Loyalty programs have been a part of customer engagement and retention strategies of many businesses for decades. It’s no wonder since inciting and motivating existing clients is more cost-effective than acquiring new ones. Hence, organizations strive to maintain one or another loyalty scheme in place to stimulate revenue generation and business growth.
However, under statistical data, a common U.S. consumer is a member of nearly 17 reward programs but uses less than half of them. It means that buyer reward schemes that were winning years ago are not effective anymore.
To stay efficient, reward programs should transform and change their approaches over time. They should catch up with changing customer needs and behaviors and with consistently evolving business tendencies responding to those needs.
What is the future of consumer reward programs? In this article, we’ll look into the prospects of these programs taking into account what impacts loyalty today and what sets a tone for reward strategies.
What Defines Modern Loyalty Approaches?
Times change, the world changes, global business trends change, the way we live and work changes, and people change accordingly. One thing is stable, though. Business revenues are driven by customers. Hence, companies should strive to keep up with consumer personas’ transformations to retain their client pools.
Customer Loyalty Drivers
With easy access to global markets and nearly unlimited choice diversity, modern customers are highly demanding and even exacting. At the same time, they are more experienced, sophisticated, and conscious. So, the major factors driving user loyalty today are as follows:
- Consistent positive experiences: Clients are more likely to remain loyal to a brand if they consistently receive high-quality products and services, excellent customer support, and a positive overall experience;
- Personalization: Consumers appreciate individualized approaches tailored to their needs and preferences. This could include personalized recommendations, customized products or services, and targeted marketing messages;
- Convenience: Today, consumers value convenience more than ever before. They want to be able to easily find what they need, place orders quickly, and have their products or services delivered in a timely and efficient manner;
- Brand values and ethics: Customers are increasingly aware of the values and ethics of the brands they do business with. They prefer to stay with brands that align with their own values and beliefs;
- Rewards and incentives: Brand loyalty is stimulated with rewards and incentives. These could include discounts, freebies, or exclusive access to products or services.
Taking into account the above-mentioned loyalty drivers, future client reward schemes should be customer-centric. Reward models should target creating long-term consumer relations using a personalized approach and taking into account end-user interests and behaviors toward the brand.
The way customers purchase today has also changed a lot, which greatly impacts approaches to loyalty strategies and reward schemes. Thus, Ben Kinsey’s 2023 Customer Loyalty Engagement Index measuring about 1000 brands in 110 categories demonstrates a huge shift in consumer behavior patterns.
Thus, previously, consumers made purchases based on rather rational and materialistic values. Meanwhile, today, their purchasing decisions are rather emotional. People consider how well the product or service will match their expectations which further determines if they stand with the brand or not.
An emotional purchase trend pushes marketers to study user interests and values to better understand not only their direct needs but also the emotional component. This will help them come up with more customized reward schemes.
Digital is the name of the game for the modern world. The digital age brings innovation and advanced technology and establishes new rules for all spheres of daily living and business. Today, customers are more tech-savvy from the start, especially when it comes to younger generations like Millenials and Gen-Z.
Today, many younger buyers tend to make spontaneous purchase decisions, with no standard behavior patterns behind them. They prioritize convenience and immediate personal benefits that will be in line with their digital lives.
Digital-savvy buyers are rather motivated by exceptional digital experiences than other common incentives and rewards.
Taking into account a modern customer loyalty profile, there are three distinct trends that will outline future reward programs approaches and paradigms:
- White-Label Solutions,
- Virtual Assistants,
- Remote Work.
Let’s take a closer look at each of them.
Retaining customers gets harder, and creating a buyer reward plan from scratch is easier said than done. It takes quite a lot of time, money, and effort, not to mention the confusion and lack of ideas you might face on the way. Hence, many companies choose white-label loyalty programs today that are more cost-effective, simpler, and still efficient.
White-label solutions are schemes designed by one company (the provider) but are branded and marketed as the product of another company (the reseller). The reseller buys the right to use the loyalty program from the provider and customizes it to fit their brand.
The provider of the white-label program typically takes care of all the back-end operations, including program administration, customer service, and program management. This allows the reseller to focus on the program promotion and establish relationships with end users.
Benefits of White-Label Loyalty Programs
Businesses have a lot of ongoing and strategic tasks on their plates. Buyer reward plans are only a part of their marketing effort. Yet, it’s an important part, and it should be given due attention.
White-label loyalty solutions offer a whole bunch of benefits to marketers who seek to establish a consumer reward scheme in a fast and hassle-free manner.
- Customization: Programs can be customized to fit the branding and messaging of the reseller. It can be tailored to match the reseller's website and other marketing materials or even integrated into a custom-made mobile app, allowing for unique features and functionalities while keeping an eye on mobile app development cost.
