Consumers’ needs and desires are evolving and so too are the ways they engage with your brands.
Topics like subscriptions, tiers, differentiation and more options on how to earn and redeem rewards are among the hot topics in the loyalty industry now.
So, what will be the biggest loyalty trends next year?
Here are five loyalty trends you should pay attention to in 2024.
Differentiation Will Be Critical For Your Loyalty Program
There is a “sea of sameness” feeling out there among consumers toward most loyalty programs.
While most (83%) consumers belong to between one and six loyalty programs, roughly one-third of them are only using a quarter of their loyalty program memberships.
According to our 2023 Loyalty Programs Data Study, 91% of consumers agree that many loyalty programs feel similar and are not that differentiated from others.
Solely transaction-based relationships aren’t enough to differentiate your brand.
You need to provide an attractive value proposition for your customers because, with so many options out there, they may look elsewhere.
After you listen and understand your members’ needs and desires from your loyalty program, you can differentiate your brand by giving your members unique benefits that are valuable to them.
Mix transactional and experiential benefits to differentiate your loyalty program. If you offer your members this in your loyalty program, you’ll create strong emotional connections.
For example, The North Face offers the XPLR Pass program that’s geared toward experiential benefits. It incentivizes loyalty program members to earn more rewards by offering flexibility in how they’re redeemed—with options tailored to match its customers’ lifestyles.
Customers can earn points the traditional way on every purchase, but also in unique ways like attending The North Face events, checking in at certain locations and downloading The North Face app.
When it comes time to redeem rewards, customers can use points toward unique travel experiences, like a mountain climbing adventure in Nepal.
Besides transactional benefits, the Sephora Beauty Insider program offers experiential benefits such as behind-the-scenes content, personalized beauty recommendations, exclusive events and meet-and-greets.
These brands have differentiated their loyalty programs by offering unique and valuable benefits. This has helped them to attract and retain loyal customers and to build stronger relationships with their customers.
Your brand is unique and its story is appealing to your customers. Bring that story to life through a compelling loyalty program that is unique and on-brand.
Subscription Loyalty Will Engage Your Best Customers
The subscription model has been popular in American culture for a long time since consumers use it regularly for things like clothing, food, household goods, personal care items and magazines.
There are two types of subscription-based loyalty programs (premium loyalty and premium tiered) and paid enrollment which is not a program, but a paid limited-time offer that can be integrated into your loyalty strategy.
Premium loyalty is a paid loyalty program where members sign up and pay an annual or monthly membership fee (typically an annual fee) in exchange for enhanced benefits they can use right away. Instead of making purchases to receive rewards down the road like in a points-based program, it’s the reverse with premium loyalty.
With a premium loyalty program, your brand receives greater engagement, more order frequency and higher AOV in addition to collecting valuable data about your best customers.
Premium loyalty members receive the best of your brand all the time and the data collected on shopping habits and personal interests can be used to personalize the experience of each of your members while the membership fees can offset better benefits.
Premium loyalty members are your best customers.
According to our 2022 Premium Loyalty Data Study, 71% of premium loyalty members shop with brands whose programs they participate in at least once a week.
Consider that 91% of premium loyalty members are likely to choose a brand over a competitor offering a lower price if they’re satisfied with the special benefits offered by the brand’s program.
For example, Barnes & Noble has a subscription-based premium loyalty program called B&N Premium Membership.
The annual membership is $39 and includes:
- A 10% discount in Barnes & Noble stores
- A 10% discount for purchases made on bn.com
- A new spend-and-save reward on all shopping
For every $10 spent, B&N Premium members receive one stamp and after receiving 10 stamps, he or she earns a $5 reward, free drink upgrades in B&N Cafes, a yearly free canvas tote and free standard shipping.
Download the 2023 Paid Enrollment Data Study.
A paid enrollment is a type of subscription loyalty amplifier that allows your customers to receive limited-time benefits or offers in exchange for a fee.
Paid enrollments are usually more time-sensitive because they’re open for either a limited time or there are only a limited number of spots. The goal with paid enrollments is to create a sense of urgency and exclusivity by offering these opportunities through your loyalty program.
