How loyalty programs can create a brand community

Did you know that 66% of branded communities believe that the community had a remarkable impact on their ability to retain customers?

Research by Vanilla Forums found that building brand communities is a key way to retain loyal customers.

Online brand communities help companies keep track of consumers’ changing expectations. They also bring customers together, letting them interact with each other and the brand.

Retailers can foster customer loyalty by building brand communities, making customers feel galvanised by the lifestyle, values, benefits, and impact the brand represents.

Why are brand communities important for businesses?

You might be wondering exactly how brand community practices create value and what’s in it for you. The advantages of a brand community include:

How do loyalty schemes help in brand building?

You’re sold on all the benefits of a brand community, but building an effective one is easier said than done.

What are some of the ways you can build an effective brand community? And how do loyalty schemes help in brand building?

Brand communities can be seen as an area within loyalty. We already touched on that, but these communities can bring consumers together and extend the experience for loyal customers, creating a platform for engagement and interaction.

You can increase your influence among your customers by building a proper relationship with them. This path requires a long-term commitment, but it is worth it.

What makes customers loyal to a brand? It's all about trust, shared values, and tailored experiences. It’s easy to see how brand communities and loyalty programs can go hand in hand.

If you’re thinking of implementing a brand community strategy, here are some of the ways a loyalty program can help achieve your goals as a brand.

Gamification

Gamified loyalty programs are a great first solution. They can keep experience-driven customers engaged for a long time and build relationships.

Brands can design games or challenges that reward customers for interacting with them in unique ways.

These experiences encourage customers to interact more regularly and also give you the opportunity to gather valuable customer information.

It’s a great way to make loyalty more engaging and encourage recurring behaviours. And it also helps you target Millennials and Gen Z, who grew up using smart technology.

The global gamification market should reach $40 billion by 2024 due to the high demand for this kind of customer experience.

Incorporating gamification into customer engagement strategies results in 47% higher engagement and 22% higher loyalty for brands.

A great example of gamification is Nike's Nike+ Run Club loyalty program. The program rewards customers for tracking their running progress and achieving personal milestones.

Customers can then share their achievements with other members of the community, creating a sense of friendly competition and camaraderie.

Vip Tiers

Customers love to feel special, and they appreciate being part of a club. Adding a VIP option to your existing program gives them that opportunity.

A VIP group brings together your most loyal customers, offering them exclusive rewards, personalisation, special experiences, and early access.

It's reserved for your top-tier customers who want to stand out from the crowd and enjoy privileges others can't. This can create a sense of exclusivity and prestige among customers.

One of the best examples of this brand community strategy is Sephora's Beauty Insider loyalty program, which offers three tiers of membership with increasingly exclusive rewards and benefits.

The top-tier members have access to exclusive events, free shipping, and personalised makeovers, making them feel like part of an exclusive community.

Sephora’s Beauty Insider has created a devoted group of members that engage regularly with the brand and with each other.

Co-creation

Co-creation means involving customers in the creativity and development process of new products or services.

A co-creation approach has two main goals. On one hand, it aims to create better products by listening to customers and potential ones.

On the other hand, it increases customer loyalty by engaging with customers and making them feel part of the brand.

Brand communities can deliver value-creating activities by including the end users in the design and manufacturing processes. A brand can gain more insightful information and fosters a sense of community and collaboration.

Through co-creation programmes, brands can better understand their customers' preferences about products and their experiences with the brand.

When brands listen to their customers' needs and desires, customers perceive that they value them and care about them.

For example, the LEGO VIP loyalty program allows members to vote on new product designs and suggest ideas for new sets.

This co-creation approach helps to build a community of passionate LEGO fans who feel invested in the brand's success.

The LEGO Ideas community hub also includes its own dedicated blog, FAQ page, and links to customer service resources.

Advocacy

Loyalty programs can incentivise customers to become brand advocates, spreading the word about the brand and recruiting new members to the community.

Developing brand loyalty for your brand is one thing, but turning your loyal customers into brand advocates is another level of engagement.

Advocacy is more than customer satisfaction. When you establish an emotional connection with your customers, they become more involved with your brand.

In the process, you build your loyal customers and turn them into brand advocates.

Their support of your brand is then driven by the very personal, emotional connection they have built with your brand.

Brands can set up reward structures for their advocates. They can offer gifts, rewards and contests based on how many referrals they make or how many new customers they help bring in.

For example, the Dropbox Referral program rewards users who refer new customers with extra storage space.

By encouraging members to share the benefits of the service with their friends and family, Dropbox creates a community of passionate users who help to grow the brand.