By Elitsa Konstantinova, Senior Director CX Strategy at Silverbullet
Have you been encouraged to sign up for a loyalty or rewards program lately? You’re not alone.
Many businesses across various industries are either launching or relaunching loyalty programs at an increasing pace. And it’s no wonder why. Verticals including Retail and CPG are facing relentless challenges, seeing their once sustained growth slow down drastically over the last decade.
Challenges such as macroeconomic slowdown, consumer fragmentation, escalating costs, and the impact of a pandemic have all contributed to this drastic shift in the relationship between brand and consumer.
It’s no wonder why loyalty programs are becoming crucial for brands looking to secure long-term consumer engagement and growth.
Doing More with Less = Spend More, More Often
Advancements in overarching customer experience (CX) strategies and technologies have transformed the way in which businesses can activate loyalty programs with more sophistication. And, the two key ingredients which are fuelling this innovation, are artificial intelligence (AI), and data-driven technologies.
While many businesses seek technology to empower them to deliver more with less, there’s clear contrast in what they expect from their consumers. Whether a brand is building from scratch, or evolving an existing model, there is a clear business strategic goal when rolling out a loyalty program: spend more, more often, across more categories.
In fact, research shows that 60% of consumers are likely to spend more on brands they’re subscribed to – a clear sign that loyalty programs are the way forward.
It’s pretty compelling for all B2C businesses: smart loyalty programs not only drive repeat purchases, but open up doors for cross-and-up selling by providing consumers more discovery channels to explore products and services to match their needs.
But, how can businesses evolve the perhaps stagnant loyalty programs of the past, and make them relevant for today’s customer?
Silverbullet believe there are three key success factors that build a customer loyalty program that works:
Personalisation
Value Exchange
Sustainability
Let’s explore each one now.
01: Are you truly able to offer personalized experiences?
Personalisation in 2024 doesn’t just mean having few ABC variants for different segments.
Today’s consumers expect truly individualized experiences—experiences that are tailored based on their unique attributes and behaviours. With advancements in AI and marketing technology, brands now have the tools to deliver dynamic, 1:1 personalized experiences at scale.
This level of hyper-personalization requires enriched consumer profiles, leveraging data from multiple sources, and building digital infrastructure that continuously learns from consumer interactions.
The result is a feedback loop that constantly enhances the consumer experience, deepening brand loyalty.
02: Have you built a program that diversifies value exchange and enables emotional connections to your brand?
While financial incentives are important—after all, 70% of consumers expect monetary rewards when joining a loyalty program —they aren’t enough on their own. Successful loyalty programs offer a diverse value exchange that allows consumers to connect with a brand on multiple levels, including emotional.
Brands can give consumers the flexibility to choose which rewards to unlock, offer personalized services, and provide unique experiences such as upgrades or exclusive content.
The goal is to create a program that evolves over time, keeping consumers engaged and loyal by offering a mix of familiar perks and fresh, exciting rewards.
Last but not least, it is critical to allow access to value early in the consumers’ journey and not over-complicate or postpone the moment of redemption too far (both as in steps required to unlock, but also actual $ spend to qualify).
03: Will you ensure sustainability isn’t just a tick-box exercise?
In today’s world, sustainability has become a major consideration for both consumers and brands. Customers expect the companies they support to demonstrate a commitment to sustainability and ethical practices .
“Customers increasingly prefer to do business with companies that can demonstrate their commitment to sustainability, and factoring this into CX will become a priority. In 2024 it will become more common to see companies giving information about their environmental footprint, and what they are doing to offset or mitigate damage, as part of the customer journey.” Bernard Marr, Forbes
For brands, this means that loyalty programs should not only offer transparency regarding their own sustainability efforts but also provide opportunities for consumers to contribute.
Programs can incorporate features like donations, tree-planting initiatives, or carbon-offsetting options, allowing customers to feel good about their purchases and reinforcing a long-term, trust-based relationship.
The Cherry on Top.
If all of these benefits surrounding loyalty programs isn;t enough to convince you, then let me leave you with one final thought.
By their very nature, loyalty program audiences are a brand’s best source of rich, consented data. Not only will this data power your loyalty programs moving forward, but provide invaluable insights for your wider business. Areas such as look-alike modelling and customer journey orchestration models will all be improved, due to the fact your loyal customers are generally willing to provide you with the permission to use their data for good.
As consumers crave experiences and emotional connections, the loyalty programs that stand out will be the ones that resonate with individuals on a personal level, creating a bond that keeps consumers going back.
So, the question I put to you is: Have you curated a loyalty program fit for today – and tomorrow’s customer? If the answer is no, I beg you to reconsider.
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