Introduction:
The customer loyalty landscape is undergoing a profound transformation, marked by unprecedented opportunity but also uncertainty brought on by changing customer preferences, an array of new, disparate technologies, limited internal resources, and economic uncertainty.
This report explores the loyalty industry’s transformation and key trends for 2024 and beyond, including insights and best practices for brands at any stage of their customer loyalty, experience, and engagement journeys.
From best practices to differentiate loyalty strategies in a competitive market to identifying emerging technologies and innovations poised to revolutionize customer loyalty efforts, this report is a valuable resource for marketers seeking to enhance their customer loyalty strategies in the upcoming year and beyond.
Enhancing Loyalty Efforts in 2024
Building on a trend observed in 2023, numerous brand marketers are prioritizing the modernization and enhancement of their customer loyalty initiatives throughout 2024. While navigating large-scale shifts in loyalty platforms presents challenges for brands, a strong inclination exists toward smaller-scale, iterative program enhancements and strategic engagements. This approach enables brands to rejuvenate their loyalty programs or strategies incrementally, fostering adaptability in response to evolving market dynamics while having the ability to measure the success of program enhancements more accurately.
Standing out from competitors and differentiating oneself from the loyalty program “sea of sameness” is a crucial priority for marketers. Still, it is becoming increasingly challenging as new programs flood the market. Within individual verticals, there are typically many “look-alike” programs that offer similar program structures and rewards without providing any true uniqueness to the end customer.
For brands, this necessitates a continual need to innovate, ensuring their program remains relevant to their customers and is crafted to deliver value in various ways — through targeted content, product recommendations, offers, or rewards — with the ultimate goal of fostering emotional connections and loyalty.
“When it comes to loyalty programs, sometimes people working in the industry think they can set it and forget it, and customers will continue to love the transactional type of behavior that drives so many points per dollar,” says Mastercard’s Jill Moser. “However, brands must start thinking outside the box and wow customers with experiences beyond what they’ve come to know and expect.”
“We believe that if your loyalty program is going to stay fresh, you have to continually inject new elements, experiences, and features to revitalize it,” affirms Capillary’s Don Smith. “It stays ‘brand fresh,’ and the member is more likely to stay engaged in the program. Creating better experiences will produce better outcomes for your business.”
What are some key ways brands are keeping their programs “fresh”? It’s all about the customer experience. “Customers expect a personalized experience,” says Mastercard’s Jill Moser. “The more you can deliver on that expectation, the stronger your relationship becomes with the customer, which impacts longer-term loyalty.”
Enhancing Loyalty Efforts in 2024 (Cont’d)
When brands change their program structures, benefits, or offers, many Loyalty360 Supplier Members suggest exploring avenues to engage consumers beyond mere transactions and reach new audiences through strategic partnerships.
“The main shift is toward ‘what can we do other than offer points and discounts?’” shares Talon.One’s Sam Panzer. “The huge focus for us in the last two years has been on partnership-driven programs. What are the other complementary products and services that can be introduced to customers? That’s been a thing in telecommunication and credit card loyalty for a long time, and I see it entering into new sectors — certainly in retail.”
Baesman’s Kim Welther adds, “One of the biggest program enhancements we see brands focused on is how to increase connections with customers outside of transactions. Once a brand has created the perceived value of a program and offered members hard, tangible benefits, it’s important to drive engagement with softer benefits — e.g., giving customers early access, keeping them ‘in the know,’ etc. These steps will help ensure the program is developing brand loyalists and not focusing solely on tangible benefits.”
With any program enhancements, it’s essential to keep simplicity in mind. Phaedon’s Katie Berndt recommends, “No matter what maturity your program is in, when you try to stand out too much or stand out for the wrong reasons, it can absolutely backfire.
Instead, focus on knowing your customers and what they want and expect. Then, deliver on that to the highest level possible in every channel that you interact with them.”
Mladen Vladic of FIS Loyalty Engagement Solutions sees similar trends with clients. “The number one trend we’ve seen is the simplification of the program,” he says. “Brands must make sure the program is easy for the consumer to understand so that they are engaged in a meaningful way and know what is expected of them.”
As such, ensuring a seamless customer experience requires the right tools and technologies. Banyan’s Eric Dean believes, “A focus on technology will make sure brands are at the forefront of what is next in the loyalty space versus always playing catch up. Program technology should be set up so it’s easy to earn and just as easy to redeem. If the redemption experience isn’t seamless, you run the risk of losing that customer to a competitor.”
vPromos’ Peter Vogel agrees, sharing, “The most important advice we give brands is remove every hurdle or pain point from a loyalty program. If you can make your loyalty program simple to join, simple to use, and simple to earn rewards, you will see an immediate uplift in spend and happier customers.”
When brands change their program structures, benefits, or offers, many Loyalty360 Supplier Members suggest exploring avenues to engage consumers beyond mere transactions and reach new audiences through strategic partnerships.
“The main shift is toward ‘what can we do other than offer points and discounts?’” shares Talon.One’s Sam Panzer. “The huge focus for us in the last two years has been on partnership-driven programs. What are the complementary other products and services that can be introduced to customers? That’s been a thing in telecommunication and credit card loyalty for a long time, and I see it entering into new sectors — certainly in retail.”
Baesman’s Kim Welther adds, “One of the biggest program enhancements we see brands focused on is how to increase connections with customers outside of transactions. Once a brand has created the perceived value of a program and offered members hard, tangible benefits, it’s important to drive engagement with softer benefits — e.g., giving customers early access, keeping them ‘in the know,’ etc. These steps will help ensure the program is developing brand loyalists and not focusing solely on tangible benefits.”
With any program enhancements, it’s essential to keep simplicity in mind. Phaedon’s Katie Berndt recommends, “No matter what maturity your program is in, when you try to stand out too much or stand out for the wrong reasons, it can absolutely backfire.
Instead, focus on knowing your customers and what they want and expect. Then, deliver on that to the highest level possible in every channel that you interact with them.”
Mladen Vladic of FIS Loyalty Engagement Solutions sees similar trends with clients. “The number one trend we’ve seen is the simplification of the program,” he says. “Brands must make sure the program is easy for the consumer to understand so that they are engaged in a meaningful way and know what is expected of them.”
As such, ensuring a seamless customer experience requires the right tools and technologies. Banyan’s Eric Dean believes, “A focus on technology will make sure brands are at the forefront of what is next in the loyalty space versus always playing catch up. Program technology should be set up so it’s easy to earn and just as easy to redeem. If the redemption experience isn’t seamless, you run the risk of losing that customer to a competitor.”
“One of the biggest program enhancements we see brands focused on is how to increase connections with customers outside of transactions. Once a brand has created the perceived value of a program and offered members hard, tangible benefits, it’s important to drive engagement with softer benefits — e.g., giving customers early access, keeping them ‘in the know,’ etc. These steps will help ensure the program is developing brand loyalists and not focusing solely on tangible benefits.”