Please enter your username or the email address associated with the account so we can help you reset your password.
Yesterday, Loyalty360 CEO Mark Johnson unveiled the 2019 Loyalty Landscape report in an interactive webinar. The webinar presentation highlighted some of the most important trends and data that we’ve gathered from a recent survey of nearly 300 brand representatives. This survey has enabled us to formulate an understanding of the industry that is sorely needed as brands struggle to understand confusing terminology.
“Brands have a hard time without consistent nomenclature,” said Johnson. “Challenges are arcane. Buzzwords are perceived to be proprietary, even though they may not be. There’s a challenge in trying to understand technology. We need to look at this from an industry perspective to assuage this problem.”
The Loyalty Landscape report is intended to do just that by bringing clarity to the loyalty space.
The first piece of data that puts the problem into stark focus is the contradiction between the fact that 43 percent of respondents said that they face challenges getting senior-level buy-in for loyalty enhancements, even though 66 percent of respondents also said that loyalty efforts have executive-level support. How is it possible for a majority of marketers to believe that they have support from executives while another four out of 10 also believe they do not? These two stats seem totally at odds with one another and signal to us that clearer definitions, as Johnson said, are indeed needed.
Much of the data we collected corroborates the idea that a majority of marketers believe they have executive support. For example, almost 70 percent of respondents said that customer loyalty efforts are at the center of their marketing focus, which suggests that they are given leeway by the C-suite to do what they need to do to create loyalty. In addition, almost 60 percent of respondents said their companies increase marketing budgets each year, and another 25 percent said that marketing budgets remain the same. This tells us that nearly 85 percent of marketers have enough confidence to either increase budgets or, at the very least, keep budgets stable with consistent funds.
In addition, 60 percent of respondents said that they plan on making enhancements to their programs within the next 12 months. Only five percent said they definitely would not make enhancement. So, again, we have plenty of evidence that suggests that senior-level or executive personnel do support loyalty efforts. Understanding the disconnect between the 43 percent of respondents who do not think senior-level people support loyalty enhancements and the 66 percent who do has to do with speaking more plainly about loyalty. As Johnson said during the webinar, “The more simplicity we can have in how we talk about loyalty, the more we can substantiate loyalty’s benefits.”
That being said, there does seem to be consensus that, as far as technology is concerned, brands need to do a lot to improve. For example, 61 percent of respondents said that a gap between the skills that brand representatives actually have and those that they need to properly use technology exists. Compounding this problem is the fact that only 47 percent of respondents said that tech providers understand brand requirements for personalization. Because 61 percent of respondents said that they have the data they need for personalization, we can conclude that it is technical skills, not information, that is lacking.
Perhaps this is why only 44 percent of respondents are either currently integrating personalization strategies into their technology stacks or already have strategies in place. In contrast, the remaining 56 percent are still very early on in their personalization journeys, with 11 percent at the proof-of-concept stage and another 28 percent doing initial planning.
In addition, when asked about obstructions to effective loyalty strategies, a plurality of respondents, at 21 percent, said that keeping up with technology is the biggest problem they face. Another 20 percent said customer engagement, and another 20 percent after that said personalization. Furthermore, only 11 percent have begun to implement machine learning, while 31 percent haven’t even discussed it.
A few reasons for this slow adoption of tech present themselves. 50 percent of respondents cited ROI as the biggest challenge to creating personalization. Given that 60 percent of respondents also said that the most important metric they use to measure loyalty is sales, concern over ROI makes sense. If a brand makes a big investment in a technology that turns out to be wrong, ROI will definitely suffer. Additionally, because developments in technology happen more swiftly now than they ever have in history, it’s no wonder that 54 percent of respondents said that integration is their biggest challenge when it comes to picking the right technology.
However, most respondents showed great interest in new technologies. 44 percent said they’re interested in customer journey and experience mapping technology. Another 43 percent said CRM technology. At the very least, these numbers can give brands a good idea of what their peers are adopting and help them determine if they’re on the right technology track or not.
An additional trend that we identified from the survey is that loyalty is being defined differently, more holistically, more experientially. In our 2018 Loyalty Landscape report, 78 percent of respondents said that their company has an explicit, points-based program. However, in our 2019 report, only 57 percent of respondents said they have an explicit program. This decrease of 21 percent tells us that transactional programs are no longer defining loyalty. Loyalty is becoming less and less programmatic.
At the end of the webinar, one attendee asked about trends regarding customer engagement. Johnson replied, “There’s a huge focus on customer experience, customer engagement. Engagement still has a broad connotative and denotative meaning, but the traditional, points-based, buy-stuff-get-stuff programs are going away. Instead, it’s surprise-and-delight, customer experience, voice of the customer. Getting the customer involved in the holistic vision and purpose of the brand—whether it’s social causes, recycling, moving away from single-use plastics—has increased as well. Tailoring to the customer is something that we continue to see more and more interest in.”
This might account for the rise of innovation teams, who are coming up with new strategies and processes as loyalty is being redefined. In all, this seems like a really good thing for the industry. If transactional programs are becoming old hat, then invigorating loyalty as a whole with new ideas and value propositions is a necessity. As 2019 progresses, we’ll see if these trends remain constant.
Thank you for signing up, please check your email for more information.