They create elevated engagement and a sense of FOMO because it gives your customers or existing loyalty program members chances to receive amazing benefits or experiences that are not available to everyone, for a fee.
Here’s an example of a paid enrollment.
Taco Bell’s Taco Lover’s Pass allowed participants to receive one taco each day for 30 days. The price for the Taco Lover’s Pass varied from $5 to $10, depending on the customer’s location.
The Taco Lover’s Pass offered customers seven options: Crunchy Taco, Crunchy Taco Supreme, Soft Taco, Soft Taco Supreme, Doritos Locos Tacos, Doritos Locos Tacos Supreme, and Spicy Potato Soft Taco.
According to our 2023 Paid Enrollment Data Study about subscription-based loyalty, a staggering 93% of consumers belong to at least one subscription and 68% of that group belong to multiple subscriptions.
Choices on How to Engage to Earn and Redeem Points
Consumer choice will be critical for you to build stronger relationships with your loyalty program members.
Instead of linear experiences, give your customers choices so they can choose their adventures.
Make offers based on purchase behaviors like point-earning activities where members can choose.
For example, offer multi-action activities that can be unlocked each week or all at once and let your loyalty program members choose how they want to interact at that given moment.
Build habits around specific activities like answering a weekly poll or three times a month instead of quarterly or monthly.
Gamify purchases by rewarding a flat transaction, but adding an activity along with that so you create a repetition element.
Multi-action activities in a loyalty program require members to complete multiple tasks to earn rewards. This can include things like making a purchase, writing a product review, referring a friend and following the brand on social media.
Multi-action activities are a great way to encourage customers to engage with your brand in many ways. They can also help you to learn more about your customers’ interests and preferences.
Here are a few examples of multi-action activities that you could include in your loyalty program:
Earn 10 points for every $10 you spend, plus 5 points for writing a product review, 5 points for referring a friend and 5 points for following us on social media.
Get a free coffee after completing 5 purchases.
Unlock a 10% discount on your next purchase after completing 3 challenges, such as watching a product video, signing up for the email list and creating an account.
Earn a chance to win a $100 gift card after completing 10 activities, such as taking a survey, visiting a store location and downloading the app.
When designing multi-action activities, it is important to make sure that they are relevant to your target audience and that the rewards are worth the effort. You should also make it easy for customers to track their progress and redeem their rewards.
For example, 19 Crimes has a unique loyalty program called Infamous Insider Rewards which focuses on member acquisition, advocacy and point burn.
Members are rewarded for a variety of different activities, not just purchases, like receiving 150 points for joining, taking a profile quiz to receive a free custom T-shirt or receiving points for taking polls.
They also can play “Words with Rogues” and watch video content featuring Snoop Dog, an infamous 19 Crimes partner.
Also, 19 Crimes allows members to redeem smaller quantities of points for unique rewards rather than only requiring large numbers of points for bigger ticket items.
Read more about the 19 Crimes Infamous Insider Rewards loyalty program.
Tiered Loyalty Programs Give Your Customers Attractive Options
According to the 2023 Loyalty Programs Data Study, one of the top five things consumers (34%) would love to see from brand loyalty programs are multiple tiers that better align with their shopping habits.
Members of tiered loyalty programs achieve specific status when they reach certain milestones. If you offer your customers a tiered loyalty program, you’ll broaden your reach to engage more customers.
According to our 2023 Loyalty Programs Data Study, 74% of consumers agree that they would engage more with brands that offered different tiers in their loyalty programs based on how much they spend per year.
In a tiered loyalty program, each tier reveals more attractive benefits that could be discounts, coupons, free items, gift cards or VIP experiences. The more members interact, the more rewards they’ll earn and the more engaged they’ll become.
When members achieve new tier status, they feel like they’ve accomplished something and want to keep that feeling. These programs are built this way to keep members engaged and involved for the long term.
Members love the feeling of exclusivity and don’t want to lose their status which is so important to them.
Earlier this year Best Buy launched three membership options in its loyalty program, My Best Buy Memberships™.
The three memberships are My Best Buy™, My Best Buy Plus™ and My Best Buy Total™. The first option is free while the latter two carry annual membership prices.
Best Buy officials wanted to offer loyalty tiers so their customers could easily find the best option for them.
