There seems to be a general consensus that 2016 was, if nothing else, an unpredictable year, and the loyalty marketing industry hasn’t been immune.
We saw some notable, and often surprising, changes in the last 12 months – with ecommerce leaders like ASOS jumping on the loyalty programme bandwagon, to big names like Starbucks and American Airlines switching up their schemes.
So what can loyalty marketers learn from the past year? And what do you need to do to ensure your programme is profitable in the coming months? Here are the key things we believe will be essential to loyalty programme success in 2017.
Build in flexibility and agility
It shouldn’t take two years to build a loyalty programme… and it shouldn’t take two months (or even two weeks) to tweak it. And yet these are the timescales many businesses have to deal with.
ASOS is a prime example of long implementation time – it took the fashion retailer 24 months to build their A-List loyalty programme, which launched early last year.
With such long lead times, making changes to a programme once it’s live can be time-consuming and expensive. And in today’s world of real-time interactions and instant engagement, these timescales just aren’t effective.
If a campaign goes wrong, is poorly received, or simply isn’t driving the expected results, it only takes a few hours for it to blow up on social media. Brands need to be able to respond to problems or changes in the market quickly.
If you’re planning to implement a new loyalty programme this year, or change up your existing programme, it’s worth considering the flexibility of the loyalty technology you choose. Look for software that has flexibility built in, and allows for fast time to market – both for individual campaigns and the programme as a whole.
Make mobile a reality
Mobile has been a talking point for so long, it hardly feels like a “trend” anymore. But with the rise of mobile payments, 2017 is the year to get serious about making your loyalty programme truly omnichannel.
For today’s consumer, convenience is key, and physical loyalty cards are not particularly convenient. A study by Urban Airship found that the top reason loyalty members don’t use their loyalty card is that they simply don’t have it on them when they go to check out. Yet the same study found that loyalty cards that were accessible on a smartphone were more likely to be used.
Whether you’re looking at integrating with mobile wallets, building a loyalty portal into your existing app or creating a standalone loyalty app, make mobile loyalty a priority this year.
Foster emotional loyalty
According to one study, 49% of consumers would switch brands to use a coupon. If that’s the case, how many customers are truly loyal to your brand – and how many are just loyal to a good deal?
To build true loyalty (in other words, to capture those shoppers that wouldn’t switch), brands need to appeal to their emotions. A study by Rare Consulting found that “liking” a brand was the factor most associated with loyalty.
Building emotional loyalty requires a slightly different approach than the traditional discount-focused rewards schemes. From brand values to personalisation, there are a lot of factors to consider. For a full run-down of the keys to growing emotional loyalty, download our ebook.
Reward more than transactions
Perhaps the biggest loyalty news story of 2016 – from the consumer’s perspective – was the change to Starbucks’ long-standing loyalty programme. In February of last year, the company announced its rewards points would no longer be awarded based on the number of transactions, but instead on the amount spent.
Customers were not overly impressed by the changes, and took to social media to express their frustration. Fortunately for Starbucks, consumers’ coffee addiction seems to be a more powerful motivator than loyalty points, and programme membership still increased.
But the situation raises an important question – how can businesses ensure their programmes are profitable without overcomplicating things or upsetting loyal members?
In our work, we’re seeing a shift from rewarding transactions alone, to giving points for other behaviours as well – such as social advocacy, programme participation and lifetime value. That’s good news for engagement, as 62% of consumers said they were interested in earning rewards for social sharing and 76% were interested in receiving points for completing a specified activity (Nielson).
The most important thing to keep in mind as you consider your loyalty strategy for the year is customer experience. It’s the theme running through all these trends, and is essential to building real, lasting loyalty.