This article below was written by our CEO, Tom Caporaso, and originally published as part of the Retail TouchPoints Customer Loyalty Benchmark Report in June 2021.
Even before the height of the pandemic, nearly two-thirds of consumers said their loyalty was harder for retailers to maintain than ever before. Then, COVID-19 pushed more people out of stores and into online shopping.
This shift made it even easier to find any product at the lowest price and raised expectations around BOPIS, curbside pickup, and the overall experience. Retailers will need to reevaluate their loyalty strategies to meet the rising demands of consumers in 2022 and beyond.
Loyalty Programs Will Need to Provide Faster Rewards
Earning rewards slowly after making purchases will become less effective. From streaming content to social media, your customers live in an instant world, and this includes loyalty programs.
Research shows that 86% of retailers that offer benefits within the first week say their loyalty program members shop at least once a week. And 60% of consumers say instant discounts that can be used whenever they shop would motivate them to join a premium loyalty program.
From free shipping to coffee upgrades, think of ways to reward your members with something they find valuable every time they engage.
Customers Want the Option to Choose Their Type of Brand Relationship
Many loyalty programs feel similar, but each brand has different types of customers. You can’t treat every customer the same with the same experience. The benefits not only have to make sense for your customer base but also different groups within your customer base.
That’s why more brands are offering premium loyalty programs where customers can opt in to pay for enhanced benefits. A premium tier could work with your existing loyalty program to offer the best of your brand for those who want that relationship.
When someone is in your existing program, it’s easier to demonstrate the value of a premium tier. And if a premium tier member feels they’d like to move to the free tier, they’re still in your ecosystem.
Sixty percent of consumers are likely to join a premium loyalty program if they already belong to that retailer’s free loyalty program and 95% of retailers with traditional programs are discussing launching a premium loyalty program this year.
Loyalty Programs Need to Evolve Over Time
Ultimately, the most important thing is continually optimizing your program. With the speed at which consumer expectations and needs change, you can’t set it and forget it.
Launch it, get feedback and results, and enhance it over time. The best loyalty programs have done this – Prime, Starbucks, and Target have all upgraded or relaunched over time based on member feedback.
What your customers value in 2022 will be different than in 2023, and so on.
Running a successful loyalty program going forward will take giving your customers what they value quickly, offering them a choice on the type of relationship they want to have with your brand, and keeping your program fresh and relevant.
Download the 2021 Retail TouchPoints Customer Loyalty Benchmark Report.