Top 7 Customer Loyalty Trends to Look Out For

The developments occurring in the customer loyalty arena year-on-year are staggering.

With the emergence of things like mobile loyalty apps, highly sophisticated chatbots, gamified marketing techniques and an increasing level of personalisation integrated into the customer experience, trying to keep up with customer loyalty trends can be overwhelming.

At Stamp Me, we keep a watchful eye on what the industry is doing and where it’s going. We’ve put together this list of crucial customer loyalty trends to be aware of. A rewards program that lacks the following features is destined to leave customers dissatisfied and looking elsewhere.

Want to implement a digital loyalty app that connects you with your customers and drives repeat purchases? Sign up for Stamp Me’s 30-day free trial to see how it works before you commit!

1. Instant Everything

In an era where everything is accessible right at our fingertips, waiting time is no longer acceptable – this applies to food delivery, customer support services, and loyalty programs.

For people to be satisfied with your loyalty program in 2020, you better make sure it offers instant gratification for customers’ engagement. The best rewards programs out there at the moment offer “skip the queue” features and table service at businesses that are typically “order at the bar”.

Obviously, points should be accrued in real-time and rewards must be redeemable the moment a customer qualifies for them.

If customers are experiencing issues, or need to speak to customer support for whatever reason, the fact that it’s 4am is no excuse.

Chatbots have become increasingly popular in recent years, as it removes the need for sitting on hold with a phone to your ear for 20 minutes (or 4 hours). Chatbots allow instant messaging to discuss and resolve any issues customers might be experiencing.

Invesp found that a staggering two-thirds of consumers worldwide interacted with chatbots for their customer support needs last year.

While McDonald’s has always been at the forefront of finding new, innovative ways to make fast food more convenient and accessible, the mymaccas app demonstrates a whole new level of fast food on the go.

Customers can now order their food through the app before they’ve even arrived at the restaurant, pay for it through the app, and simply swing by to pick up their food without breaking pace (or coming to a complete stop, if they opt for drive through pick-up).

To read more about why this fast food restaurant is at top of the digital marketing game, have a look at our McDonald's case study.

If you feel like dining in but don’t like the length of the queue, many restaurant chains are offering table service when you order and pay through the app – stroll in, take a seat, eat some food and walk out without ever even coming close to the POS or taking your wallet out of your pocket.

2. Enhanced Omnichannel & Touchpoint Strategies

Have you ever been searching for something online (let’s say you typed in “brown leather jacket”) only to find that for the next month, your social media feeds are littered with ads for brown leather jackets?

Actually, let’s back up a bit –

A touchpoint is every instance that a business engages with a customer and "touches" them with their message.

If you drive past an IKEA billboard on your way to the grocery store, see an IKEA ad on TV while you’re cooking dinner later, and then notice ads for IKEA furniture when you’re browsing Facebook and Instagram in bed later, then you’ve experienced three touchpoints with IKEA today.

The more touch points a potential customer has with a brand, keeping them front-of-mind, the better.

Omnichannel marketing is an approach that provides customers with a completely seamless and integrated shopping experience from the first touchpoint to the last.

In regards to loyalty programs, an omnichannel approach would mean that a customer could be browsing products on their desktop computer, perhaps in the office during their break at work, and then open up that brand’s digital rewards app on the train ride home and find that the recommended products reflect what they were searching for on their work computer earlier.

Omnichannel strategies are an intelligent technology creating a seamless customer experience across all forms of your brand’s communication.

According to Aspect Software, businesses adopting omnichannel strategies are seeing 91% higher customer retention rates than businesses that fail to adopt these techniques...

Don’t be part of the 9%!

3.     Strategic Loyalty Program Partnerships

It appears that brands everywhere have clocked onto the many benefits of partnering up with other brands to share their customer base and offer a deeper customer experience.

When partnering up for a more sophisticated loyalty program experience, businesses can go about it one of two ways:

1. Choose a partner that offers a service intrinsically linked to the services you provide; such as a car hire company and a hotel chain, or airline, for example.

2. Choose a partner with a shared demographic of customers. A gaming developer might partner up with a business that sells home entertainment furniture and sound systems, for example.

The way that businesses in the travel industry go about their loyalty programs has completely changed in recent years.

J.D. Power System’s 2017 Hotel Loyalty Program Satisfaction Study found that third-party partnerships were one of the average hotel guest’s highest valued factors in a hotel chain’s loyalty program.

J.D. Power System Global Practice Lead, Rick Garlick, said that reward points which can only be redeemed for hotel stays, aren’t going to provide as much customer satisfaction as experiences like spa treatments, adventure sports, and other products and services travellers generally enjoy while on holiday.

“The more engagement you have in a program, the greater share of travellers’ wallets you will get,” he said. “Redeeming for nights versus retail or travel packages, options with variety will be the programs that represent a better value to customers, and they do drive better engagement.”

4.     Corporate Social Responsibility

Consumers, especially the younger generations, prefer to support brands that are donating to charities and contributing to good causes.

