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These days, what we think of as “loyalty” is ever-evolving. While the promise of burgeoning tech is catching a lot of the noise for the marketplace, there are underlying strategic tactics that are laying the true foundation for loyalty’s future.
Trend #1: Going Beyond Points
When you think of loyalty, you might cringe thinking of points liability, the dynamic of which has made loyalty taboo to many organizations. The good news is that you can build a strong loyalty strategy beyond points and the possible liability headache. In the next few years, we’ll see more and more loyalty strategies based on a foundation of individualized experiences versus earning, using foundational loyalty tactics to collect and unify member data across hundreds of touchpoints. Using this data, brands tap into sophisticated segmentation and personalization to build a relevant value exchange that goes beyond earn and burn, cementing a stronger bond with their customers.
Trend #2: Paid Subscription and Memberships
Today’s customer – in particular Millennials – seek preferential treatment and status and are willing to pay for it. 33% of customers between 25 and 44 note the ability to pay for special status and benefits as very important to them1, and we’re seeing the results of premium paid programs across multiple verticals. A monthly or annual fee that unlocks increased benefits hooks the customer into the program, and the experience hooks customers on the brand. Companies like Amazon, Restoration Hardware, IHG and AMC Theaters see the potential for a recurring revenue stream and the opportunity to provide richer experiences to their customers.
Trend #3: Convergence of Marketing Under Loyalty
There’s no doubt marketers have a lot of data – we’ve all seen the Gartner Transit Map that depicts the various channels and touchpoints where brands and customers interact. But what marketers don’t always have is a customer proactively tying themselves to their data. When thinking in terms of customer journey mapping and growing as a customer-obsessed brand, marketers are making decisions around broad segments of anonymous customers. Loyalty is the fundamental mechanism by which a customer self-identifies and volunteers their information to a brand. It allows marketers to build out 360-degree views of customers and serves as the conduit to true personalization, not just a name on an email. With loyalty as the anchor, marketers can leverage customer data to strategically invest in all areas of their marketing and even operations. From this, they can transform their company into a customer-obsessed brand. It’s no coincidence that some of the brands best known for their experience – Nike, Walgreens, Ulta – have strong loyalty programs.
Trend #4: Lifestyle Approaches
Brands are broadening their reach to customers beyond their main services and products in an effort to embed their brand into their customers’ lifestyles. To hook customers into habitual behaviors, brands are stretching their content, offers and partnerships. For instance, through a workout app, Nike Plus members can unlock rewards to the brand’s partners: Apple Music, Headspace and ClassPass. From there, a member is rewarded and habituated to using Nike’s app, creating stickiness for the brand in all the healthy aspects of a member’s lifestyle. Every stride and step of a customer’s healthy behavior is tracked, building up to personalized offers and creating an experience that blends Nike’s digital and physical worlds. The brand knows passionate athletes are part of a larger community and has built out social and digital events around it – including an AR scavenger hunt through the app, and the ability to connect with other athletes or be cheered on along their run by family and friends. These tactics built around the customer lifestyle reduce any friction between the brand and the customer. They all enhance the quality of the customer life and often these tools make the customers life easier. The latter is a key benefit of this approach. It’s what keeps bringing the customer back.
Trend #5: Individualized Loyalty
As all these trends grow, loyalty itself will continue to evolve from personalization facilitated through advanced segmentation to truly individualized experiences. Not only will communications be even more targeted and relevant, but soon campaigns, program constructs and value exchanges will be modified for individuals at scale. With the help of machine learning, loyalty analysts continue to develop the tools that keep members engaged, such offer engines that serve relevant product recommendations, or onboarding programs that take into consideration the hundreds of facets that influence a customer’s behavior and emotional bond with a brand. Loyalty will facilitate removing friction, enhancing convenience and making consumer lives easier. Through this, brands will expand beyond transactions into other areas of their customer’s day-to-day life, truly becoming a habit.
Aimia Inc. is a data-driven marketing and loyalty analytics company dedicated to customer growth. Our Insights and Loyalty Solutions Division is focused on providing our proprietary loyalty clients with the customer insights they need to make smarter business decisions and build relevant and long-term one-to-one relationships with their customers. SmartJourneyTM is Aimia’s methodology for an end-to-end loyalty solution for brands. The customer journey-centric process provides clients with a distinct and proven track to predictable customer growth.