As 2022 kicks off, marketers, loyalty teams, and supplier partners are diving into a new period of customer loyalty plans and projects. A new year always brings additional opportunities, but in the world of customer loyalty, it can be difficult for marketers to choose the best path forward.
Where are marketers' efforts best spent as brands continue to evolve their customer loyalty efforts? Should marketers focus on data? What about new technologies? What's the next "big thing" for customer loyalty?
Loyalty360 asked supplier members for their thoughts on the most effective customer loyalty drivers and what brands should focus on in 2022. From the numerous responses we received, it was clear that there is no "one-size-fits-all" response to this question – depending on the brand, industry, budget, organization's focus, and maturity of its customer loyalty efforts, the drivers and trends to focus on may vary.
However, Loyalty360 saw five trends that stood out from the rest:
1. Personalization
Perhaps one of the most crucial tools to developing true and impactful customer loyalty, personalization is necessary for most brands as customers are being hit with numerous communications through varied, assorted, and a growing number of channels and offers every day – and brands need to stand out from the crowd. Your customer wants to feel unique and sense that the brand “knows” them at some deeper level. When brands take the time to nurturer relationships with their customers via data and behavioral analytics, partake in 1:1 engagement, and genuinely value customer feedback, they reap the benefits and have a customer for life.
However, with technology companies such as Apple – and legislation focused on consumer security and privacy – marketers' lives aren't getting any easier with data and personalization. For this reason, customer loyalty strategies and the need for zero/first-party data will continue to be critical in 2022 and beyond.
The Lacek Group – Tess MacGibbon, Director, Thought Leadership & Health Care
"Personalization is no longer an experiment; it's a requirement for effective customer engagement. The ability to demonstrate relevancy is essential as customers seek personalized experiences that make them feel special when interacting with a brand. Most U.S. customers (68%) who belong to a loyalty program say getting special offers that aren't available to other customers is important to them. And 55% report that getting relevant messages, offers or promotions is a key reason to join a loyalty program."
ICF Next – Tom Madden, Senior Partner
"Personalized and timely offers that meet customers in the moment with a promotional or bonus opportunity that delivers extra value for a brand purchase or interaction. Demonstrate that the information observed, known, and provided from the customer is used ethically for their benefit."
Clutch – Kate Atty, Vice President of Marketing
"Using data to customize content and offers shows that the brand has an interest in serving each individual customer and adding value to them based on their unique needs."
Cheetah Digital – Nicholas Einstein, Product Marketing Manager
"Consumers are individuals, and brands who engage with their audiences as individuals through deep personalization across channels, online and offline, often engender deep customer loyalty. Much more than merely addressing users by name or recognizing status level, next-generation personalization requires a full 360 view of the customer with ready access to all key data sources and decisioning + machine learning to execute the right content to the right customer at the right moment. Making appropriate investments to integrate and act upon customer data to drive next-generation personalization often pays big dividends in the form of customer loyalty."
Brierley – Don Smith, Strategy and Chief Analytics Officer
"In a marketing landscape where spray-and-pray communications are common and where personalization often goes no further than using a correct salutation in an email, crafting messages that are tailored to the individual customer or program member can be challenging. But the brands who invest in pairing content with individual-level data attributes reap the benefits of their efforts. The brand that acknowledges a recent purchase with a 'thank you, here is a coupon to use on your next purchase' has less chance of making an enduring connection with the customer than the brand that responds with a 'thank you for purchasing our [specific product]; here are some tips we have compiled on how to use it and protect your investment.' CRM/Loyalty databases contain clear signals of customer preferences and need states, and brands that tailor content to those signals are fulfilling a contract with the consumer."
2. Attainability
In years past, many brands might think having a customer join their loyalty program was a "job well done;" today, they can't stop there. Part of keeping the customer engaged is through the use of relevant reward strategies. Still, some brands make the mistake of not offering relevant or attainable rewards, which leads to segments of customers tuning out and disengaging with the program and potentially the brand overall. To combat this, brands need to understand what benefits customers value while creating a program structure that allows customers to feel appreciated through achievable rewards.
"The average consumer is part of over a dozen loyalty programs but is active in less than half of those programs. Reward attainability and relevancy are critical to initially acquire new members into the program and keep them active long term. Brands can create relevancy by identifying consumer interests to develop catalog options and ensuring adequate attainable rewards for lower-earning members segments. For retail brands, these attainable rewards can be tied to in-store and online shopper experience, but for CPG brands that lack the direct consumer relationship, they need to rely on efficient digital assets, partner-supplied rewards, and chance-based redemption opportunities to create attainable catalog rewards."
Kobie Marketing – Rhonda Ekstrand, Manager of Strategic Consulting
"Rewards are a core pillar of any program and are typically where brands and consumers focus initially. The more attainable, valuable, and broad the rewards offering is, the more brands can personalize the core rewards experience and engender emotional loyalty."
"Rewards and tiers should encourage spend and visits but shouldn't be so high that they become de-motivational. Why is this a driver? Another primary driver not just for joining a program but being an active member of a program is achievable rewards. Customers are savvy – if they consider how often they typically spend with a brand and what that would earn them, yet the rewards and tiers feel too far from those spend levels, they won't join the program. Rewards and tiers should encourage customers to spend more and visit more. They should also reward and recognize your best customers, but not at such extremes that they become de-motivational."
