Revamping Customer Loyalty in 2023: Antavo on Loyalty Trends and Changes

Loyalty360’s most recent State of Customer Loyalty Report revealed many brands are looking to redo their loyalty programs in 2023, adding more reward or customization options. Antavo — as a technology provider for loyalty programs — also received many requests from clients who want to relaunch their loyalty programs and strategies.

Mark Johnson, Loyalty360 CEO, had the pleasure of speaking with Zsuzsa Kecsmar, Co-Founder and Chief Strategy Officer for Antavo about their 2023 Customer Loyalty Report and which trends in loyalty and rewards programs businesses should follow this year.


Redesigning Loyalty Programs in 2023
Companies that experienced the benefits of using loyalty programs understand what worked for them previously and where they need to improve. As they reevaluate and redesign their programs, the overall market noticed the trend and inspired other companies to join in.

Comparing their Customer Loyalty Reports for 2022 and 2023, Antavo found 7/10 companies surveyed wanted to revamp their loyalty programs in 2022, but this year, 8/10 are looking to redesign current programs.

While there are ambitious loyalty managers working to redo their programs, Antavo fears a potential recession may interfere with those plans and Boards of Directors may want to cut back spending on customer loyalty.

“I think the question will be: how deep are we going into the recession more regional and on the global scale?” says Kecsmar.

However, one of Antavo’s goals with their research is to provide businesses with data and statistics to show the value of loyalty programs, even in tight markets.

“We know from Covid that [customer loyalty] is worth investing in,” says Kecsmar.
Navigating the “Sea of Sameness”
Many rewards and loyalty programs function in similar ways, known as the “Sea of Sameness.” As companies seek to redesign their loyalty, they also need to navigate this Sea in order to set themselves apart from other companies and programs.

According to Antavo, many loyalty programs function similarly by nature, as many have tiers and points. Companies can set themselves apart by functioning outside the point and tier systems, using paid loyalty programs or memberships, for example.

“It’s a bit easier to create a loyalty program with the classic tiers and points system and it’s a bit challenging to do something different,” says Kecsmar.

A classic system has the benefit of being instantly recognizable as a loyalty program, there are goals to meet for rewards and points are earned through purchases. The Sea of Sameness brings value in this way, but it’s difficult to stand out.

Antavo found two ways to stand out among these programs:

  1. Move beyond rewarding transactions
Even within a classic tier and points system, providing the option for customers to join a tier without requiring a certain number of purchases allows members to benefit quickly from the program, inspiring them to join.
“Don’t be afraid to think outside of the box. Be present in the everyday life of your customers and reward them for bringing back used item for recycling or use a sport tracker so that members can earn points with exercising,” says Kecsmar.
  1. Offer great rewards selection
Providing physical or digital rewards with high value and interest to the customer sets programs apart. Companies don’t need technological innovation to move beyond classic offerings and into options like early access to new products or partner rewards.

“With a paid loyalty program, you can afford to create a whole new, premium value proposition for those who are your best customers,” says Kecsmar.
Opportunities to Develop Loyalty Programs in 2023
The threat of a looming recession is one of the main challenges Antavo’s clients face when developing their loyalty programs. Antavo’s Global Customer Loyalty Report 2023 helps customers and prospects have data and numbers to present to stakeholders in the company.

According to Antavo’s report, 80% of companies measuring the effectiveness of their loyalty programs had a 4.9 times ROI. While planning for 2023 and beyond, companies looking to bolster investment from stakeholders can access Antavo’s data to get organizational buy-in.

Maintaining Ongoing Organizational Support for Customer Loyalty
Initial buy-in involves selling the idea, while ongoing buy-in requires loyalty managers to prove their program is a good idea every single quarter. This second piece relies on finding KPIs to measure over time.

In their Global Customer Loyalty Report 2023, Antavo determined the top three KPIs for loyalty programs: ROI, Induction Rate, and Redemption Rate. Although ROI is the primary metric stakeholders want to see, it is the most difficult to measure successfully. Antavo recommends that companies focus on measuring the induction rate — how often members join a program — and the redemption rate — how often members redeem rewards.

“[Reward redemption rate] is something we measure for our own customers,” says Kecsmar. “This is how we determine the health of how our customers’ loyalty programs are performing.”
How Privacy and Regulation Impact Customer Loyalty Programs
As government and regulating bodies enact stricter rules and consequences surrounding data privacy, customer loyalty programs need to navigate the changing landscapes. Antavo sees the new regulations as a positive measure for customer loyalty.

“The best practice is to comply with the rules. Not only because they have to, because it’s the law, but because it makes sense. It’s all about consent,” says Kecsmar.

These types of regulations reflect what customers want. From their studies, Antavo found that Gen Z wants the kind of data privacy these rules enforce. Within these regulations, the company asks permission to use customer data. If a customer declines or wants to leave, then the company deletes their data. Complying with these standards ultimately builds trust between the customer and company.
Trends in Customer Loyalty for 2023
In their research, Antavo found four major trends in customer loyalty going into 2023:
  1. Strategic partnerships — joint efforts between companies, allowing customers to earn partner rewards alongside of their regular rewards
  2. Card linking — creating a better in-store/online experience through linking their debit/credit card to the company app
  3. Promoting sustainability and healthy lifestyle choices — offering rewards for actions outside of purchasing, like exercise or recycling
  4. Paid or premium loyalty programs — companies can offer another value proposition that customers are willing to pay for outside of their regular service or product.
For companies looking to incorporate these trends into their existing loyalty strategy, Antavo recommends first looking into the technology the company uses.

“When we think of customer loyalty, there are many things that can be done with the existing CRM tool or the existing marketing automation tool,” says Kecsmar. While some changes — like offering a new reward — may not require new technology, many of the new trends do require changes. This is why many companies are looking at a loyalty program or technology revamp.

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