Loyalty Strategy

4 Global Predictions for Loyalty Marketing in 2021

Photo by Guillaume de Germain on Unsplash

In our effort to gather a global perspective on what the year 2021 holds for Loyalty Marketing, we engaged five colleagues from The Customer Strategy Network (CSN) whose members provide expert, independent advice, spanning all aspects of consumer loyalty gained from practical experience working with leading brands and technology vendors across the globe. Each of the contributors is also a Certified Loyalty Marketing Professional™ (CLMP).

CSN believes that in today’s globalized and digital world, a deep understanding of customer management techniques developed across multiple loyalty program types, technologies, and territories is now a prerequisite to commercial success.

Here’re four predictions from this cadre of global experts that were shared with The Wise Marketer about the future of Loyalty Marketing in 2021.

Richard Dutton, CLMP, Managing Director of The Elias Partnership (UK):

  • Data Security Concerns will draw the attention of the C-Suite

The loyalty sector will not be exempt from the fallout from the SolarWinds and FireEye hack. The unprecedented nature of the SolarWinds hack will ensure there is increased scrutiny by major brands and loyalty program owner/operators of their digital supply chain and their cyber security status.

We have seen evidence in our recent research into household brand names of highly vulnerable Internet facing properties. A similar picture is emerging in our reviews of loyalty platform providers. The threat landscape is increasing and a major breach inevitable in 2021.

Closely related, attention to Privacy and Data rights will move front and center for consumers. Apple’s pivot to privacy — manifested most recently by their privacy nutrition labels — will stir consumers around the world.

Brands that build a path to privacy into their loyalty programs will flourish. Those that don’t face an existential threat.

Paula Thomas, CLMP, Host of Let’s Talk Loyalty Podcast (UAE):

  • Loyalty Programs Launch More Media Solutions

Loyalty programs will find new ways to leverage their data and drive advertising revenue. Inspired by the giants of digital media, Google, Facebook and Amazon, loyalty program owners will realize the media value of the relationships and attention they nurture.

Following the launch of media businesses by major US retail brands such as Walgreens Advertising Group, loyalty program owners with comprehensive consumer permission will increasingly leverage that first party data and offer powerful third-party marketing solutions.

  • Loyalty Programs and New Channels

Loyalty program operators will continue to develop new channels to connect with customers, led by WhatsApp and Facebook Messenger as well as voice assistants, mainly at home. Innovative programs will increasingly leverage the power of both voice and messenger channels to support their customers beyond simple customer service to include detailed transactional information and loyalty account enquiries and data management, eventually over time supporting extensive loyalty program needs such as redemption functionality.

  • Loyalty Professionals Leading CX Initiatives

Loyalty professionals will be increasingly called on to create extraordinary customer experiences with loyalty programs seen as just one tool that can drive true customer connections. With their experience, training, and passion to delight their customers, many will upskill even further and be the natural leaders of CX initiatives at senior or C-Suite level.

  • Paid Loyalty Will Continue to Explode

As foreseen by the 2018 Delphi Report, the success of Panera Bread and subscription-based meal kit companies in the US, followed by increasing adoption by retailers such as Pret a Manger in the UK, will lead many other sectors to launch subscription-based loyalty. The success of global retailers such as Circle K with their car wash subscription success, as well as premium tiers launched by Alibaba for their VIP program in China, will transform relationships with consumers engaging more strongly in fewer and fewer programs. 

  • Payment Linked Loyalty and Digital Receipts Will Continue to Grow

As consumers continue to place extraordinary value on simplicity, platform enhancements such payment-linked loyalty and digital receipts will truly delight customers in more and more countries and ensure deeper loyalty for brands who invest in these customer-centric features. Digital receipts will increasingly delight consumers around the world who value environmental initiatives by leading loyalty programs.

  • Local loyalty and Community-Based Loyalty

As consumers continue to cope with the global pandemic, their values and priorities are changing. CSR programs will no longer earn the attention or respect they once did, with members increasingly craving connections to each other, and to brands they honestly believe in particularly at a local level. 

