Our Top 7 Loyalty Program Tips

What’s fascinating about “the new status quo” for brand loyalty and customer retention, is that COVID-19 hasn’t really changed customers’ expectations of loyalty programs – it has merely accelerated trends that were already there.

For instance, the customer experience was already well on its way to surpassing price and product as the key brand differentiator before March 2020.

Now, good CX strategies can potentially double a business’s revenue within three years. Why? Because 86% of customers are willing to pay a premium for an exceptional customer experience.

So, in addition to improving the overall customer experience, let’s explore some other loyalty program tips.

1. Change the way you measure success

As loyalty programs continue to shift towards becoming more about engagement and less about transactions, it becomes infeasible to measure your loyalty program’s ROI in units sold, revenue generated and so on.

Instead, you must look at what people are saying about your brand online, what kind of reviews customers are leaving, and what customer lifetime value your average loyalty program member holds.

If ecommerce sales have skyrocketed but your brick-and-mortar store sales are zero because they’ve been closed all year; how do you measure your business’s performance?

Measuring sales on a “per customer” basis will provide you with a more accurate snapshot of how your business is performing. The same data that allows you to personalize each customer’s experience with your brand can also be used to assess each customer’s value to your business.

2. Provide customers with an omnichannel loyalty program experience

While omnichannel marketing and customer service initiatives are nothing new; the vast majority of businesses are still failing to extend these omnichannel techniques into their loyalty programs.

By that I mean, an all-encompassing loyalty experience with various touchpoints spanning customers’ social media, email inboxes, and digital loyalty app that sends texts and push notifications with exclusive offers at strategic times, or when the customer comes within six blocks of the physical shop, for example.

While many brands like Starbucks and Sephora have been continuously revolutionizing their loyalty programs for years; until recently, the average consumer’s idea of a “loyalty program” still consisted of receiving rewards for giving a business repeat transactions. That has completely changed now.

Customers expect the brands they shop with to offer omnichannel loyalty experiences which reward them for a variety of behaviours, including social media engagement, referrals and UGC (user-generated content).

Many businesses had no choice but to convert their brick-and-mortar loyalty programs into ecommerce loyalty programs in 2020 and 2021. However, going forward into the next couple of years, brands need to up the ante and offer their loyalty programs via multiple channels, and reward customers for various behaviours… not just spending.

3. Surprise and delight your customers with experiential rewards

As I mentioned at the beginning, customer experience outshines everything else. From greater social media engagement to innovative solutions regarding contactless payments and home delivery; customers are willing to pay more for a better shopping experience.

If you can add a cherry to the cake by building incremental rewards into your loyalty program unbeknownst to the customer, you can ensure your loyalty program is constantly working to surprise and delight customers.

By making these rewards experiential, you’re likely to convert your loyalty program members into brand ambassadors.

Some good experiential rewards include:

• A cosmetics brand might offer a one-on-one makeup tutorial or consultation
• Luxury department stores will often invite rewards members to exclusive pre-sale events and product launches
• Nike+ has been known to surprise customers with celebrity meet and greets, as well as innovative athletic-related experiential rewards

Whatever you do; don’t surprise your customers for the wrong reasons! As an example, the travel and tourism industry has had some tough decisions to make in the last few years, in regards to their loyal customers and rewards programs.

Inevitably, thousands of anxious VIP members have been enquiring about what would happen to all those hard-earned air-miles, hotel points, and elite rental car status.

Some hotels, airlines and rental car companies have gone above and beyond to provide their customers with peace of mind that their points are extended, fees waived and elite status renewed for 2022 or even 2023 – basically acting as though 2021 didn’t happen.

On the other hand, some of the world’s leading airlines and hotel chains went the other way completely; implementing new policies that were clearly designed to maximize customer spending and benefit the business, rather than its VIP members.

Of course, no one is questioning the hardship being experienced by businesses in the travel and tourism industry right now… but what’s that old saying about catching more flies with honey?

4. Simplicity through personalization

Any loyalty marketer worth their salt will already be well-versed in simplicity and personalization; but have you considered the power of combining these two initiatives?Given that the last three years have been particularly stressful, complicated and filled to the brim with misinformation; consumers don’t want their shopping to be a convoluted experience.

Less is more, and one of the most effective ways to simplify a customer’s experience is to find what they want for them, so they don’t even need to go looking for it. If a customer adds goggles and a pair of swimming trunks to their basket, what do you think is next on the list? A towel? Swimming cap? A waterproof gym bag?

Recommend these products, and streamline the customer’s shopping experience with your brand.

With a well-structured loyalty platform, you can use data from the customers’ past transactions, previously viewed products and other indicators to determine what the customer likes, what they want, what they don’t want and so on.

Considering that 49% of consumers claim to have made impulse purchases while enjoying a personalized experience, it would appear that simplicity and personalization make a winning combination.

5. Go mobile

The increasing dominance of mobile shopping has rapidly accelerated, making it an essential component of any decent loyalty program in 2023. In fact, a staggering 52% of all internet traffic now takes place on mobile devices.

A quality digital loyalty app provides your customers with a convenient and optimized medium for engaging your brand anytime, anywhere, right from their pocket.

Not only that, but it provides your business with the opportunity to surprise and delight customers with highly targeted communications whenever you see fit. For instance: to boost a slow day, or draw attention to a sale, or to place your brand front of mind when customers are nearby.

Mobile loyalty doesn’t just make all of these loyalty program tips possible – it allows your brand to take these initiatives to dizzying new heights. A loyalty app makes personalization, simplicity, omnichannel engagement and enhanced CX a breeze.

6. Contactless is king

Contactless loyalty involves establishing an emotional connection between your brand and its customers, without physical interactions, touch screens, cash payments, paper receipts and the like.

Recent research indicates that despite social distancing measures, the vast majority of people would still rather shop in-store than online, so long as it’s an entirely contactless experience.

The evidence suggests that it’s not all about going hard on the ecommerce transition – clearly the brick-and-mortar experience still matters, especially after a couple of years of sitting at home. So how do you provide customers with an in-store, contactless loyalty experience?

7. The role of CSR in loyalty programs

Good corporate citizenship is another example of a loyalty trend that was already gaining traction pre-COVID, but which has exploded in prevalence this year.

According to Capgemini’s report, consumers are far more eager to give their business to ethically- and sustainably-minded brands than ever before. Thankfully, your loyalty program is the ideal channel for demonstrating your brand’s commitment to good CSR.

Through its Soles4Souls and Be Strong programs, DSW gives its VIP members the option to donate shoes and/or loyalty points to the less fortunate. This is an outstanding example of a business incorporating its societal values into the very fabric of its brand messaging.

A final loyalty program tip for 2023

Of course, there are countless other loyalty trends that are sure to continue ticking upwards, such as strategic loyalty program partnerships and increased emphasis on CSR.

Keep a finger on the pulse, and don’t cling onto aged data and insights.

Just to clarify – any pre-COVID data is aged. What was true of consumer behaviour in 2019 is no longer the case, so chuck it all out and start fresh.

Consider the next few years to be a clean slate for all your loyalty marketing strategies, and an opportunity to completely redesign your rewards program from the ground up... to be more engaging than ever before!