Can you build emotional loyalty through digital experiences?

Our experiential and transactional interactions with brands and businesses exist primarily on our devices. So whereas emotional loyalty might have been built through interpersonal relationships in your community 20 years ago… emotional loyalty now needs to be built, maintained and developed at the intersection of design, data and devices.

Offering simple, useful and engaging digital experiences is merely the foundational cornerstone of brand engagement in 2024… as we progress towards 2030, customers are going to expect contextual, personalised and intelligent experiences. Especially as they will be getting them natively in their Google Pixels and Apple iPhones.

From transactional and experiential digital features such as personalised recommendations, redeeming points and earning statuses through to emotional features like gaining early access, competition entries and exclusive features.

Offering personalised and meaningful experiences will become increasingly important in the battle for the consumer’s hearts and minds. As we progress into the second half of the 2020s, unified omni-channel experiences will underpin the intelligent agents fostering brand loyalty.

What is emotional loyalty and why is it important?

Emotional loyalty refers to a customer’s deep-rooted connection with a brand, which makes them more likely to consolidate services, develop product loyalty, spend more and advocate for your brand to others in their professional, familial and friendship groups.

Studies show that emotionally loyal customers can be up to 30% more valuable to an organisation over time when compared to the average customer. Emotional loyalty differs from transactional loyalty in that it involves personal connection and brand attachment, while transactional loyalty might only be driven by simplicity, convenience or cost.

Think about the difference between how customers feel about Monzo versus Tesco Bank, the difference between Octopus and British Gas and the difference between Vitality and Aviva!

If you establish a baseline of activity that aims to build emotional loyalty through digital experiences, it can deliver tangible business value and prove it’s ROI in your NPS score, cross-product holding and more.

Digital experiences as a tool for loyalty

While the digitalisation of business interactions has reduced the likelihood of face-to-face engagement with customers across many verticals, it has opened up many new avenues for building emotional loyalty.

Digital features can excite customers and help brands balance cost centre savings with innovative loyalty experiences, which can trigger the right kind of consumer behaviours.

Intelligent digital experiences underpinned by digital data can deliver transactional, experiential, and emotional features that will significantly enhance brand advocacy, customer attachment and emotional loyalty.

To illustrate the difference between the three tranches of features:

• Transactional Features: Provide savings back to the user (e.g. redeeming points)

An example is The North Face, who provide you savings immediately on downloading the app – instant transactional reward. Then a simple system, where you earn 1 point for every £1 spent, which is transparent so the user understand the cost benefit and how to maximise their points to guarantee savings.

• Experiential Features: Give exclusive access (e.g. limited time, limited access deals)

The Barclays ‘Little Book of Wonders’ was a good example of an exclusive access model to develop emotional loyalty with a brand or business. It offered exclusively curated events, experiences and insights from Barclays web and mobile app which targeted a carefully selected group high net worth individuals, who were particularly important to their business.

• Emotional Features: Foster community and engagement (e.g. donating rewards to brand super fans who help other customers get the most from their interactions with your business)

A good example of an emotional feature is Monzo’s ‘Your year in Monzo‘ feature, which takes it cues from Spotify’s Wrapped.

By taking the customer’s data and playing it back to them in a fun and unique way, not only engages, but encourages the consumer to share, be amused and/or horrified by their spending!

The trick is in using the abundance of digital data available to businesses in the modern age to create new groupings of features based of contextual circumstances of personal behaviours and create the design challenges that will create a slew of ideas that will surprise and delight customers.

Emotional loyalty across different customer segments

The challenge with trying to build emotional loyalty is that it is a very bespoke, tailored discipline, it has intricacies by age, gender, socio-economic status and more… and is ultimately based on personal preference.

What works for a working mother of three in her 30’s will not work for a single, retired ex-army officer in his 70’s.

Let’s take a look at some key components of trying build emotional loyalty by customer segment:

• Age: Gen Z and Millennials value transparency and exclusivity, particularly through features like event invitations and rewards progress tracking. Whereas Gen X and Baby Boomers, on the other hand, value transactional clarity and the ability to redeem rewards simply
• Location: The priorities of people in large urban hubs are different to those rural areas or in small villages
• Socio-economic status: Lower-income customers may be more driven by gamification features (e.g. badges) compared to the middle-class, who focus more on points redemption and savings
• Regular visitor: Daily visitors may value personalised, gamified experiences, whilst weekly visitors may have focus more on transparency and exclusivity. Thinking about the engagement rate can influence the engagement tactics you employ
• LTV value: Whilst new members (0-1 year) are driven by ease of use and excitement, long-term customers (2+ years) may prioritise financial benefits and personalisation

Recommendations for emotional customer engagement

1. Excitement is a predictor for emotional loyalty: Excitement about rewards is the most consistent predictor of emotional loyalty. Brands should aim to operationalise excitement by considering different types (anticipatory, immersive, and outcome excitement) and how to integrate them into digital loyalty experiences
2. Transactional and experiential features are great, but they are foundational: These features are more effective in driving emotional loyalty than emotional features. Transactional features like simplicity of engagement, clarity of points redemption and experiential elements such as badges and status
3. Relevance is absolutely key, people want you to pre-empt their context: Personalisation of transactional actions, rewards and experiences to match customer preferences will help increase emotional loyalty. Knowing a customer’s past purchases and tailoring offers based on that information can help brands enhance loyalty
4. Omni-channel experiences really matter: Seamless integration of multiple digital and in-person experiences is crucial. Whether a customer interacts with a brand on phone, laptop, smart speaker, VA or in-store, the loyalty experience should be consistent and efficient

Our conclusion

What we have aimed to articulate in this article is that emotional loyalty, while less tangible than transactional loyalty, plays a vital role in customer retention and brand advocacy. And it is our firm belief that digital experiences will be central to the all ‘winning businesses’ of the next 10 years.

Intelligent, exciting, hyper-relevant and seamless digital experiences are critical for fostering emotional loyalty across various customer demographics and behavior patterns. If you have plans to create game-changing intelligent digital experiences, why not reach out to our team?!