In Loyalty360’s Brand Marketer Research Report: 2024 State of Customer Loyalty, brand marketers surveyed indicated that they believe the investments made by their organizations in loyalty programs and strategies are paying off. Seventy-two percent of those respondents also reported that they feel their customer loyalty program drives incremental value to the customer, while 60% feel their programs drive engagement. Fifty-four percent reveal they feel their programs drive an increased number of customers.
As the economic landscape continues to shift and often remains uncertain, brands must stay on top of meeting evolving customer expectations. And yet, in Loyalty360’s research report, some numbers are troubling. Only 51% of brands feel they have a good understanding of how their customers are changing—for their brand or industry.
Loyalty360 invited its supplier-member experts to discuss what brands need to consider as they seek to increase the value of their loyalty programs and ensure customers continue to engage even when wallets are thin. They also offer suggestions around relevancy, tapping into customer data, and building emotional loyalty.
Article contributors:
- Chris Barnett, VP, Strategic Consulting, Kobie
- Katie Berndt, VP of Strategy, Experience, and Research, Phaedon LLC
- Cindy Roseland, SVP of Customer Loyalty & CRM, Phaedon LLC
- Lauren Sutherland, Associate Director of Strategy, Phaedon LLC
- Leanne Cordes, SVP Strategic Services, The Lacek Group
- Tim Glomb, VP of Digital, Content, and AI, Wunderkind
Offering Value with Loyalty
Given the economic environment, today’s brands must balance offering value through their loyalty programs without relying heavily on discounts.
According to Kobie’s Barnett, building loyalty in tough times isn’t about slashing prices; it’s about making customers feel like VIPs. He suggests creating exclusive experiences and offering personalized attention that makes them feel valued and connected.
“Instead of discounts, focus on non-monetary perks like first access to new products or immersive brand experiences,” says Barnett. “Partner with complementary brands to offer compelling rewards for less, creating a sense of exclusive value that
fosters loyalty without eroding profitability.”
The Lacek Group’s Leanne Cordes also believes focusing on personalization is crucial, as there is not a one-size-fits-all approach that will work for every customer. “What a new member values might differ greatly from a long-time, high-spending customer. Brands need to refine and evolve their offerings continuously. Segment your audience and tailor benefit combinations based on life stage, purchase behaviors, and demonstrated preferences.
Jeff Jenkins, CMO at Carter’s, a youth apparel brand,
shared with Loyalty360 in a recent interview that value is vitally important in an economy where younger people—those on the cusp of having children—are cash-strapped. To add more value to Carter’s Rewards, the brand built in experiences and conversations around the “ages and stages of a child’s life.” Carter’s is driving content that may have nothing to do with shopping, but it’s relevant to parents and their children.
The team at Phaedon understands that not every brand can compete on price, so it’s important to deliver tangible benefits to customers in other ways and encourage brands to consider options that are minimal to no cost and deliver a feel-good incentive to customers.
“For retailers, this could be benefits like free shipping, extended return windows, more opportunities to earn and redeem points, early access, or exclusive experiences,” says Phaedon’s Roseland. “For travel and hospitality brands, this could mean perks like free carry-ons, richer co-brand card acquisition offers, or dual-earning on travel and everyday brands through partner programs.”
Wunderkind’s Glomb points to data, noting that
identity resolution partners can understand the click, browse, and purchase behaviors of individuals across thousands of websites. The behavioral data on a given consumer profile can help determine the exact value offering to make on a personalized level to achieve higher conversions.
“Don’t blanket one-size-fits-all discounts to everyone,” adds Glomb. “Use individual historical data to craft the perfect discount or other offer that’s relevant to their wants and needs.”
The Need for Relevancy
Loyalty360 asked the experts about the advice they would share with brands to ensure their loyalty program remains relevant and valuable to customers—even as customers’ financial priorities change.
Phaedon’s Berndt notes that as these priorities change, customers tend to rely on loyalty programs more to help offset costs. Thus, brands should focus on human-centered design and ask customers what they value in their loyalty programs.
“This will help ensure programs remain relevant,” says Berndt. “Most customers want simplicity and convenience (e.g., the ability to easily redeem or convert points to dollars off), expansion of loyalty benefits to include everyday partners, and personalized offers, knowing they can’t take advantage of every offer and promotion.”
Lacek’s Cordes agrees remaining relevant is key, especially as customer needs and preferences regularly evolve. “Flexibility and responsiveness to changing customer priorities are crucial. Look for ways to adjust program mechanics, tier structures, or benefit offerings based on customer insights.”
In an
interview with Jessica Wu-McConnell, Vice President Digital and Loyalty at Church’s Texas Chicken, she shared that the chain’s guests often hail from multi-generational and multi-cultural families looking to make dollars stretch. While Church’s menu offers affordable food, the rewards program is another layer on top of the value the brand seeks to deliver.
