loyalty program, there are plenty of actions you can take to retain customer loyalty. For example, you can ask your marketing team or industry experts to generate helpful content, such as advice on how to make home life smoother or more exciting, beauty tips, fashion advice, guides on how to repair broken household items, etc. 

It’s also worth considering laying down the foundation for an upcoming loyalty initiative. Loyalty programs — and CRM in general — simply cannot work without customer data and segmentation. So run dedicated tests and surveys to learn more about your audience.

Sarah Flint encourages customers to spend their free time creatively by having their staff members share advice for doing interviews or painting with watercolors.

Sarah Flint encourages customers to spend their free time creatively by having their staff members share advice for doing interviews or painting with watercolors.

Be Ready and Think Ahead

We hope this article — and the corresponding webinar — has proven to be useful for you. There are more inspiring examples out there, but this is the point where you should start forging your own strategy to respond to the situation. And remember, the focus should be on empathy at the moment, so try to build bridges with customers by supporting them. 

If you have questions, or wish to further discuss the topic of loyalty programs and customer engagement, feel free to contact us directly.

Zsuzsa Kecsmar
Zsuzsa Kecsmar
Zsuzsa is CCO and Co-founder of Antavo, listed by Forbes as one of Europe’s top 100 female founders in tech. After acting as Antavo’s CMO for nearly a decade, she took over the role to help the company’s clients. She is also a former journalist and has been awarded by the European Commission.