3. Diversified Rewards
Rewards programs must capture the customer's interest, both before and after acquisition. This entails providing them a portfolio filled to the brim with exciting, dynamic, and vast rewards and offerings of their choosing that will keep them coming back for more from your brand, preventing the relationship between the brand and the member from growing stale.
Tenerity – Rachel Bicking, Chief Digital Officer
"A large catalog of benefits, offers, and incentives across multiple offer types including cashback, affiliate, voucher, gift card, travel, merchandise, and beyond. Every customer is different, and if you do not have something that appeals to the customer, it doesn't matter how great the marketing, tech, or CX is. Without a diverse range of rewards and benefits, brands will be unable to create hyper-relevant experiences which drive loyalty and brand enthusiasm. The success of these experiences is measured by the volume of transactions, diversity of shopping cart, and offer distribution."
Clutch – Kate Atty, Vice President of Marketing
"A static program, stale offers, or dated approach to engagement will erode loyalty. Brands must be able to change it up, often in a meaningful way, and adapt quickly especially with regard to consumer preferences for shopping behaviors and communication with brands."
Brierley – Don Smith, Strategy and Chief Analytics Officer
"Programs and marketing plans should continuously evolve the customer experience, offering customers myriad ways in which to enjoy the brand experience (e.g., games, challenges, sweepstakes, special recognition, event invitations, and surprises). 'Surprise and delight' moments can be particularly powerful – a simple, unexpected gift or exclusive can solidify a relationship with a consumer and be a turning point in the relationship. Static programs lose their cache quickly, while dynamic solutions find ways to inject vitality and intrigue into the mix; the latter are the victors in the quest for enduring customer loyalty."
Cheetah Digital – Nicholas Einstein, Product Marketing Manager
"Extraordinary programs, however, find ways to exceed customer expectations at critical moments. Surprise and delight rewards, recognition at key milestones, benefits to share with family, and other innovative tactics that go above and beyond the scope of what customers expect from a program can serve as differentiators that keep customers coming back for more."
4.Better User Experience
The greatest of rewards doesn't mean anything if the user experience is a challenging one. It's 2022, and customers expect a top-of-the-line, seamless, digital experience. By providing members with convenient, well-thought-out, and omnichannel user experiences, their loyalty towards their favorite brands should continue to grow. The challenge is the realization within the organization that customer loyalty should be top of mind and not placed on the “back burner.” Customer loyalty is at its best when the enhancements, focus, and commitment are interactive and measurable.
Tenerity – Rachel Bicking, Chief Digital Officer
"The underlying analytics that power both offer intelligence and customer intelligence to create a hyper-relevant onsite and omnichannel marketing experience which drives the conversion rate."
"Next, a highly engaging and gamified customer experience that generates delight and eliminates effort. This will ensure that customers keep coming back and continue to grow as measured by return sessions and RFM."
Kobie Marketing – Rhonda Ekstrand, Manager of Strategic Consulting
"Convenience gauges how easy your brand is to interact with. A poor consumer experience, especially for your high-value members, can negatively impact return visits, transaction size and even create moments of churn. Brands can deliver the loyalty customer experience (CX), including servicing, seamlessly across all channels and lifecycle stages to maximize the impact of this driver."
Clutch – Kate Atty, Vice President of Marketing
"Strong and thoughtfully orchestrated integrations result in seamless UX and simple, effortless interactions for the customer. The ability to create a unified user exp…" (quote ends there)
5.Gamification
Loyalty should be fun. Help members find delight and a worthwhile experience by gamifying your program – fill it with opportunities to play and win special offers. Creatively improving a loyalty program goes a long way and helps contribute to customer loyalty, making gamification a perfect candidate for those looking to innovate on their standard practices. Gamification, if effectively executed, should help counter some of the other lingering challenges such as privacy, technology changes, and rapid expansion of regulatory changes.
Tenerity – Rachel Bicking, Chief Digital Officer
"Lastly, to deliver successfully, brands need technology that enables them to automate and execute at scale at every touchpoint. Whether it's gamification, analyzing and applying insights to create compelling communication, or integrating and offering personalized rewards and experiences into the customer journey – automation introduces efficiencies that allow brands to apply an agile approach enabling them to quickly model, launch, and measure their loyalty marketing initiatives."
"Next, a highly engaging and gamified customer experience that generates delight and eliminates effort. This will ensure that customers keep coming back and continue to grow as measured by return sessions and RFM."
Brierley – Don Smith, Strategy and Chief Analytics Officer
"Programs and marketing plans should continuously evolve the customer experience, offering customers myriad ways in which to enjoy the brand experience (e.g., games, challenges, sweepstakes, special recognition, event invitations, and surprises)."
Clutch – Kate Atty, Vice President of Marketing
"A static program, stale offers, or dated approach to engagement will erode loyalty. Brands must be able to change it up, often in a meaningful way, and adapt quickly especially with regard to consumer preferences for shopping behaviors and communication with brands." (does not directly mention gamification, though the quote fits the idea of gamification – expanding beyond tradition)
The Lacek Group – Tess MacGibbon, Director, Thought Leadership & Health Care
"As customer preferences and market demands evolve, brands need to continuously infuse creativity and innovation into their program benefits, relevant content, and emerging technologies. Brands that invite their customers to help design future loyalty benefits will build trust while maintaining alignment to their preferences. Customer advocacy is shaped by how a brand continuously meets or exceeds their expectations. When brands fall short of expectations, 58% of consumers show little hesitation in severing their relationship with the brand."
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