My Best Buy includes free shipping with no minimum purchase, access to purchase history, online order tracking, up-to-date shipping information and quick checkout.
My Best Buy Plus ($49.99 per year) includes: everything My Best Buy members get plus exclusive member-only prices on thousands of items, exclusive access to sales, events and highly anticipated products, free 2-day shipping with no minimum purchase and an extended 60-day return and exchange window on most products.
My Best Buy Total ($179.99 per year) includes everything in the previous two tiers and Geek Squad 24/7/365 tech support, VIP priority support at any time and access to specially trained team members for advice, customer service and coordination via phone or chat.
They also receive two years of product protection, including AppleCare+, on most new Best Buy purchases, 20% off repairs and promotional service offers like discounted in-home installation.
Read more about the best tiered loyalty programs.
Design Your Loyalty Program For the Customer Journey
When you design your loyalty program from scratch or modify it at all, think about the entire customer journey to drive meaningful relationships and results.
To build lasting loyalty, all of your brand moments matter.
This is a more tactical piece for your brand because customizing the entire customer journey with your brand means you provide engagement pieces at every stop.
According to our 2023 Customer Engagement Data Study, 90% of consumers agree they’re more likely to engage with a brand if it offers incentivized engagements.
Make sure that the benefits and content you offer your program members create everyday value and utility that provide an end-to-end journey.
The key here is meeting your members’ needs at every stage of your relationship with them. This involves understanding your members, their goals and motivations and designing rewards and experiences that will be valuable to them at every step of the journey.
The stages of the customer journey include awareness, consideration, purchase and post-purchase.
For example, in the awareness stage, you could offer rewards for signing up for your email list or following you on social media.
In the consideration stage, your customers are looking for information to help them make a purchase decision. They are comparing different products and services and trying to determine which one is the best fit for their needs.
To help them at this stage, you can provide quality content that is relevant to your customers and helps them to answer questions about the product or service. This content can be blog posts, articles, videos or infographics.
Since the consideration stage is a key one, you could also offer free trials or samples of your products and services to customers who are still deciding whether to make a purchase. This gives customers a chance to try the product or service before they buy it.
At the purchase stage, you could offer discounts or free shipping.
At the post-purchase stage, you could offer rewards in exchange for product reviews or referrals.
If you engage your members with valuable rewards and benefits at every stage of their respective journeys, that will go a long way toward building lasting loyalty because it will increase member satisfaction, repeat business and brand advocacy.
Sephora’s Beauty Insider loyalty program engages customers at each of the four stages of the customer journey.
In the awareness stage, Sephora engages customers via social media where it shares beauty tips, tutorials and product announcements. It sends regular email newsletters with exclusive offers, new product announcements and other beauty-related content.
Sephora hosts in-store events such as makeup classes, makeovers and product launches.
In the consideration stage, Sephora provides customers with information and resources to help them make a purchase decision. For example, Sephora offers comprehensive product descriptions, including ingredients, benefits and customer reviews.
And Sephora’s virtual makeover tool allows customers to try on products online before they buy them.
In the purchase stage, Sephora offers a user-friendly website that allows customers to easily find the products they are looking for.
In the post-purchase stage, through Sephora’s Beauty Insider loyalty program members can redeem points earned from purchases for products, discounts and other benefits.
Sephora also sends post-purchase emails to customers with tips on how to use their products.
Loyalty Trends for 2024 All Point to Giving Members More Options
These trends will be very important for your brand in 2024 because your customers want better overall experiences and you want to provide them.
Given consumer fatigue over a lack of differentiation among most loyalty programs is a big opportunity for you to enhance yours so it stands out and becomes more valuable and compelling for your members.
Subscription loyalty and premium loyalty are ways to elevate engagement among your best customers and give your brand a recurring stream of revenue.
Motivate short- and long-term behaviors by allowing your members to engage with your loyalty program throughout their respective journeys.
Read more about how loyalty program differentiation is the key to increasing customer engagement.
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ebbo helps brands achieve their customer loyalty goals with full-service, end-to-end solutions and also creates original educational content straight from the experts to help loyalty marketers stay on the cutting edge of customer engagement.
