Today’s brands can no longer rely simply on points to earn and retain customer loyalty. The future of loyalty lies in brand advocacy, creating relationships with consumers that extend far beyond the transaction. To be top of mind even when the consumer is not directly engaged with the brand or product. It also lies in backing by the brand’s own employees.
Nina Rose, Senior Director, Strategic Services at The Lacek Group has seen loyalty from all sides. With over 20 years of experience, both on the client side and the agency side, she has a balanced view when working with clients to strategize program design.
Mark Johnson, CEO of Loyalty360, spoke with Rose about the future of customer loyalty and trends we will be seeing in the upcoming year.
State of Customer Loyalty
One of the top trends seen in Loyalty360’s State of Customer Loyalty research was the high number of brands focused on updating their loyalty programs. As a strategist working on program enhancements for travel, retail, financial services and QSR, Rose has been witnessing the same trend.
“We are seeing a lot of requests for redesign,” she says, especially as companies are shifting focus from transactional to emotional loyalty.
Brands want their programs to be experiential and engaging, not just in the moment, but in between transactions. And it’s not just the brands. Consumers are looking for an emotional connection with the brands they support. An even bigger trend is a desire for authenticity. Consumers want brands to have a purpose, and they want to align themselves with like-minded businesses. This makes a brand’s Corporate Social Responsibility planning an even more critical asset in the new year.
While The Lacek Group specializes in reinventing loyalty programs, Rose stresses that the process is not “one and done.” It’s a continual evolution, and a necessary one to stay relevant.
She says, “The past couple of years show us that businesses need to evolve to stay relevant, and it is the same for loyalty programs. Innovation workshopping and design thinking from a customer-first perspective are really hot with our clients right now.”
Setting Sail from the Sea of Sameness
With more and more companies entering the loyalty arena, many consumers find themselves treading water in the “sea of sameness,” with little to no differentiation between loyalty programs. How can brands break free of this monotony?
According to Rose, the way around the repetitiveness is to understand what unique experiences the company has to offer. Brands do best to determine what cannot be easily replicated in their business – it should be something consumers want and/or addresses a pain point - and make this a key offer in the loyalty program. Programs that incorporate these unique features will easily differentiate themselves from the pack.
Earning Employee Advocacy
While technology and reporting are always critical for a successful loyalty program, clients at The Lacek Group are also seeking ways to gain employee attrition. It has been noted that informed and enthusiastic frontline employees are tremendous assets for a loyalty program’s success. After all, they are the people responsible for one-on-one interactions with a brand’s customers.
Regular communications and ongoing training are crucial. At the Lacek Group, they focus on what they call “change management,” a framework viewed as the head, heart and hands of the program. Rose explains the three pieces as follows:
- Head = Logic. What does the employee need to understand why the loyalty program is important to them and to the business?
- Heart = Emotion. What will bring employees in and make them want to support the loyalty program?
- Hands = Behavior. What does the employee need to support the program, and do they have the tools to succeed?
Having a basic framework such as this allows for the brand and the program to focus on what is most important, but the key to this success is communication.
Brands need to communicate at all levels and the right amount of granularity. It is crucial to gain buy-in from all divisions, from leadership to the frontline employees, and brands can do this by targeting simple messages that demonstrate the value of the program for the employee, the customer and the brand.
The Next Big Thing
With the state of the market, it should come as no surprise that a top trend this year will be the economy. With inflation and rising prices, value will be a big trend in loyalty, but not necessarily in the form of discounts and rebates. It will be the value the program can bring to a consumer’s life, but it’s up to the marketers to determine how to make the program worth someone’s time.
On the program side, marketers will be focusing on the economics of their programs and paying particular attention to ROI. Brands will be looking to invest, but with more caution with regard to costs. Using current data, program launch or redesign may need to be adjusted or assumptions refined to cut down on costs.
When looking to incorporate a new trend or relaunch a loyalty strategy, especially with a focus on budget in the coming year, Rose advises brands to test and learn.
“Utilize limited-time targeted promotions or pilot in certain markets, A/B testing and even customer research,” she says, adding, “All of these things can provide insightful data while limiting your program’s exposure so the brand can make smart decisions moving forward.”