How brands are experimenting with newer ways to customer loyalty?

According to a finding by comScore, smart speakers recommend a brand other than the one consumers are trying to order through the device.
How brands are experimenting with newer ways to customer loyalty?

Customers seek delightful experiences from brands today. They want to feel recognized and valued, which a traditional loyalty program based around promotions, monetary rewards, and savings cannot achieve. This calls for brands to start thinking about loyalty in the context of changing expectations of the consumers today and broaden the definition to include experience driven approach. Brands that capitalize on customer relationship and build behavioral and emotional experiences earn customer loyalty for life

What’s threatening brand loyalty?

Multiple factors such as entry of niche small CPG players, more retailers launching private label brands and convenience and speed delivered by digital has resulted in decreasing customer loyalty towards big and established CPG players.Through Alexa and Google Home, for example,more and more people will see doing voice shopping in the time to come,posing threat to brand loyalty. According to a finding by comScore, smart speakers recommend a brand other than the one consumersare trying to order through the device. It also found that 42% of the time consumers ask for a category item (like “detergent”) than a brand (like “Tide”). Similarly, niche players are eroding market share of big CPG giants through their unique, personalized and targeted offerings and reach. king Loyalty Programs on another Level

Loyalty programs increase customer lifetime value. However, according to a research by Deloitte, less than half of consumers in the North America are satisfied with their loyalty program experiences in the CPG industry. This is because they need more than just rewards to keep them coming back to the brand. Compelling emotion-led experiences that are “new” and “unique” would help win over the lost customer loyalty.

Incorporate the following key elements to create next generation of loyalty programs

  • Exclusivity:It isimportant to make consumers feel special and recognizedfor their love to the brand. Show them you value your loyal customers by offering them exclusive deals, promotions and benefits not meant for customers at large. Benefits such as same day delivery, priority delivery and first hand deals before theybecome available to other customers are some examples to achieve this. Amazon Prime is one best-in-class example that works on this principle
  • Personalization. Personalization is at the core of a modern loyalty program. Learn on customer data to create individualized experiences. This includes leveraging predictive behavior modeling to offer personalized promotions and tailored pricing for your loyalty program customers.For example, with goals to increase customer loyalty and sell wine more closely aligned with individual customer preferences, developed a campaign to deliver highly personalized wine recommendations via email. The business impact included a 40% conversion rate
  • Emotional Reward Program: Consumers prefer to shop with brands that care. Allow shoppers to engage with the specific causes they care about most through your rewards program. ‘Worth It Rewards’ loyalty program by L'Oréal provides customers with philanthropic opportunities to donate rewards points to the charities of the brand's Women of Worth honorees. Other example is Kellogg’s Family Rewards that encourages members to ‘gift’ their rewards to schools or charities
  • Simplicity, Flexibility and Reduced Friction: Avoid unnecessary complexities. Make loyalty programs flexible that allow users to earn and redeem points in multiple ways. Rewarding non-transactional behavioris one option. One can also let consumers earn pointsoutside of the concrete shopping process. For example, in the athletic supplies or sports apparel industries, brand could reward customers for participating in athletic competitions i.e. “Run 5 kilometers and earn 200 bonus points!” In short, try to fit into their customers’ everyday lives
  • Digital Platform:Use technology to make experience more relevant and seamless. This includes elements like integration with mobile payment solutions, rewards for sharing products on social media platform, store-specific loyalty program mobile apps and integration with third party apps.
  • Create opportunities to collect customer data: The power of loyalty programs lies in the data they generate. Explore newer ways to collect this data – may be through collaborating with the retailers or connecting to the customers directly. For example, ‘Worth It Rewards’ loyalty program by L'Oréal let members upload receipts from retailers to earn points, giving the brand a more accurate picture of which customers tend to buy what

Revisiting your Loyalty Program– A To-Do Checklist



Emotional Connect


Simple &Flexible


  • Special discounts
  • Early bird access to new products
  • Exclusive events, webinars, meetups
  • Exclusive savings to members (Delivery Benefit such as two-hour delivery)
  • Social status through exclusive clubs
  • exclusive content, latest news etc. to loyal shoppers
  • Rewards from referrals
  • Fit into the customers’ everyday lives – earn & redeem rewards outside of the concrete shopping process
  • Experiential rewards
  • Connect with a social cause
  • Rewarding non-transactional behavior (gamification, attending events)
  • Personalized discounts, promotions, recommendations
  • Tailored pricing
  • Offer different kinds of membership depending on needs (infrequent buyers, those not wanting to commit, etc.)
  • Variety of points earn and redeem opportunities (earn points on profile completion etc.)
  • Multiple channels to earn points (in-store, online or mobile
  • Ability to choose among several types of rewards
  • Reward redemption should be easy and understandable.
  • Giverealistic and accessible benchmarks


Make experience more relevant and unique

The loyalty program should be equally as omni-channel as the brand itself. This includes

  • Mobile Payment integration
  • Earning rewards/ points for social media shares
  • Social media app: Integrating the program into your existing app or building a special one dedicated to the loyalty program
  • In-store mobile appintegration with loyalty program
  • Creating an online community for loyal members to give them a platform
  • Leveraging smart devices like wearables, AI powered products etc.


Explore more ways to collect and use data

  • Use loyalty programs to partner with retailers and third parties for data
  • Reaching customers directly through online channels for first hand customer information
  • Using this for data driven personalization
  • This means investing heavily in analytics. Use AI to automate & enhance personalization programs


Strategies for successcall for a loyalty program that goes beyond the face value and capitalizes on member relationships, building both behavioral and emotional loyalty.Back this relationship with the power of data and technology to make it more flexible, personal and rewarding to your customers

The article has been penned down by Priya Srivastava, Manager-Business Consulting, Sapient Razorfish. 

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