“We wanted to ensure that we provide family-sized offerings within the rewards program,” says Wu-McConnell. “A free 16-piece chicken menu item earned through the program is enough to feed the family.”
Barnett and the team at Kobie understand that when times get tight, a loyalty program needs to be a lifeline, not a luxury.
“Make it personal,” Barnett encourages. “Use that data to offer rewards that actually matter to each customer.”
Barnett also wants brands to “think utility”—i.e., solve customer problems and make life easier and more convenient. Brands should also be proactive, reminding program members of available points for rewards or timely, relevant offers.
“Make your program smarter, not cheaper,” he adds.
Tracking Effectiveness
It’s one thing to implement new elements in a customer loyalty program that add more value, but brands also need to track the effectiveness of non-monetary rewards in maintaining customer engagement and loyalty.
Phaedon’s Sutherland recommends that brands
leverage their MarTech stacks to connect customer communications to customer actions.
“Are they utilizing non-monetary benefits that are part of the customer experience, such as expanded delivery options and program partner promotions, more or less compared to a quarter ago, a year ago?” Sutherland asks while noting it’s critical to determine if those non-monetary benefits tie directly to an increase in frequency, wallet share, elevated average order value, or other KPIs.
“Tracking consumer sentiment across social channels can also provide insight into engagement with campaigns and benefit promotions (discounts or non-monetary),” adds Sutherland.
To measure non-monetary reward impacts, Barnett recommends focusing on key behavioral metrics beyond purchase frequency. Brands can track engagement levels through app usage or program perks and measure how non-monetary perk redemption rates correlate with LTV or retention rates.
“Leverage targeted surveys and sentiment analysis to understand the influence of emotional connection, as this often predicts long-term loyalty better than transactional data alone,” explains Barnett.
Lacek’s Cordes notes that overall, while tracking is essential, it’s equally important for brands to understand what the data means. “Analyzing loyalty program data requires both analytical rigor and a nuanced understanding of your customer mindsets. Loyalty programs don't exist on their own. Their success depends on how well they align with the overall brand identity, values, and customer experience. Ensure your team has the expertise to interpret data within the broader context of your brand and its relationship with its customers.”
Engaging Price-Conscious Customers
To achieve success, brands must communicate the value of their loyalty programs to customers who are more price-conscious during uncertain times. Mandy Rassi, SVP-Chief Marketing Officer at Michaels,
shared with Loyalty360 that the brand is constantly engaging its customers to understand their needs and determine ways Michaels can improve the shopping experience. Michaels implemented their feedback and simplified the Michaels Rewards program to maximize value and give them more ways to earn.
Barnett asserts it’s crucial to highlight the tangible value of the program beyond mere discounts. Brands need to emphasize how their programs help customers to stretch their dollars further.
“Show them the cumulative benefits—not just the immediate savings, but the long-term value they’re building,” advises Barnett. “Make it clear how your program fits their daily life, adding genuine value when every penny counts.”
When communicating to price-conscious customers, Sutherland wants brands to focus on savings potential, unique experiences, and convenience. She offers an example.
“Around the same time that it offered a Summer Sale with savings up to 30% off, Sonesta
ran an ad featuring Judy Greer that highlights how Travel Pass members level up faster and receive more generous reward nights compared to other hotel programs—in addition to free parking and a competitive nationwide footprint,” says Sutherland.
Glomb believes that by understanding how a consumer browses and purchases on other websites, brands can better determine the offers they need to make to retain and convert them.
“An identity resolution partner is in the business of understanding,” says Glomb. “Their behaviors are across thousands of websites, and
brands can use this data to enhance their own channel offerings, such as emails and texts.”
Create Moments That Resonate
Building emotional loyalty is critical during economic downturns. Barnett shares that when wallets are tight, customers stick with brands they feel genuinely connected to, not just the cheapest option.
“To connect, you’ve got to create moments that resonate, from highly personalized experiences to gratifying and accessible micro-burn rewards,” says Barnett.
Cordes notes that brands should remember that customer loyalty is a long game, not a quick win. She adds, “These are the moments when brands can solidify trust and create lasting positive memories, forging the kind of unwavering devotion that turns customers into passionate advocates. When you stay true to your promises, your loyal customers become your most valuable asset, helping you navigate challenging times and emerge even stronger.”
The Phaedon team knows that leaning into emotional loyalty drivers like trust, appreciation, and empathy can go a long way toward building and maintaining customer loyalty, even in the toughest times. However, like personal relationships,
building emotional loyalty between a brand and a customer does not happen overnight.
“A few best practices include paying attention to what customers care about by activating both declared and inferred data, making their lives easier with digital experiences that demonstrate an understanding of preferences and buying habits, and investing in the evolution of your loyalty program with value-add partnerships and surprise and delight moments that make customers remember and return to your brand,” finishes Berndt.
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