EVOLUTION OF THE LOYALTY LANDSCAPE

Credit by Merkle


The loyalty landscape continues to evolve; while some sentiments remain similar to last year, others have shifted. We’ve highlighted key areas marketers must focus on in order to keep their loyalty initiatives relevant in 2019 and beyond.


A key shift in loyalty marketing has been the rise of emotional loyalty and a focus on differentiating between “big L” (the overall brand experience) and “little L” (the loyalty program mechanism) loyalty.


Formalized loyalty programs are now ubiquitous in the marketplace across verticals, even in areas where they weren’t traditionally found, like insurance, banking, automotive, and more. Because of this, consumers are becoming even more demanding in their expectations of these programs and discerning about which brands will actually earn their loyalty.


Brands can’t rely solely on the “little L” to drive true loyalty, and the need to consider the entire brand experience is crucial.


From the data, four key themes emerged:

1. Free Products And Discounts Remain King Of Rewards



Despite a slight decrease from last year, 75% of consumers still cite discounts and offers as a reward type they like. Free product, free samples, and free services also remain highly popular. Increasing in popularity is chance-to-win rewards, where consumers have the opportunity to win larger prizes. Including digital promotions such as sweepstakes and instant win games with prizes are also effective ways to engage and activate a loyalty member base, providing the same impact as a surprise and delight initiative.

2. Reward Utility Is Critical


Consumers’ biggest complaints with loyalty programs center around how long it takes to earn a reward and how difficult it is to get. Other negatives highlighted were that rewards or points expire too quickly and that the redemption process is too difficult. When a consumer’s hard-earned rewards expire before they can figure out how to use them, it can actually damage the relationship you were trying to reward in the first place. Make sure that you balance time to earn with ease of redemption so that consumers are motivated and truly rewarded by the program.


3. Surprises Drive Emotional Connections


When asked what is the most important way a brand can interact with them, consumers most commonly said ‘surprising them with offers just for being a customer.’ As this wasn’t one of the top ways consumers said they like to be rewarded, it’s important to consider how surprises are positioned – both within and outside of formalized loyalty programs. Test and learn to understand when these tactics have the most impact. Then consider how, when, and where surprise and delight tactics can be programmed into your strategy, so while they remain a surprise to your program members, your team can have them budgeted, planned, and accounted for.

4. The Loyalty Experience Is The Brand Experience


Although websites topped the list as the most preferred way to access loyalty program information, there is growing interest in new or emerging channels like smart speakers and Facebook Messenger. As you program your overarching brand communication channels, make sure to include loyalty. Consumers expect to interact with a loyalty program in the same way that they interact with a brand, and that includes via new or existing technologies.

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