Top trends behind loyalty program engagement
Marketing in the digital age is constantly evolving as the industry continues to refine its techniques and searches out new ways to help brands resonate with customers, with the loyalty industry being particularly subject to change recently, according to Christopher Barnard, president for Points International.
Loyalty operators have seen some significant shifts in a short space of time: changes in consumer needs, changes in technology, and new ideas and techniques in analytics, to name just a few - all of which has made it a time of ups and downs for loyalty programmes.
Colloquy's 2013 Loyalty Census found a 26.7% increase in loyalty programme membership between 2010 and 2012, but also a 4.3% drop in active memberships during the same period. And Forrester Research's The State of Loyalty programmes 2013 concluded that only 35% of loyalty programme members were redeeming rewards.
A successful loyalty programme not only has to maintain and grow membership levels, but also increase member engagement, incentivise customers, deliver value to consumers while encouraging their loyalty, all while making a profit.
Here is a quick summary of a recent Points report on loyalty programme trends that can help brands be more engaging over the next twelve months:
- Gamification Call it the 'Mary Poppins protocol': turning a task into a game always makes it more appealing. Loyalty programmes have always had natural game-like attributes, encouraging participants to rack up points and redeem them for prizes, but modern gamification is about making the most of modern technology.
Gamification does three important things: it keeps consumers engaged on a specific platform (mobile devices, social media, apps), engages them psychologically by bringing out their competitive and problem-solving instincts, and, of course, entertains. Its goal is to create a relationship of exchange where consumers are challenged and incentivised to share more of themselves: their time, their attention, their information and ultimately, their loyalty.
- Broader distribution The proliferation of mobile technology has given customers the power to choose how and when to interact and transact with brands, a trend that shows no signs of slowing down. Proactively reaching out and meeting customers where they are at every opportunity is essential to maintaining an engaged customer base, especially for loyalty programmes.
Loyalty programmes can widen their distribution using online, offline and mobile environments, including brick-and-mortar stores, websites, tablets and social media. When programmes distribute information as well as transactional capabilities everywhere they can, members are enabled to interact with their programmes whenever and wherever they want - opportunities an increasingly mobile-savvy member base is starting to demand.
- Mobile wallets Mobile wallets leverage the power and popularity of mobile technology to make purchasing easier and more convenient. Even better, they're a natural ally of loyalty programmes, allowing programme members to have all their loyalty information consolidated and at their fingertips at all times.
Mobile wallets are at the threshold of becoming mainstream, and loyalty programmes could be that final push. Points' research indicates that 78% of consumers surveyed would be more likely to make a purchase if offered points or miles, and 73% wish there were more ways to earn points and miles in their favorite programmes. To learn more about how digital wallets will ignite loyalty, download our whitepaper.
- Using big data for predictive analytics Big data is a big buzzword, but massive volumes of information are meaningless unless companies understand which data points are relevant to their customers and strategies. Predictive analytics-using data to predict how customers will behave based on patterns of behavior among similar customers- allows loyalty programmes to exercise greater segment specificity and identify more accurate behavioural indicators.
- Real-time messaging / geo-targeting It took 38 years for the good old radio to reach 50 million users - a feat that the "Draw Something" mobile app accomplished in just 50 days. This and countless other examples of mobile's exponential growth have taught us that Mobile is now King.
Mobile devices have reshaped the way we access information, and capitalising on the real-time and geo-targeting capabilities of mobile is an important way loyalty programmes will be able to capture their users' attention. Which incentive do you think is more immediate to a consumer: a loyalty programme card tucked away in a wallet, or a text message at lunchtime that offers a coupon for a restaurant just steps away?
Opportunities for loyalty According to the 2013 Loyalty Report: US Edition from Maritz, 80% of loyalty members agree that programmes were worth the effort, and 94% want to receive programme communications.
We know that customers are eager to continue engaging with their loyalty programmes, but it's up to the programmes themselves to take advantage of current trends, strategies and technologies that will make them more engaging, and translate those strategies into profit.
The full Points report has been made available for free download here.