This is the best time for brands to re-think their loyalty programs - here's why

Customer expectations have evolved. Has your loyalty program evolved with them?

By Michele Fitzpatrick, VP of global strategic services at Marigold

Today, consumers have asserted more control over their relationships with brands than perhaps at any other point in history based on their increase in digital connectivity.

They now have the power to demand what they want, how they want it, and when and where to get it. And the good news — in fact the great news — is that this offers brands an unprecedented opportunity to engage with customers in more contextually relevant ways and on their terms.

Yet, many brands find themselves struggling to keep up with this change in consumer mindset and behaviors, despite the fact that the solution to do so is likely already in their toolkit — the customer loyalty program.

According to our 2024 US Consumer Trends Index, 70% of consumers are more likely to recommend a brand if it has a good loyalty program.

But what defines “good?” Simply put, loyalty programs have evolved. New technology and evolving expectations mean that what worked even just a few years ago may no longer fit the bill.

So now is a prime time for brands to give their loyalty program a refresh to engage customers, and go beyond the traditional “get this for that” value exchange. Brands need to evolve their strategies and ideas to reinvigorate their loyalty program and get over this hump, taking into consideration both emotional brand connection and the transaction and programmatic aspects of loyalty building. Consumers crave a more personally relevant experience. And loyalty programs are a great way to build those connections.

To reset your approach to loyalty, you first need to understand the difference between loyalty as a process of engaging with customers, versus loyalty as a program offered to customers.

Loyalty as a process

Nurturing loyalty with customers starts with communicating with them using your existing channels, typically email. It begins with asking questions, recognizing behaviors, and responding with personalized and relevant offers and information. Doing this shows you’re listening, you care, and that you recognize each customer as an individual.

This is a process, a journey you take together with your customers, creating trust, loyalty, and engagement over time, and the payoff is building an emotional connection and brand love.

The emotional connection and trust you establish with customers is what motivates them to continue their purchasing behaviors and move through the customer lifecycle towards lifetime brand loyalty. It’s what drives brand loyalty and repeat purchases.

Loyalty as a program

A loyalty program is something more. It’s a transactional program — supported by a technical platform — of recognizing and rewarding consumers and their purchases. This takes the form of member reward programs designed to collect data, reward purchase behaviors, and drive transactions and repeat purchases.

The best such programs have both transactional and emotional components. It often starts at the transactional, through reward-based incentives like punch cards and points, as well as transactional incentives like personalized offers and promotions or retention campaigns.

To support transactional activities, the best loyalty strategies add features designed to learn more about customers’ emotional needs as well. Think polls and quizzes, sweepstakes and challenges, all designed to understand the customer better and create deeper engagement.

For instance, Great Wolf Resorts leveraged the Marigold Loyalty platform to introduce its first-ever loyalty program — the Voyagers Club. The program gave members the ability to earn one point for every $10 spent and redeem points on a 1:1 model. Shortly after launch, the company added other benefits like bonus deals and friend referral rewards. In just 12 months, 1.7 million members joined the program, which helped drive double-digit percentage growth in the company’s repeat rate, with Voyager Club members accounting for nearly 40% of all bookings.

With the information gained from these features, companies can then develop emotional loyalty between the customer and their brand, through such benefits as highly personalized product offers or experiences, exclusive access, and experiential rewards (luxury trips, etc.).

These two ideas — process vs program — don’t operate separately or in competition with each other. It’s not an either/or. It’s both. They work together. You first have to find your people and grow your customer list. Then you can get to know them better and connect with each individually by sending personalized content and relevant campaigns. Finally, you’ll turn customers into superfans through loyalty programs that keep them coming back.

The glue that holds both together is ingraining the concept of loyalty into your company culture. Every customer touchpoint, every sale, every channel of communication is an opportunity — in fact, responsibility — to develop and enhance emotional loyalty with your brand.

Loyalty refresh tips and tells

To determine if your loyalty program needs a reset, take a step back and consider the below points to re-imagine what it takes to earn customer loyalty today.

1. If you haven't reexamined or refreshed your program in the last 12 months, it’s time.
2. The buyer journey is self-directed. Make it easy for people to get what they want from you.
3. Don’t forget about the in-store experience. The consumer is omnichannel and digital is on the rise, but 75% of purchases still happen in stores.
4. Loyalty happens over time. It’s not a promotion or a campaign. It’s always on.
5. Different people want different things from brands. When you make it personal, you make it matter.
6. Personalization is important, but contextual relevance is critical.
7. The consumer experience needs to evolve to human experience. Consider your customers as people first, not just their experience in your store.
8. Loyalty fits within the larger context of relationship marketing and your overall brand. It should not be out on an island, but rather a critical element within the entirety of your customer experience and brand promise.

For more details, or to request a demo of Marigold’s loyalty features and capabilities, click here to get in touch.