Loyal customers generate more revenues for business and that is a proven fact. Customer preferences and behavior keep changing and that influences loyalty programs that will generate the desired results. What worked the last year may not work for this year or the next.
These loyalty program trends should let you craft strategies that deliver results.
Customer Data Collection
One can have generalized data to create a general strategy but, considering that customers expect personalized services, it is important to gather data that gives a lot of personal details. Loyalty programs for 2020 and thereafter will incorporate artificial intelligence and machine learning to gather specific data that will give insights on individual customers to help marketers craft personalized strategies.
Personalization is Important
A Salesforce survey finds that 59 percent of customers expect personalized attention. It is not surprising given that people are the target of unwanted and generalized e-mails, text messages, and irrelevant offers. Admittedly it is no easy task to track each customer and know their preferences but artificial intelligence does help loyalty programs improve the degree of personalization. This feature will be accentuated in this year’s loyalty programs by way of improved automation.
Businesses may find it convenient, cost-effective, and easy to stick with only one channel of communication but that carries the risk of customer disgruntlement. Older people may be comfortable with email or phone chats. The younger generation would rather text or chat. If you cannot meet them where they want then you lose points.
E-commerce Competition Boosts Loyalty Activities
Savvy customers know that you can buy virtually anything online, ranging from consumer products to industrial goods. Ecommerce is booming and its share of retail space will be about 15.5 percent and in B2B it will be 12.1 percent, according to Oberlo statistics. You cannot fight it. Join eCommerce and give customers another chance to stay loyal.
A consumer products company may deal with resellers who sell in retail stores as well as online so they are not directly involved but what they can do and are doing is to let customers know that their products are available online through their retailers on various e-commerce platforms. Enterprising manufacturers may start their online retail operations. E-commerce transactions happen on e-commerce enabled sites but the drivers may be rooted in sites like Instagram and Facebook, where businesses must maintain a recognizable presence for better connections with customers. It helps businesses to have their e-commerce site, promote retailers operating on other e-commerce platforms, and link everything together on social media. This could boost sales by as much as 300 percent or more.
Gamification is on the Rise
Gamification works. 40 percent of millennials like a loyalty program if it has gamification, according to a Forbes report. PostFunnel finds gamification in loyalty programs is welcome for over 40 percent of millennials. Gamification improves conversion rates by 50 percent. Gamification goes hand in hand with rewards.
Rewards to Increase
People like rewards in exchange for loyalty. They like things like travel vouchers, free tools as gifts, tech products, passes to movies or shows, and similar lifestyle products. The Incentive Research Foundation finds that 50 percent of participants in loyalty programs will earn a reward and businesses are likely to increase the budget to 43 percent. Technology investment in loyalty programs has risen by 43 percent.
You can expect digital marketers to come up with loyalty programs but what you need is AI-powered, data-driven loyalty programs to help you derive maximum benefits. For this, you will want a digital marketer with a tech underpinning to devise loyalty programs that deliver results in 2020 and in the time to come. But do you need to create a loyalty program if your business is doing well?
- Snake oil salesmen can charm you but statistics convince. Business2community statistics show that 55 percent of older millennials and 53 percent of younger millennials and 51 percent of Gen-Z will stick to a brand if they like it. However, the same source also finds that 73 percent of customers are now switching loyalties faster than before. This means there is no room for complacency.
- Loyalty programs are on the rise as businesses realize their worth. 77 percent of customers are part of a retail loyalty program according to Adobe. There are increases across the board in travel, hotel, and consumer goods.
- You cannot keep offering the same carrot all the time. If you think the points system is good enough, think again. Customers want different rewards to keep them loyal. 61 percent of customers find financial rewards a good enough incentive and 58 percent find customized programs more suited to them. Loyalty contributes to about 18 percent incremental growth per year.
- Loyalty has other benefits such as loyal customers recommending your products. Bond brand loyalty report shows 73 percent of members of one brand are likely to recommend it to others in their circle.
- Statista states that despite the recession the loyalty memberships in the states jumped from 3.3 million to 3.8 billion in 2 years between 2014 and 2016. Recession makes people more conscious about saving money. More than 60 percent of respondents stated they would like codes that lead to discounts at checkout.
- The B2B segment is latching on to loyalty programs with 70 percent of businesses stating they are implementing programs for personalized experiences.
- Hyken finds that 62 percent of customers still feel brands are not rewarding them enough.
One can go on and on with statistics but it shows the loyalty landscape is changing like quicksand and you need to be ahead of the trends to keep customers in your basket with the help of specialist loyalty program experts.
About the author:
Hardik Oza is a marketing practitioner with more than 9 years of experience. He helps companies to grow their businesses. He shares his thoughts on additional publications like SEMrush, Search Engine People, and Social Media Today, and a few more. Follow him on Twitter @Ozaemotion.