Five Ways to Boost Your Loyalty Strategy in 2024
Stay ahead, stay personalized, and watch your loyalty program thrive in 2024.
U.S. consumers belonged to 16.6 loyalty programs in 2022. In a world where customer loyalty programs often blend together, it's critical for businesses to stay ahead of the curve. As we step into 2024, we explore five key customer loyalty insights and how you can leverage them to create a standout loyalty experience.
#1 MIX TRANSACTIONAL AND EXPERIENTIAL BENEFITS FOR DIFFERENTIATION
91% of consumers say that too many loyalty programs feel the same. The key to standing out is incorporating the right blend of transactional and experiential benefits.
For example, Starbucks launched its Odyssey experience last year, an extension of Starbucks Rewards, that unlocks access to a range of benefits and experiences in which members can participate in through a series of interactive “journeys.” These experiences not only reward customers with points but also provide exclusive access to coffee tastings, events, and behind-the-scenes experiences. One of the first of its kind to leverage web3 technology, the well-known coffee chain adds a personal touch to the loyalty journey and has garnered early success.
#2 CONSIDER ADDING A PAID OR PREMIUM LOYALTY EXPERIENCE
A significant 60% of consumers spend more with a brand if they have a paid loyalty membership.
An obvious example is Amazon Prime, where members enjoy perks like free shipping, exclusive access to streaming services, and early access to deals, and spend more than double than their non-Prime counterparts.
But the e-commerce giant isn’t alone. Fast casual restaurants like Panera, whose Unlimited Sip Club offers unlimited coffees, teas and self-serve drinks, as well as free delivery, for $11.99 a month. And sweetgreen’s Sweetpass+ charges members $10 a month for perks like $3 off every 12 hours for orders over $9.95. These subscriptions do more than create a steady stream of revenue: they incentivize the frequency of in-store visits to increase foot traffic and average order value while being able to marry online and offline behavior through their mobile apps.
#3 MAKE EARNING REWARDS EASIER AND OFFER MORE REDEMPTION CHOICES
According to Loyalty Magazine, nearly half of consumers find it takes too long to earn rewards. Simplify the process and provide diverse redemption options.
Airlines often offer tiered loyalty programs where customers can earn miles not only through flights but also through credit card partnerships, dining, and shopping. Providing multiple avenues for earning and spending miles enhances customer satisfaction.
Take Delta, for example, who over the last few years have expanded its partner ecosystem to brands like Lyft, Starbucks, Turo, and Ticketmaster, allowing SkyMiles members not just to earn miles during their journeys but also to extend the brand experience to everyday activities, keeping them engaged and the brand top-of-mind.
#4 INTRODUCE TIERED OPTIONS FOR ADDED VALUE AND ENGAGEMENT
34% of consumers desire loyalty options that align with their shopping habits. Enter tiered loyalty programs.
Many retail and fashion brands often adopt tiered loyalty, where customers move up based on their purchase frequency or amount. Each tier offers exclusive perks, such as early access to sales, personalized styling sessions, and even birthday gifts, fostering a sense of exclusivity and engagement.
Sephora’s Beauty Insider program is a great example of this. Its three tiers are based on spend thresholds, but peppered into the customer experience are things like access to exclusive events, in-person events, first access to products, and gift cards and bolstered its customers’ brand love through creating its Beauty Insider Community where they can share tips, inspirational looks, ask questions, and recommend products.
#5 UTILIZE ZERO- AND FIRST-PARTY DATA FOR PERSONALIZED EXPERIENCES
A majority of online shoppers (62%) feel experiences that aren’t personalized result in a loss of brand loyalty.
Collecting and leveraging the right data to understand a customer's preferences can go a long way to tailor product recommendations, create highly personalized emails, target promotions and customize content, and enhance the overall brand experience.
As mentioned above, Sephora’s Beauty Insider Community allows members to set preferences, take interactive quizzes and surveys, and share beauty routines, all of which foster a sense of emotional loyalty allowing the retailer to create bespoke recommendations, inform product development and even deliver personalized in-store experiences.
Integrating these trends into your strategy will not only set your experience apart but also foster lasting connections with your customers. Stay ahead, stay personalized, and watch your loyalty program thrive in 2024.