As the midway point of the year inches closer, with some of the top loyalty and retail conferences upon us, I wanted to share some of the major trends I’ve seen through a customer loyalty lens.
With that, here are what I see as three major loyalty trends that consumers and brands can keep an eye on for the rest of 2023.
1. Premium Loyalty, Paid Enrollment and Subscription-based Programs
Many of our clients use these platforms as either a stand-alone loyalty program or as an exclusive tier in their already existing “free to join” loyalty program platform.
When executed correctly, premium loyalty programs, where people pay a fee to join, create a win-win scenario that dreams are made of for brands and consumers. As premium loyalty program members become more emotionally and financially loyal, brands return that value exchange with exclusive benefits and access that elevate engagement.
This is how one brand loyalty executive emphasized the importance of creating a premium loyalty program: “If you don’t have a paid element in your loyalty program, you are leaving money on the table.”
Keys to success:
- Premium loyalty can provide a separate and impactful revenue stream to augment your business.
- The value proposition is essential to the success of the program.
- The best premium loyalty programs give rewards, benefits and access unavailable elsewhere.
- Turnkey options should be available for test and learn/segmentation.
- Profits earned can be used for new innovations available for premium tier members and can fully fund all your loyalty efforts (and beyond).
- FOMO (Fear Of Missing Out) is a very real thing. Some of the best loyalty programs were launched with a small subset of people or contained invite-only membership.
2. Ensure Your Frontline Employees Can Sell Your Loyalty Program Successfully
A continued hot topic with loyalty programs remains how to activate your brand’s most loyal constituents — your employees!
From the stage to hallway conversations, there are many points of view. Still, many don’t have a real strategy in terms of activating their frontline employees to tout the benefits or encourage signups for their loyalty programs.
Training your frontline employees to effectively pitch your loyalty program to customers is critical for every brand.
Many marketers find themselves in areas where the only lever they have is to give other business leaders (regional managers, GMs) a hard time if they don’t see signups or activity in specific locations.
How important is it for brands to ensure their frontline employees are educating and engaging customers to sign up for their loyalty programs?
According to our recent research, many customers don’t understand how certain loyalty programs benefit them and 23% of consumers say it feels bothersome or annoying when an in-store associate asks them about joining a loyalty program during checkout.
Therein lies an opportunity to train frontline employees on how to showcase the value of your loyalty program to customers while not coming off as pushy or annoying.
There are nuances to running these types of programs and an expert partner can help navigate for training, incentive planning and execution.
Getting your frontline employees trained and motivated to “sell” your loyalty program to consumers is crucial for success. Brands should strategize about handling this piece of the loyalty program puzzle successfully.
- The best loyalty programs have appealing benefits and the truly remarkable ones offer engagement and fun.
- In fact, one of the most overheard things said while planning an epic loyalty program is: “I think I’m going to have to quit so I can participate in this program!”
- High praise and tongue in cheek, but there is something to be said about that which should make everyone pause.
- Besides training or having trackable incentive programs for signups, why not create a version of your loyalty program that enables your brand’s most valuable assets, your frontline employees, to participate?
3. Zero & First-Party Data and the Rise of AI
Yes, first-party and zero-party data is still a thing and your loyalty program can play a huge role here.
Zero-party data is still a relatively new term that refers to customer-supplied data which requires no analysis. This is data and preferences that customers willingly supply.
First-party data is derived from site visits, clicks, choices and, basically, activities that require analysis to determine customer behavior and preference.
These are both valuable tools and are entirely useful in a loyalty program. Because this is valuable data, those that control or have access to that data ultimately own the customer relationship.
This is why brands must make a conscious decision when developing a program and the loyalty platform they use.
Do they want to use a third-party shopping app as their loyalty program? Or do they want to create their own?
AI was all the rage this year onstage and at the water cooler at loyalty conferences.
Brands are using AI to test copy and creative while data is being sliced and diced. From a loyalty lens, does AI offer the ability to really create a unique 1:1 experience between each brand and customer?
This has been discussed for decades, but now that it’s here, is this what people want? Is it creepy that my sneaker brand knows what makes me tick more than my family (or thinks it does)?
- Brands that use third-party shopping sites and apps as their main storefront need to understand who owns the data and relationship in the long term.
- Learn from history – brands that ditched their websites for social media accounts learned that they were merely renting their audience.
- First- and zero-party data are invaluable tools for brand loyalty programs.
- Dashboard-style loyalty and gamification tools enable data exchange in fun and rewarding ways.
Consider the impact of loyalty amplifiers (sweepstakes, instant win, trivia, gift with purchase). Our data shows that 88% of consumers are likely to join your loyalty program if you offer them an incentive.
- For example, the most engaging loyalty programs enable exchanges such as:
- Take a poll and get rewarded (Our client, 19 Crimes, uses loyalty amplifiers in its Infamous Insider Rewards program)
- Rate and review a product and get an instant win spin. Fill out a survey and pick your prize.
- Read an article or watch a video and share your opinion for x points.
AI is a great tool, however, humans still need to watch and make sure that what is being produced is accurate and/or appropriate for human consumption.
This is truly just the beginning and we can expect AI to transform business in a very big way in solving complex problems to enabling better 1:1 communications (provided humans keep it from drifting into an uncomfortable relationship) – this is a “pretty great” innovative tool but cannot replace the human factor.
Premium Loyalty, Frontline Employees, Data and the Rise of AI
To summarize, premium loyalty, effectively selling your loyalty program through your frontline employees, along with the proper use of data and the rise of AI embody the key loyalty trends I’ve seen so far from the conferences I’ve attended.
- By charging a membership fee, brands find their most loyal customers and offer them personalized experiences. An incremental revenue stream rounds out the picture for you.
- Frontline employees are a huge asset and can potentially be a bigger one if they can effectively educate your customers so they’ll want to join your loyalty program.
- Zero- and first-party data can clearly give you great insights to enhance the customer experience.
If you’d like to talk to any of our loyalty experts about any of these topics, feel free to contact us here.