Customer Loyalty Programs Going the Extra Mile

As the pandemic shifted the retail landscape and pre-pandemic trends accelerated, new consumer behaviours evolved and market share see-sawed precariously. So to, loyalty benefit programs were placed centre stage as retailers had to examine the relevance thereof and how to innovatively retain and grow their relationship with customers.

It’s been said that customer satisfaction is a rating and that loyalty is a brand, which raises the question as to how loyalty programmes need to adapt to draw in repeat purchase behaviours, higher cart values, make authentic personalised connections, and still have access to a rich pool of customer data. Retailers will need to re-examine which customers are the most important to them, how they interact with the company and what features resonate with them.

In a BrandMapp white paper released last year, findings showed that 74% of economically active South Africans used loyalty programs. That males are signing up for programs at a higher rate than their female counterparts – never before seen in a BrandMapp survey – and that the most used loyalty program in the country is the Pick n Pay Smart Shopper scheme with Clicks and
Dis-Chem hot on their heels.

Broadly, customer loyalty benefit programs are indeed changing as pointed out in a WestMonroe article – citing the fact that true loyalty has been watered down by points and reward programs, with too much emphasis on the points and not the experiences created for their customers. IT-Online added that shoppers want speed, friendliness, and effectiveness along with personalisation – where satisfaction and spending are not indicators of loyalty.

Today’s customers expect their retail loyalty programs to be user-friendly and accessible anytime, anywhere. Deloitte in researching how to build leading retail loyalty programs found that more than 80% of consumers in South Africa identified ease of use as a highly desired attribute of a program and 60% selected the need for an accessible, enjoyable digital experience. A compelling driver to integrate these types of programs into the broader customer experience.

“I mean it’s great to earn a free cup of coffee from Bootleggers or Motherland as it all boils down to giving customers more of what they love. However, the barometer is shifting and retailers and brands must look at new ways of doing business. TOMS One for One – the world’s largest shoe manufacturer and retailer do not award points or prizes. Instead with every purchase of a pair of shoes, their customers earn a non-monetary incentive that allows them to donate shoes to communities in need. This nails the appeal for a customer’s sense of worth as it now becomes more about experiences and in my book that is the sweet spot. Managed with agility and innovation the connection between customers and brands will be strengthened,” said Smollan.

Nic Roets at LoyaltyPlus echoes this sentiment around the need to relate to a brand on an emotional level instead of it being purely commerce-driven, taking it one step further saying, “The cornerstone for loyalty to evolve is to bridge the gap between the digital and physical worlds more effectively. This does not mean that these types of programs should throw out the inventions that were successful in the past. Instead, it’s about enhancing them for a world that sees online shopping dominated by a more value conscious consumer.” Undoubtedly retail brands are still trying to get to grips around optimising the physical and online space. Coupled with a deeper understanding that by reducing customer effort and creating richer experiences, this will allow for far better attrition with loyalty gains.

WestMonroe offers further perspective as loyalty programs cast the net wider both in-store and online, suggesting that “connective tissue” binding various customer touchpoints, while a challenging task, starts with investing in a holistic technology strategy and architecture. A website is no longer just a website neither is the in-store or mobile experience. Retailers and brands that achieve true customer loyalty will put more emphasis on each of the experiences they create, no matter how small.

Mobile loyalty apps have further enhanced the customer experience making the parameters of what brands can do – limitless. That said, bondbrandloyalty cautions brands and retailers that in order to avoid the pitfalls of taking your program online one has to be mindful when designing a program, to include the operations team early on to allow them to find solutions to barriers and side-step operational challenges to make sure one has the right tech to bring the loyalty vision to life.

A recent article on FANews observed that retailers and brands will re-design their programs with a better, data-driven understanding of how customers prefer to shop and visit, to allow people to interact with and invest in brands. As well as understanding the need to embrace authenticity as consumers want to interact with companies that share similar values. Or as suggested by Deloitte, to create enhanced flexibility to allow exclusivity for members such as expedited shipping or access to products before officially going to market or perhaps the ability to earn and redeem rewards with retailer’s partners.

Right now as the pendulum swings, this is a unique opportunity for brands and retailers to reimagine their long-term loyalty benefit strategy.

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