Simon Rowles, CLMP, Managing Director, Beyonde (AUS):

  • Changes coming to Australian loyalty market in 2021

Our analysis shows that credit card loyalty programs used to make up half of all the money invested in loyalty in Australia. Most of that has in turn been invested in bank issued airline co-brand credit cards offering points in the frequent flyer programs of Qantas and Virgin Australia which dominate our market. That’s changing. 

Credit cards are being replaced by debit cards (which don’t have rewards) and payment reforms are reducing the funding line the remaining credit cards can contribute to loyalty. That hurts the airline frequent flyer programs who now more than ever need to rely on their members earning points on the ground rather than in the air.

  • Retail customer experience and loyalty acceleration

Our leading retailers have doubled down on their offerings over 2020 and accelerated their transformation agendas. They focused on loyalty yes, but also everything else in their customer experience. Our largest retailer, Woolworths, has advanced and rebranded its loyalty program.  It’s also rapidly advanced digitization with new Scan and Go autonomous stores and in app digital receipts.

Still to come is weighing scales that use artificial intelligence to identify fresh produce and speed checkout and image recognition cameras to scan for empty supermarket shelves.

  • Loyalty from better and better banking

Three types of regulation that had already happened in other parts of the world are about to happen in Australia: privacy (GDPR), credit card funding reductions (interchange reform), and open banking (the customer data right).  These are perfect conditions for FinTech’s, insur-techs, and retail-techs born in those regulatory environments to drive advances in Australia. 

Our home-grown Neo-banks are struggling (one of the first, Xinja, has just closed its doors after a year). The technological advancements are happening inside our large incumbent banks. Commonwealth Bank, the biggest in Australia, already has the best banking app in market and third best in the world (according to Forrester).

  • Australia in 2021: the covers come off

Australia’s economy is already out of recession. The customer experience winners have spent 2020 investing in better customer experiences and 2021 will see them launched and dominating their sectors. We expect to see the adoption of global winning solutions to deliver the best customer experiences, and so drive loyalty, in Australia. 

We’d expect many of the big moves in loyalty in the UK this year to hit Australia in 2021. Some are visible already. This year Pret a Manger in the UK launched a coffee subscription loyalty program. The program is delivered by UK loyalty leader Eagle Eye. Australia’s largest retailer Woolworths quietly struck a deal with them late in 2020. This year Barclays bank in the UK will roll out Bink a fintech who invented the category of Payment Linked Loyalty and will launch them in the main bank app.

Card linking has only hit the mainstream in Australia this year. Australian banks and retailers are uniquely primed to adopt Bink’s unique loyalty solution. There has been strong interest in bringing Bink to Australia from both. Australian born Ixup data ’s unique technology platform enables enterprises to share and analyze customer data between them without ever seeing it. Virgin Australia’s frequent flyer program Velocity has used this to advance its loyalty program. To misquote William Gibson, “Australia’s loyalty future is already here it’s just not evenly distributed.”

Nick Chambers, CLMP, CEO, Mobile Loyalty Technologies (UK):

  • The Reinvention of Brands

Brands reinventing their operating models around consumer data to personalize at scale, respond in real time, and continually reinforce a cycle of relevant content and experiences. I believe this will mean more investment by brands in value propositions that help capture consumer permissions and consents and those MarTech stacks that enable data optimization and drive profitable changes in consumer behavior.

  • The Convergence of Loyalty & Payments 

More companies will take advantage of Open Banking to build payment services based around the use of personal and transactional data. New payment services will emerge with personalization at their very core.

The value exchange and permission led approach associated with a loyalty program will evolve to drive the adoption of alternative payment methods. Just as loyalty programs have become hidden for brands like Amazon, the payment process will also be hidden from consumers.

  • The Rise of Conversational Commerce

WeChat and Alipay have shown us the way in combining messaging and payments. Western platforms like WhatsApp, Google Messenger, and iMessenge will follow. Brands will need to find alternative ways to operate where their customers interact.

Imagine being on Instagram, seeing a picture of food and ordering it for delivery on Amazon Prime or chatting with a friend on Facebook Messenger and then leaving a tip on their restaurant food bill. This is a ‘future’ is where customers look to interact with Brands in more ways and have an ability to do so much more within their chosen channel.

4 Global Predictions for Loyalty Marketing in 2021
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