Loyalty Strategy

The Essential Guide to Modern Loyalty Programs – Everything You Need to Succeed in the Modern Loyalty Landscape

Photo by Changsu Im on Unsplash

Editor’s note: This article summarizes the major shifts in modern loyalty programs and was originally published by Sarah Richardson from the Australian Loyalty Association. The findings were sourced via Cheetah Digital’s 2020 Global Consumer Report. In this article, you will find the top loyalty tactics that they found the most important to consider when creating or managing your modern loyalty program in retail, travel, financial services, and restaurant. Enjoy.

What are the key tenets of a modern loyalty program? It’s a constantly shifting definition, but the best programs share many core elements. The masterminds of modern loyalty programs are constantly on the lookout for the next big thing. When convenience, price, and quality are not enough of a differentiator, what else can be? There are several significant shifts in the loyalty landscape happening right now that brands looking to evolve their loyalty programs should be on top of.

By: Sarah Richardson, Australian Loyalty Association

Firstly a shift in data types to zero-party data use only and an increase in respectfully and conscientiously gathering customer data; Secondly a shift from transactional only programs to those that encourage emotional connections as well. Consumers have, literally, a world of purchasing opportunity open to them and organisations cannot rely solely on transactions. Develop true affinity by looking at what your brand does best, what aligns with your brand values, to come up with creative ways to reward members beyond just dollars spent. A shift to new and multiple types of currencies. Fleet Feet in the US for example, who sell running shoes, use their loyalty app to reward runners for miles run, for clinics and classes members attend in stores, for checking in at events, for taking quizzes, and for documenting their health indicators. Lastly, a shift to doing something daring helps your program to stand out to the consumer, and connects with them in a way others can’t. Old Chicago recognises its most loyal customers through their World Beer Tours, offering guests the ultimate challenge of drinking 110 varieties of beer to earn a spot in the program’s Hall of Foam. Rewards for this are highly prized, such as your own glass kept behind the bar.

Top Loyalty Tactics for Retail

  • Speed is everything; customers want options when it comes to delivery, often desiring faster or cheaper delivery options.
  • Messaging is consistent across all channels. Instore staff should have the same relevant information about a customer available to them, so they can use that information to deepen the relationship.
  • Enable your client-facing employees. Their interactions matter when speaking to members; advise them to acknowledge members by using first names and thank them for their loyalty. If they aren’t a member, they should ask and confidently explain the benefits.
  • Returns and exchanges are a hassle, but if they’re flexible and fast, customers won’t feel so intimidated by the process.
  • Sending follow-up communication can encourage post-purchase behaviour. Customers that experience true personalisation in communications are 44% more likely to become repeat buyers, 39% more likely to tell friends and family about it; and 32% more likely to leave a positive review*.
  • Experiential rewards are just as popular as monetary rewards. Whether it’s early access to a sale or a birthday surprise, it makes customers more loyal to your brand.

Top Travel Loyalty Tactics

  • Increase flexibility. The hallmark of travel loyalty programs in the past was rigidity. Removing a few restrictions can make your loyalty program more appealing to a wider audience. United Airlines, and Delta before them, dared to offer something other airlines didn’t: points that didn’t expire. When points are as good as cash, as they are to frequent flyers, customers appreciate airlines keeping that liability on the books.
  • Loop your customers in. Let them know about updates to their travel plans or anything that can make their experience more convenient. A simple text message from the airline letting you know where your connecting gate is for your next flight, and how long it will take you to get there, will make a usually very stressful connection, easy and seamless.
  • Embrace clarity. Do your customers find your points system confusing? Complexity only adds confusion and members that feel like you are tricking them won’t engage.
  • Keep the channels open. Whether it’s email, social media, or over the phone, your most loyal customers have the expectation of being able to communicate with you when they need help.

Top Financial Services Tactics

  • Embrace experiential marketing. One of the areas that financial services brands can provide experiences is to find ways to help customers improve their financial health.
  • Surprise and delight. No one really expects to be surprised and delighted by their financial institution, which is why rewarding customers with surprises like tickets to their favourite shows will make them feel valued and create a warm sentiment towards your brand.
  • Try out tiers. financial industries have yet to take advantage of a tier system. Customers will feel motivated to get to the next level and stay engaged once they reach higher tiers.
  • Make it exclusive. There are already exclusive cards, programs, and accounts that only certain members can take advantage of. Customers love to be a part of a select group.
  • Don’t be afraid to go outside the industry. Quizzes or polls on a variety of topics can encourage customers to engage.

Top Restaurant Loyalty Tactics

  • Recognize your most loyal customers. Every visit should get points, but very frequent customers should be recognized and rewarded,
  • Freebies are always appreciated. Donatos thinks outside the (pizza) box with Donatos Pizza Love Rewards. Birthday surprises, free pizzas and amazing customer service make customers go out of their way to get the rewards only available at their restaurant.
  • Take advantage of referrals. Reward customers for sharing your program with their friends with 2-for-1 deals.
  • Convenience is key — especially in today’s climate. Make it extra convenient for customers to eat at your restaurant, whether that’s offering payment inside your loyalty app or offering easy pick-up options.
The Essential Guide to Modern Loyalty Programs – Everything You Need to Succeed in the Modern Loyalty Landscape
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