- Time and cost savings: By using a white-label program, companies can save time and funds on development and maintenance costs.
- Proven effectiveness: White-label solutions are usually based on proven loyalty scheme models and best practices. This means that the program is already tried and tested and has a proven track record of success.
- Faster implementation: Offered ready-to-use, white-label solutions can be implemented more quickly than custom-built programs. This allows companies to introduce a reward plan to their buyers and reap the revenue benefits sooner.
- Scalability: White-label schemes can be scaled to accommodate growth and changing business needs. As the reseller's business grows, the loyalty program can be easily adapted to meet new requirements.
- Improved customer retention: With a buyer reward scheme in place, marketers can improve customer retention by providing rewards and incentives to induce them to purchase again. This will increase client engagement with loyalty programs and contribute to creating a more personalized consumer experience.
While effective, reasonably priced, time-saving, integrative, and customizable, white-label loyalty solutions give a reseller full control over the program’s branding and experience leveraging.
Since quality digital experience is among clients’ prime priorities today, virtual assistants can revolutionize the way loyalty plans work and engage with customers. It’s a win-win solution ensuring smooth brand interactions and positive experiences for end users and helping marketers develop a personalized approach to build long-term relations with customers.
Benefits of Virtual Assistants
Using digital technology, virtual assistants (VAs) are quite easy to apply and offer a wide reach. As such, they can enhance customer reward programs in many different ways.
- Personalization: Using data and machine learning algorithms, VAs provide personalized experiences to each buyer. This will enable marketers to tailor loyalty plans to individual consumer preferences and behaviors, potentially boosting engagement and dedication.
- Real-time interactions: VAs provide real-time interactions with end users, thus, increasing engagement and satisfaction. For example, VAs can offer targeted promotions or provide proactive customer support when consumers have questions or issues.
- Insights: VAs generate data that can be analyzed to gain insights into buyer behavior, interests, and preferences. This will be of great help for product development, marketing strategies, and other business decisions for marketers to build stronger relationships with their clients.
- Convenience: With VAs, consumers can conveniently interact with loyalty programs on their own conditions. They can communicate with VAs via preferred channels such as messaging apps, voice assistants, or chatbots. Besides, they can track their rewards, redeem rewards, and access support.
- Automation: By automating routine tasks such as tracking rewards points and reminding clients about rewards, VAs help reduce friction and hassle associated with loyalty.
Thanks to the well-balanced digital experiences VAs deliver to customers, they have the potential to become a game-changer for engagement programs. They’ll help marketers establish and maintain strong relationships with tech-savvy purchasers and drive long-term loyalty.
Remote work is a new reality for many people across the globe. The whole concept is obviously here to stay, and it changes not only the way we work and communicate with employers but also our everyday living and habitual routines as well.
Thus, remote work has a great impact on loyalty strategies and approaches applied today. When it comes to customer behavior, remote work:
- Reduces face-to-face communications with clients making reward plans built on in-person interactions less effective;
- Makes emphasis on digital channels for communications with consumers;
- Highlights the importance of quality customer service to build loyalty;
- Shifts shopping online.
Loyalty Strategies in a Remote Work Environment
To stay competitive and continue using loyalty plans as an effective tool for boosting revenue, companies should adapt those programs to a remote work environment. There are a few tips that will help marketers ensure their reward schemes keep engaging customers and driving sales.
- Digitalizing the program: Moving a loyalty program online can help keep it relevant and accessible in a digital environment. Marketers should consider developing a mobile app or a web-based platform that allows customers to easily access and participate in the program.
- Offering virtual rewards: In a remote work environment, buyers may be more interested in virtual rewards than physical ones. Digital rewards such as gift cards, exclusive discounts, or access to premium content might be a great solution.
- Personalizing the program: Working remotely, consumers may feel more isolated and disconnected from businesses. Adding tailored recommendations and promotions to a loyalty program can help build a stronger emotional connection with customers.
- Leveraging social media: Social media platforms can be a powerful tool for communications with end users and loyalty plans promotion. Social networks can be used for exclusive promotions, hosting virtual events, or sharing user-generated content.
- Providing excellent customer service: Remote interactions come with more questions and concerns from buyers about the loyalty program. So, a customer service team should be equipped to handle these inquiries promptly and effectively.
To Sum Up
Future loyalty programs should revolve around customers and take into account not only their needs but also their interests, preferences, aspirations, strivings, and expectations to build strong, trust-based, and emotion-driven relationships with clients that will last.
Companies should consistently track all those aspects to keep pace with fast-changing customer behaviors and come up with incentives and rewards that motivate end users and gain their loyalty.
Dmytro Sokhach is an entrepreneur and the 6-Figure Flipper Club member. Founded Admix Global (web agency) that builds websites, makes them profitable, and sells them as business.