Loyalty Marketing in a Post COVID-19 World: Insights From a Panel of Customer Loyalty Experts

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By: Wise Marketer Staff |

Posted on April 8, 2020

At what we hope is a mid-point in the COVID-19 crisis (fingers are tightly crossed), The Wise Marketer wanted to explore how customer loyalty will be impacted post-crisis when our lives return to a “new normal”. We like to take a collaborative approach to answering tough questions and always seek diversity among contributors. In this case, we are fortunate to have insights shared from three respected industry professionals, hailing respectively from the US, Spain, and Australia:

  • Cindy Faust, Chief Commercial Officer, Aimia
  • Charles Ehredt, CEO & Co-Founder Currency Alliance
  • Simon Rowles, Managing Director, Beyonde

Asking the right question is the starting point in arriving at the best answers. In this complicated time, we wanted to carefully frame our questions to our expert panel. We decided that asking the question "how will consumers change post crisis?" would be naive and limiting. Because the current health crisis is impacting each person at a fundamentally human level, we thought it better to ask, "how will people change post crisis?".

To be sure, the impact of the COVID-19 outbreak has already changed our daily lives in many ways. Most of this change is tied to the external restrictions placed on our lives as we are urged to practice social distancing, shelter in place, and learn to live and work under new circumstances, all with the shared objective of stemming the spread of the virus. When the virus subsides and daily routines become more familiar, we expect that two extremes in human behaviors are possible:

  1. People will desperately seek a return to life as they knew it before the crisis. Many people will exhibit "short memories" regarding habits and attitudes.
  2. We will see a step-change in our collective behaviors, e.g. becoming nations of germophobes, elevating the importance of products made in our respective home nations, and giving widespread attention to the sustainability of our planet.

As almost always is the case, the future reality will occur somewhere in between these two extremes.

To get a better read on how people will change and what may influence their outlook and behaviors, we asked our panel:

How will people change post-COVID-19 and what will be the impact on customer loyalty as a strategy and loyalty programs in particular?"

Will they be attracted to sustainability issues, become more nationalistic, and how will they relate differently to brands?”

Cindy Faust:

"More than ever, customers are looking for businesses that make a difference. Customers want to align with brands that are helping speed up the recovery and health of our communities and acknowledging that times are hard.

Many clients have asked us what they can be doing in the short term to continue relationship building with their customers during this critical time. Our advice is to get creative on how they leverage current core business assets and their loyalty program benefits.

We are absolutely in awe of brands that are creatively thinking how they can give back:

These are the positive, impactful actions we love to see from brands during a time of need."

Chuck Ehredt:

"I believe sustainability themes will increase in importance as the currency Covid-19 situation reconfirms how fragile human society is — and while previous crises (volcano ash clouds, tsunamis, financial crisis of 2008, SARs, etc.) affected huge numbers of people, the impact was largely regional. Covid-19 is affecting just about everyone."

Simon Rowles:

"Customer Experience will remain the leading strategy to grow companies as it has in the recent past. As marketers we’re on the front lines of any recovery as we encourage customers to start spending again and if we’re good at our jobs, they’ll start to spend with us more than with our competition.

Customer needs will change to include new themes related to both the economic downturn and a heightened appreciation of hygiene. But these will be additive to what they already want today and will be differently reflected in different customers."

“How will people’s relationship with the brands they frequent change?”

We cite a recent statement from Mark Cuban on the subject of Stakeholder Capitalism, “If you get branded as a company that acted in bad faith, laid off all your employees, or really cut back and you took a bonus or whatever, you’re going to get crushed and your brand is going to go straight into the toilet."

Cindy:

"The global coronavirus pandemic is affecting consumer behavior worldwide, which will have long-term implications for business. As customers shift their traditional shopping behaviors, many brands are wondering what the residual effects may be.

In the week ending March 22, online traffic in the supermarket segment increased by 161.4 percent compared to the reference period in January and February 2020. Online visits in the tourism sector decreased by 57.3 percent during the measured period.

With this shift to digital, brands can examine their customer experience by focusing on personalization and ease of purchase, which customers will expect more of than ever before. We suggest that brands use this time to recognize behavior patterns (and shifts) to truly understand who their customers are and what they need.

They may have found that their eCommerce experience isn’t what it should be or flexible pickup options not competitive — recognize this and look at opportunities to digitally transform. Use this time to really know and understand key customer segments and what the optimal journeys would be to help make their lives easier and keep them coming back to your brand.

We obviously don’t know the definitive end to the current crisis, but we do know that things will be different on the other side. We may be a little more empathetic, a bit more nostalgic, how we shop will change, and the things that we took for granted will be more appreciated. We’re hopeful that when customers return to stores, dine at a restaurant again with friends, and go on their next trip that brands, just like our communities, will see each other as people and not just transactions.  It’s time to make business personal… for real."

Chuck:

"In the context of loyalty, people will want to align with brands that align with a purpose — both in the context of society (saving the planet), as well as the lives of individuals (helping them achieve meaningful goals). This may lead to more concentrated spending on the brands that live up to customers’ expectations and less money spent on ‘stuff that glitters’. I do not believe we will see widespread adoption of buying primarily products that are home grown, as people won´t believe that reduces their risk to international problems or diseases.

I think Mark Cuban´s quote is relevant — but not because people will remember (or even know) which brands behaved badly in this crisis, but because their culture, attitude, and selfishness will continue to come through in their corporate behavior — and this will NOT resonate with a larger portion of customers. Brands like Network Solutions that have mercilessly marketed to their base, often with tricky promotions, will suffer because people will have become more skeptical."

Simon:

"I think the demand for less friction filled and more enjoyable customer experiences isn’t going to change and any transformation programs we had underway will still need to happen but happen faster.

The biggest changes for loyalty as a category will be down to bold moves made by brave program owners. Much of the Australian loyalty market is funded by bank credit card programs and large portion of that goes to airline frequent flyer points. Spending on credit card has slowed and flying has stopped.  There are opportunities to take territory and influence:

  • An Australian bank working with British loyalty Fintech Bink are positioned to take an unfair share of that credit card spending when it comes back through a far better loyalty experience.
  • Another is considering Canadian Fintech Flybits to turn their mobile banking app into a context aware concierge that will have higher cross sell rates. 
  • An airline working with British start-up Upgrade Pack will be the first to unbundle its frequent flyer program offering and appeal to more customers as they start flying again."

Now is the time to be considering new loyalty strategies that before may have seemed marginal. The payoff for winning now is an order of magnitude bigger.