Retail trends: loyalty programs boost customer retention
Customer retention is crucial for retailers since it increases the profitability of business while saving on marketing and customer acquisition costs. According to the 2022 Loyalty Barometer Report, loyalty programs have a huge impact on customer retention: almost 8 in 10 consumers are more likely to continue to do business with a brand because of its loyalty program. To discover how consumers feel about loyalty programs, the researchers surveyed 1,500 US consumers aged 18 to 65. Let’s take a look at the key insights of the report and highlight some effective ways to boost customer loyalty and retention.
Building brand loyalty starts with a great product but is not limited to it. According to the report, a product alone is not enough to keep loyalty, as brands must meet both rational and emotional needs of their customers. Loyalty programs are a great tool through which businesses can build customer trust by meeting the rational need for value through discounts, then also support emotional needs by providing life-enhancing benefits. The customer survey has proved the point: 79% are more likely to do business with a brand because of its loyalty program.
The majority of consumers are actively engaged in brand loyalty programs. Overall, two-thirds of the surveyed belong to 1–5 programs, while almost 8 in 10 are part of a paid loyalty program.
In terms of importance for Gen Z consumers, rewards rank higher than both customer service and a consistent customer experience. Among the Gen Z consumers surveyed, more said that loyalty programs would increase their likelihood of continuing to buy from a brand than said the same about customer service and a consistent customer experience (81%, 69% and 68%, respectively).
Discounts and free products are consumers’ most favorite rewards. Discounts are the type of benefit that most respondents say they like to get, with 79% saying as such. 65% of the surveyed also like to receive free products.
Crypto and NFTs are among hot topics in loyalty. According to the report, brands investing in these areas can incorporate bespoke elements into the customer experience. Branded NFTs are also expected to play a major role in promotions, using exclusive activations that drive engagement and sales within the metaverse. Those brands that test and learn early will be better equipped for when crypto and NFTs are at scale in the web3 future.
The key insights of the report demonstrate the importance of building effective customer loyalty programs to retain a brand’s audience. As the company that brings innovation to customer shopping experiences, Cappasity is launching a solution that will allow brands to create NFT-based loyalty programs and add extra value to their products. A Cappasity NFT can contain not only photos and videos, but also text (e.g. a brand’s history), immersive content (3D/3D View visualization, AR holograms, virtual try-on), and VIP perks and benefits, like personalized discounts, invitations to events, priority access to new product launches, and more. Brands can add new content to NFTs even after the customer gets the token, which allows them to use Cappasity NFTs as a new customer communication channel.
To provide a customer with a Cappasity NFT, a brand creates an NFT on the Cappasity platform and generates a QR code, a redeem code or an invitation link that provides access to the NFT. Then the brand prints the QR code on the product’s tag or sends the redeem code or the link to the customer by e-mail. The buyer only needs to scan the QR code or follow the link, and they will get access to NFT. The video demonstrates how a brand can share a Cappasity NFT using a QR code printed on the item’s tag:
To create an NFT-based customer loyalty program, contact our team at email@example.com.