A 2015 study by public relations and societal impact influencer Cone Communications, revealed that 91% of millennials would switch to a brand that is dedicated to a cause.

Data and measurement firm Nielsen, conducted a similar study that same year which found a third of global consumers are willing to pay more for sustainable brands. This proportion was even higher among millennials, at 73%. The fact that the stats were at only 50% a year prior would indicate that the emphasis on good corporate citizenship is rapidly rising.

A customer is more likely to continue shopping with you over your competitors if they feel that their purchases are helping to make a difference.

Chipotle Mexican Grill proved this in 2015 when it refused to sell pork (something of a staple at Chipotle) for six months due to inhumane practises in the meat industry.

The spike in customer retention could be attributed to the fact that the food chain “put its money where its mouth is” in regards to Chipotle’s Food with Integrity campaign.

Read all about how corporate social responsibility impacts loyalty programs.

5.     Tiered Programs & Paid Memberships

According to Loyalty360, if a customer already belongs to a company’s free loyalty program, there’s a 73% chance they’ll be willing to invest in that brand’s paid loyalty program.

The same study found that while 9% of consumers claim that absolutely nothing would motivate them to join a paid loyalty program, the vast majority of respondents (84%) would actually refer friends and family to a brand if they are noticing valuable benefits from their paid loyalty program membership.

The take-away here is that businesses shouldn’t be afraid to charge a premium for a higher-tier loyalty program. As long as the rewards reflect the investment, of course.

Find a balance between an enticing free loyalty program (so as to not alienate your existing loyal customers), and an even more enticing rewards program that offers extra perks for a small fee.

What kind of perks? Some benefits which have proven to be effective for brands like Sephora and Lululemon are:

- free shipping

- exclusive access to special events

- early access to sales and new products/services

These kinds of perks don’t actually cost the brand anything at all, but are extremely effective in motivating various levels of customer loyalty. Everyone wants to feel like a VIP - and depending on the person, many are happy to pay for it.

Members of both the free and the paid loyalty program are still enjoying the same discounts, rewards and using the same system for accumulating points; the VIP members just get a few extra perks.

6.     Increased Personalization

Remember what I said earlier about the brown leather jacket?

As the touchpoints between a brand and its customers evolve into the digital age, the algorithms for capturing customer data and using it to its greatest potential grow increasingly advanced.

Companies are investing heavily in using customer data to determine what each individual customer wants, what they like, what they might consider buying as an addition to their original purchase, and so on.

This no longer stems purely from a customer’s previous transactions (although that is a huge part of it; and loyalty programs are indispensable for a brand in that regard). A brand will now recommend products to you based on what items you’ve been browsing online.

The closer the engagement between a brand and customer via rewards programs, the more personalised each customer’s experience becomes – and as it turns out, consumers crave a unique customer experience.

Bond Brand Loyalty revealed that when a brand executes personalisation properly, customer satisfaction with the program increases a staggering 640%. And yet, only a fifth of consumers are satisfied with the current level of personalisation they’re getting from the loyalty programs they’re engaged in.

7. Generational Differences

When it comes to judging the quality of a loyalty program, different generations tend to prioritise different factors.

For example, the main incentive for consumers of Generation X to join a loyalty program is to save money. 

Generally speaking, Gen X’ers are currently at the height of their earning capacity, and tend to be quite busy people, therefore expect quick and convenient solutions.

A brand’s best chance at acquiring loyal Gen X customers is to make the signup process as quick and painless as possible. They must then continue to offer a fast and convenient system throughout the accruing and redeeming stages of the program.

Millennials, on the other hand, are more interested in a personalized shopping experience – they want brands to use their data to tailor offers to suit their specific needs. 

As millennials’ spending power continues to engulf a larger share of the global market (now in excess of $600 billion in the US alone), it’s more important than ever before to listen to what this generation wants and expects from loyalty programs.

Whether we’re talking about Baby Boomers, Millennials or the newcomers to the market, Gen Z, they all share a common desire for a highly convenient rewards program that’s remarkably easy to use and engage.

This means the loyalty program must be simple-to-use, clear to understand and easy to join.

In this day and age, it's also crucial for there to be a digital aspect.

While big names like Starbucks and Dominos were among the first to secure themselves a cosy spot in the “Food & Beverage” folder of people’s smartphones, any business of any shape and size has access to mobile loyalty app solutions these days.

For example, the Stamp Me Loyalty App offers convenient a digital loyalty solution to businesses all over the world.

It works as a 'pay-as-you-go' subscription basis, where merchants can easily set up and manage a digital stamp card loyalty program.

This means that small businesses don't need to have a large budget in order to operate a digital loyalty program, as they used to.

So, does it sound like your loyalty program might need a refresh?

It's important that businesses of all sizes, from small cafes to large enterprises, ensure their loyalty and rewards programs keep up with these customer loyalty trends.

If you think your loyalty program could do with an update, we'd love to help. Contact us today.