Got a loyalty program? Great. Chances are you’re seeing some incremental spend if you’re using the resulting data effectively.
But true brand loyalty cannot be earned by dolling out rewards or tier status alone. It takes more than that. It takes authenticity and a reciprocal loyalty to the people that support the brand—employees and customers alike.
TJX demonstrated the kind of authenticity that generates true brand loyalty when it announced that the company would continue to pay its employees in Puerto Rico, even while many of their stores remain closed.
A spokesperson for the company said, “We believe it is the right thing for us to do under these circumstances.”
Customers Expect You to “Do the Right Thing”
Philip Kotler explains that, while brands used to rely on positioning to get ahead, it’s just not enough in today’s competitive markets. Instead, consumers “…would like brands to show concern not just for profits but for the communities they serve, and the world we live in.” Kotler calls this brand activism.
Elsie Maio says this is an exponential shift for the identity of companies into something she calls SoulBranding℠ . A thought leader in this area for 20 years, she’s cited by Kotler in his new autobiography for her of work in social-values-based corporate transformation. She explains that it requires brands to embrace their heartfelt social role and look beyond financial gain and shareholder value. She agrees that consumers today are demanding that brands be “generous, generative citizens” that solve real world problems (pointing to companies like Patagonia and Unilever as examples).
By continuing to pay its Puerto Rico employees, TJX is looking beyond financial gain to care for its local community and solve a real world problem.
It Pays to Stand for Something
REI took a similar approach to caring for its community when it implemented OptOutside in 2015. The retailer explains, “We closed on one of the most popular shopping days of the year, paid our 12,000+ employees to spend time outside, and invited America to join us.” Paying employees and encouraging customers to spend time enjoying the outdoors—instead of shopping—was caring for the brand’s community. #OptOutside is just one of REI's many efforts driven by its mission of "inspiring, educating and outfitting for a lifetime of outdoor adventure and stewardship."
And it has been wildly successful. REI CEO Jerry Strizke says that more than 700 organizations and 8 million people have joined #OptOutside over the past two years. It will continue again for 2017, and REI will offer a new experiential search engine to help consumers find something to do outside this coming Black Friday.
As it turns out, standing for something bigger as a brand and “doing the right thing” ultimately helps the business to drive performance. Lars Rebien Sørensen, CEO of Novo Nordisk and named the world’s top-performing CEO by Harvard Business Review, explains in Kotler’s article: “Corporate social responsibility is nothing but maximizing the value of your company over a long period. In the long term, social and environmental issues become financial issues.”
Will TJX See More Loyalty?
A Facebook post from the father of Marshall’s employee in Puerto Rico has gone viral, already garnering 66k likes/reactions, 7.6k comments and 41k shares.
Click through to the original post to see Facebook's translation.
Anecdotally, I’ve lost count of the number of friends in my own Facebook feed talking about doing more shopping at TJ Maxx and Marshalls recently. But will the brand see an increase longer-term loyalty in exchange for the brand’s loyalty to its own community?
Maio weighed in on the issue via email and stressed that customer loyalty "...accrues with time and stakeholders’ consistent experience of the brand. If TJX wants to be perceived as caring and empowering to people, then it will deliver that experience in every single behavior. Not just customer-facing behaviors, and not leading with communications." She says this is a pivotal moment for TJX to either establish itself as an inspiring leader in the retail industry who consistently honors its role as a partner in the people’s wellbeing—or settle back as a self-interested party on the lookout for transaction value.
Maio also stated:
"I hope the CEO is alert to the exponential value of the occasion. If so, TJX will use this opportunity to step ahead of the pack and launch the company’s authentic transformation as an agent of people’s wellbeing."
I hope so, too.
We both agree that any hint of inauthenticity at this point would kill the deal. Showing loyalty to the brand's communities must be done as a reflection of the brand's authentic desire to do good—not as a publicity stunt. Keep doing good, over and over again, and customers will naturally be drawn to the company that's a "generous citizen."
Time to Define Your Brand’s Values—And Stand for Them
A customer loyalty program may help your business to generate incremental sales—but on its own, it is not likely to generate true loyalty to your brand. While customers may appreciate earning discounts, free items, prestige, etc. in the short term (and you can use their loyalty data for more effective, personalized marketing), this strategy alone will not create die-hard brand advocates in the long term.
The key is to authentically stand for something beyond financial gain—and provide your own loyalty to the communities your brand serves. Consistently, throughout the organization.
TJX could be on their way there.