3 Tips to Advance Loyalty Programs
Every relationship starts with a great story. We all have a story of how we met someone we care about, how we got to know them, and built a relationship that was meaningful.
The same can, and should, apply to the relationship between brands and their customers as well. But the world has changed over the past few years. Many consumers have shifted toward convenience and price over loyalty to brands that may have been in their lives for years. During the pandemic, 80% to 90% of people changed what they bought, where they bought and how they bought. Between lack of access and supply chain challenges, it was impossible to remain loyal.
According to our 2023 Consumer Trends Index report, 33% of consumers have switched away from, or become less loyal to, a previously favored brand in the last year — a 6% increase since 2022. Despite these headwinds, research and loyalty program performance results consistently show that loyalty has a massive impact on customer behavior, spending, retention and satisfaction. In fact, loyalty programs are experiencing a surge in participation, with 76% of consumers stating that feeling appreciated by a brand keeps them engaged.
To successfully navigate this shift in consumer behavior, brands must embrace innovative strategies that align with the evolving needs and expectations of their digitally connected audience. It’s time to reimagine loyalty.
So, here are three best practices for reimagining loyalty programs in the digital age, focusing on key strategies with the potential to elevate customer engagement, satisfaction, and brand advocacy.
Data Enrichment through Interactive Experiences
The journey to reimagining a loyalty program begins with data enrichment. Beyond basic information, brands can leverage interactive experiences such as surveys, polls, giveaways, and games to gather nuanced insights into customer interests, preferences, and behaviors.
By embracing technology that facilitates these experiences, brands can create personalized campaigns, exclusive offers, and targeted content that resonate with individual audiences. We’ve found that consumers are willing to share valuable information for better service, with 74% open to sharing gender, 70% hobbies and 66% their birthday. Integrating interactive experiences into loyalty programs not only enriches customer data but also fosters a deeper understanding of individual preferences.
The implementation of such interactive elements goes beyond mere data collection, it represents a commitment to engaging customers on a personal level. For instance, the incorporation of surveys allows customers to provide direct feedback, helping brands tailor their offerings to match evolving preferences. The dynamic nature of interactive experiences ensures that customer profiles are not static but evolve over time, enabling brands to stay attuned to changing consumer expectations.
Dynamic Loyalty Points and Tier Structures
Traditional loyalty programs often follow a transaction-based model, where points are earned solely through purchases. To truly engage customers, brands must evolve beyond this linear approach. By adopting a flexible points engine and tier structure, brands can recognize and reward customers based on a holistic view of their activity history, including financial transactions, online browsing and survey participation.
What’s more, innovative loyalty programs extend beyond transactional behaviors, allowing customers to earn points through activities such as content engagement, social media interactions, reviews and feedback. This approach not only reinforces customer loyalty but also demonstrates a commitment to valuing customers beyond mere transactions.
The dynamic nature of these loyalty points and tier structures ensures that the program adapts to the evolving preferences and engagement levels of individual customers. It goes beyond a one size-fits-all approach, allowing brands to personalize rewards and recognition based on a comprehensive understanding of each customer's journey. A robust loyalty marketing solution offers a sophisticated rules engine that considers a customer's entire activity history, creating a tailored experience that resonates with each individual.
Personalization: The Heart of Modern Loyalty
Without the right technology to harness customer data, loyalty programs risk falling short of expectations. Personalization and contextual relevance are key, and advanced loyalty strategies enable brands to deliver highly personalized offers that align with individual preferences.
This can be achieved by triggering personalized offers at the right moment, mastering integrations with POS and eCommerce platforms, and infusing gamification into the loyalty experience. In essence, delivering a personalized and contextually relevant experience involves tailoring the entire customer journey, from the initial interaction to post-purchase engagement, based on individual preferences, behaviors and feedback.
With the right loyalty program technology in place, brands can put this information to work by creating highly personalized offers that meet customers where they are. Some examples of personalized offers include triggering discounts at the right moment, sending exclusive product recommendations based on expressed interests and purchase history, and utilizing dynamic and personalized content functionality to send campaigns to a group of the most loyal customers.
These tactics not only enhance the customer experience but also contribute to the overall success of the loyalty program. Mastering integrations with POS and eCommerce platforms allows brands to trigger actions based on various consumer behaviors, location and user history. Customers can also manage stored value and gift card balances in mobile wallets, adding an extra layer of convenience to the personalized experience.
Why Advanced Loyalty Wins
By incorporating advanced loyalty strategies, brands can engage customers beyond the transaction, provide personalized experiences, and incentivize participation and engagement with the brand.
These are the building blocks to fostering real connections with your customers to create brand advocates and cultivate authentic emotional loyalty, which is invaluable for your brand. With embracing advanced loyalty strategies, brands can thrive in an era where customer engagement transcends transactional boundaries.
Michele Fitzpatrick is an experienced CX consultant and CRM/Loyalty strategist who connects the dots for retail and consumer brands marketers to unleash the power of data, identity, analytics and marketing technology solutions to create customer insights, define audiences, enable compelling experiences and deliver business impact.
