Current Trends in Customer Loyalty Management

With 64% of brands reporting an increase in loyalty program membership over the last year (3Cinteractive), and a recent Wunderman study uncovering that 78% of customers said that they only buy from brands that demonstrate they understand and care about them, there’s no doubt that retail loyalty is big business.

Loyalty marketers in the US that implemented a marketing program in 2016 received, on average, $11.69 in earned media for every $1 spent, meaning a 4.4% year on year increase.

The ability to know what your customers want and thus providing them with a system that simultaneously rewards you and the purchaser is undoubtedly a clever concept that boosts revenue and reputation, so, there’s no wonder that more and more businesses are buying into the field. With the loyalty sector growing, it’s imperative to be clued up on the main trends and tendencies driving this new movement.

Omnichannel Over Traditional Marketing

Omnichannel marketing provides customers with true continuity across brands, across format and across devices to enhance the purchasing and post-purchase experience — perhaps introducing an entirely new concept — a social business.

The role of social media in today’s culture is significant and its influence on business operations is unparalleled. Now, consumers can exercise their opinions in a completely democratic environment, encouraging and demanding business response and action — changing the way organisations communicate with their consumers.

Loyalty schemes need to become more sophisticated, developing their reach and advancing from traditional reward models to these strategies — based on offering a program that provides members with the opportunity to earn points for activities across multiple channels and redeem them for exclusive rewards, much like our BitRewards system.

Consumer Data Complications

One requirement of implementing omnichannel marketing is gaining a deeper understanding of the customer, with marketers gathering crucial data to drive marketing performance.

Brands with an omnichannel focus are consistently researching their consumers across platforms and channels, analysing data through contemporary tactics like predictive analytics. Despite the vast array of benefits this brings — such as the ability to predict future behaviours and target niche markets — the legalities allied with the collection/storing of personal data is complicated through new GDPR laws to be implemented this coming May across Europe.

The new legislation gives consumers enhanced rights regarding their data, hence impacting many e-commerce organisations. Consumers will now have the right to access their data at any given time, eradicate their data from companies’ books, the right to be informed when their data is collected and the right to restrict processing. This has the potential to be a massive loophole in contemporary loyalty programmes, and could perhaps hinder the high-flying movement.

In spite of these added complexities, and potentially causing headaches for retail marketers, is the fact that consumers now expect personalization from loyalty schemes.

The 2016 Bond Loyalty Report discovered a clear correlation between personalization and customer satisfaction, with 79% customers indicating that they are very satisfied with loyalty programs with direct marketing strategies. By utilizing consumer data collected in omnichannel methods, retailers can make personalized recommendations, offer relevant promotions and up-sell products to particular customers. This enhances the notion that our society is now consumer-led, and indicates that, as a result, customer loyalty management is having to adapt. But, with revised data protection laws, it may be more difficult.

Increased Partnerships

In order to stay ahead of the competition within the retail sector, we’re now seeing an increasing number of brands seeking out partners to enhance their influence within the market. The co-operation and teamwork between brands help to extend the reach for both parties — diversifying target markets and developing connections to potential new customers. This is what we at BitRewards have integrated into our own strategy, working in collaboration with GIFTD to provide an efficient and effective service to drive sales and loyalty for clients.

Arguably, as a result of this enhanced commercial power driving the loyalty market, consumers now demand and expect more from the brands they use. A recent Neilson study discovered that 81% of millennials expect companies to go beyond economical gains through being active in their community and driving change. The same study found that 66% of consumers are willing to pay extra for products and services that are sold by companies committed to positive social and environmental impact.

Widespread AI Adoption

Another notable trend in modern consumer loyalty management is the emergence of Artificial Intelligence, machine learning and natural language processing, and the growing number of retailers utilising these specialised programmes. Technological methods such as ‘chatbots’ are becoming more and more popular across the board, with industry experts predicting that 85% of consumer to business relationships will be electronically based by 2020.

The use of automated yet personally customized messaging services on e-commerce websites is an effective way to directly target customers, allowing for the transfer of instantaneous dialogue between business and consumer. They are most often used to solve issues for customers, saving them the hassle of visiting a store or calling customer services.

There are many ways in which AI can improve customer loyalty, consolidate target markets and increase retention rates. With the use of AI and machine learning technologies, you can identify flaws in your products through monitoring consumer behaviour and engagement with singular product features, providing useful insights into how to adapt your offerings effectively. Furthermore, AI can massively enhance personalised marketing approaches.

Looking Forward

Due to the extra attention and interest surrounding consumer loyalty management, it’s a field that is becoming more significant for many retailers. The rewards that companies can reap from integrating an effective rewards scheme are unparalleled, and a huge indicator of business performance, as well as being a catalyst for longevity. As a result, brands are under pressure to meet customer expectations so are investing in the sector more than ever before. But, perhaps the major challenge is to keep up with the dynamic nature of the field and adhere to the trends that are constantly transforming.

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