Over the past three years, consumer behavior has evolved drastically. Buy online pick-up-instore, accelerated delivery, in-app mobile checkouts, AR technology, etc., has given the consumer more control than ever on how they find and purchase their favorite products. Brands are finding that this consumer control has impacted customer loyalty in a significant way. One report recently found that one-in-three customers churn to a competitor due to a lack of brand loyalty and a shifting focus on price and convenience. As a result, brands have made significant attempts to adapt at a record pace—offering loyalty programs that allow marketers more opportunities to better understand and engage with their customers.
Principles for Loyalty Success in 2023
Even well-designed programs aren’t perfect and will undoubtedly require refinement as consumer expectations continue to flex. Recently, our loyalty strategists at Bold Orange helped Forrester Research pull together four ‘levers’ marketers can pull to accelerate their loyalty strategy evolution and hedge further disruption. The key opportunities elevated through this research focused on the need for brands to keep four core loyalty principles at the forefront:
- Fulfill your consumer’s digital needs
- Drive emotional engagement
- Unite with broader customer experience initiatives
- Build on your customer data
While some brands understand and actively deliver on these principles, there are still challenges that even the most prepared brands will face in this rapidly changing environment. Below, our team helped to round up a couple of foundational strategies to ensure your program is primed for success in 2023.
Make Activating Zero-Party Data a Priority
In an environment of constant uncertainty around third-party cookies and consumer privacy, zero-party data—the data that users willingly give up in exchange for certain promotions, insider info and more—continues to be one of the biggest opportunities for marketers as we move into 2023, as reported by our internal experts and the team at Forrester.
But despite companies beginning to more actively collect this data, say they aren’t sure how to use it effectively.
Thankfully, loyalty programs (when executed with a strong strategy) are the holy grail of zero-party data. The opportunity to collect valuable consumer data through account creation, transactions, contests, surveys, quizzes, etc. can provide offers rich insights into their preferences. Brands can leverage these micro-experiences and preference insights to better personalize offers, campaigns, and experiences across a members’ loyalty journey. By collecting this rich Zero-party data, brands are better empowered to:
- Build richer customer profiles. The best customer profiles prioritize quality, actionable customer information — like customers’ preferences and interests — over the sheer volume of customer information.
- Drive sales. Forrester’s 2021 data indicates 68% of US online adults who belong to a customer loyalty program say they regularly participate in the programs they join by purchasing products and redeeming rewards and coupons.
- Accelerate emotional understanding. Loyalty is an emotional outcome rooted in customers feeling appreciated and valued, not a transactional exchange of points.
- Respond to customer feedback. Consumers still want discounts and points from loyalty programs, but they also want to feel special.
Work closely with your teams to ensure everyone is on board with a clear and defined plan for both acquiring and activating zero-party data through your loyalty program. By doing so, you’ll avoid ending up with data you don’t need, or worse yet, can’t use.
Optimize Your Technology to Deliver the Experience
The team at Forrester recently reported that 65% of online customers who belong to loyalty programs recognize the importance and value of a loyalty program, but often feel slighted when those “member-only” offers are also sent to non-members. By removing this sense of exclusivity, customers become turned off by the inconsistent nature of their experience. In addition, some brands have failed to optimize their promotional spend across members and non-members due to overly complex technology architecture, or limitations within the tech stack.
Technology complexity, especially in relation to consumer engagement and loyalty, can have significant cost implications on companies—often due to duplication and overlap in capabilities and functionality across platforms. Such overlaps don’t just introduce unnecessary costs; they impede efficient operations due to incompatible workflows, multiple points of integration, and higher technology management overhead.
Bold Orange recently engaged with Forrester on the report, “The State Of Customer Loyalty And Marketing Technology” which helps leaders understand how to better blend Martech and loyalty technology, and subsequently help improve CX and overall business outcomes.
The Takeaway
So, what are brands to do in this fight for consumer loyalty? It boils down to continually reassessing your strategy, collecting and using the right data, and leveraging the right technology to develop a meaningful and personalized relationship with your consumer.
Because let’s face it, the world is unpredictable—pandemics, weather challenges, political divisiveness, economic downturns, wars, and more—and consumer behavior will continue to change in response. Consumers’ demands to be addressed as individuals, with relevant offers across their customer journeys, will only grow. Brands must be ready to adapt to these shifts as they happen.