5 Connected Loyalty Best Practices to Improve Customer Retention

From the early days of cutout coupons on packaged boxes to today’s sophisticated digital programs, loyalty has been a critical part of business success. Indeed, the time-honored practice of loyalty programs has helped many organizations attract and retain customers. But several changes to the market and customer behavior are contributing to the innovation of traditional loyalty methods. These factors include:

• Increasing access to the consumers across channels and consumerization
• Rising customer interest on experiential and personalized rewards, social consciousness
• Rising AI application to predict the customer intent
• Collaborations and partnerships expected to offer lucrative opportunities for market players
• Demand for advanced solutions to monitor customer and employee scores and enhance engagement
• Adherence to privacy pledges to establish trusted ecosystem
• Emergence of smart mobile applications

Today’s retailers and merchants can take advantage of mobile technology, data analytics, and digitization to create highly personalized rewards programs. These digital platforms help businesses keep up with the rising expectations of modern consumers. Customers are more connected than ever before, and they expect a seamless experience across all touch points. They are also more willing to share their data and preferences in exchange for a personalized experience that meets their needs and expectations. This means businesses should adopt a holistic approach to building strong connections with their target consumers and offer rewards beyond discounts. We call this connected loyalty.

What is a Connected Loyalty Experience?

Having a connected loyalty experience is the ideal state for brands, especially amid today’s unpredictability. Inflation has spiked in the broader economy that has led brands to devalue their loyalty currency. Connected loyalty not only provides end-to-end experiences for consumers, but also delights them with flexible programs and new reward categories.

For example, a connected experience of travel loyalty program should offer the following:

• Members should be able to book all components of travel without having to navigate to partner/supplier/3rd party agent sites. An end-to-end experience would include hotel accommodations, flight tickets, vehicular travel, non-property facilities, etc.
• Include lifestyle products and services including dining, live events, wellness programs, and other relevant rewards
• Above components should be available through the loyalty program with micro-redemption models

This will help brands to dig deep into the expanded touch points and transactions generated by the members to tailor the reward options based on their needs and preferences. With connected loyalty, brands need to make a paradigm shift to adopt connected partnerships and open loyalty storefronts that drive flexible redemptions and value to many; thereby enabling members to burn their hard-earned miles and build emotional connections.

5 Connected Loyalty Best Practices

Some of the best practices for launching a connected loyalty experience are outlined below:

1. Create Connected Partnerships: Unlock loyalty program value with likeminded partners. For example, Marriott Bonvoy offers its members the ability to earn points for stays at hotels like Delta, United and Emirates. Similarly, Hertz offers discounts on hotel stays for customers who rent a car through their partnership with Marriott Bonvoy.
2. Offer New Rewards: Companies should take a strategic approach to create unique moments of interactions to advance their loyalty offerings. Take IHOP for example. They launched “International Bank of Pancakes” offering guests the opportunity to earn digital tokens, called PanCoins, that can be used to buy more food. Guests can also trade their PanCoins in the “Stack Market” for use on other assets, including menu items and merchandise.
3. Embrace Personalization and Micro-Moments: As we navigate through a cookie-less world and place more emphasis on zero party data, delivering personalization at every micro-moment is important. Sephora’s loyalty program, Beauty Insider, does this very well. It uses customer’s purchase history and preferences to trigger real-time personalized recommendations and rewards.
4. Open Rewards Storefronts: Enable members to earn and burn their reward points at the point of sale, while enabling them to easily convert their loyalty currency to another. For example, with Amex’s Shop with Points program, members can redeem for Amazon purchases and enjoy benefits such as cash back or free two-day shipping.
5. Loyalty with NFTs: Embrace metaverse by extending Non-Fungible Tokens, crypto currencies, virtual experiences, and more while setting up modern loyalty platform. Budweiser, a global beer brand, has launched an NFT-based loyalty program called “King of Beers.” Customers who purchase Budweiser products can earn “beer rewards,” which can be redeemed for limited-edition NFTs.

Connected Loyalty for Today’s Connected Consumers

Connected consumers continue to demand experiential benefits and this will continue to put pressure on the loyalty program financials of many companies. With connected loyalty, not only can companies reach out to more members at scale, but also deepen emotional connections with their brands. This will pave the way to build long-term relationships with embedded brand purpose while tapping the social consciousness of today’s connected consumers.

Apexon with deep expertise in digital, data and experience engineering and having architected new-age loyalty platforms, can you help you transform your loyalty program that deliver value to your customers. This journey is an evolutionary path and Apexon with proven capabilities, can help you pivot your loyalty vision and bring to fruition with our proven accelerators and methodologies. To learn more, check out this customer success story or check out our robust retail services including loyalty programs.