May 4 2021

Here’s How to Revolutionize the Traditional Loyalty Program

Want to stay ahead of your competitors and continuously build customer loyalty?

Well, then you need to offer something of value — something in which consumers don’t get elsewhere, and loyalty programs are a great way to accomplish this. Often overlooked, loyalty programs are vital when aiming to build relationships with your customers.

While 90% of companies offer a loyalty program, these programs are not created equally. Today, the average consumer belongs to 14.8 loyalty programs, yet are only active in 6.7 of them — and while customers appreciate rewards, nearly 30% of consumers want rewards to be more interesting. In fact, research shows that 47% of Gen-Z would pay to upgrade their loyalty membership. Amazon Prime is the perfect example, as members shop twice as often and spend twice as much as non-Prime members.

It’s time to get creative and go beyond the “traditional” loyalty program. Here’s how.

Drive Customer Loyalty with Meaningful Customer Experiences

Customer experience and customer loyalty go hand-in-hand.

For decades, businesses have developed customer loyalty programs, but dated strategies are becoming increasingly less effective in terms of long-term loyalty. Consumers today are less concerned with run-of-the-mill loyalty rewards and are more focused on customer experience and consumer sentiment.

A Gallup survey found customers with emotional ties to brands spend 46% more and are 32% more likely to visit a store compared to brands that don’t leverage emotional bonds.

The goal is to encourage brand engagement, especially among loyal customers. Considering it costs approximately five times more to acquire a new customer than it does to keep a happy customer, building and maintaining brand loyalty should remain a top priority.

One way to do so is to leverage emerging technologies. According to Bond, 95% of members want to engage with brands through a mix of new, emerging, and growing tech. For example, 85% of members who redeemed with their mobile phone say that their experience was improved through the use of technology. The same is true for automatic, location-based offers. This method improved the experience for 83% of members who have tried this functionality.

Out with the Old and In with the New – The Power of Loyalty Engagement

Traditionally, companies most often built their loyalty programs based on a tiered system. Transactions fuel these loyalty programs. When a customer spends x-amount, they get x-number of points, working towards a certain loyalty status. Although these programs were (and continue to be) popular, they’re not as effective when targeting today’s consumers — especially Gen-Z.

Regardless of your industry, you need to create an emotional attachment with your consumers. By strengthening your relationship, you will drive long-term value. Customers who have an emotional connection to a brand have a 306% higher lifetime value. These customers stick around for an average of 5.1 years and 71% would recommend the brands they love to friends and family.

In order to achieve a more emotional connection, you need to reward consumers beyond transactions.

For starters, let’s focus on engagement.

“Engagement” has been a hot topic for some time now. By building an emotional connection between a customer and your brand, that customer is much more likely to remain more loyal and help promote your brand. For example, 77% of consumers say they favor brands that ask for and accept their feedback. The same research found that 68% of consumers favor brands that contact them with customer service notifications.

Recommended reading: How to Keep Loyalty Members Engaged

As a brand in the spotlight, you need to do more to engage your consumers. Simply sending them a one-time 15% coupon just doesn’t cut it anymore. Instead, you need to encourage your customers to engage with your brand, and when they do, reward them. For example, send a new member an incentive to sign in within the first 24 hours. Once they login, they’re more likely to take other action.

Consider an Omnichannel Loyalty Program

Depending on your business, it may also be beneficial to create an omnichannel loyalty program. For example, do you have an online website and a brick-and-mortar store — or an eCommerce store and native app? Focus on creating the smoothest experience possible and then build a loyalty program from there based on where your customers shop and browse the most.

  • Map out your data to see how you could improve your loyalty program.
  • Consider your latest offerings. Are you making it easy for customers to engage on all channels?
  • Understand your customer and what they enjoy most. How can you reward them based on how they spend their time?
  • Seek feedback, asking your customers what they care about most. This is an opportunity to build meaningful relationships.


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