According to a new market research report from Markets and Markets, the loyalty management market is projected to grow from $1.68 Billion in 2016 to $4.59 Billion by 2021, at a CAGR of 22.2% during the forecast period, 2016 to 2021.
Rewarding customers for their loyalty continues to be a key strategy for business. Retaining customer is considerably less expensive that winning new customers.
When looking at your strategies for rewarding customer for their loyalty, it is critical that these strategies reflect the changing demands of the consumer and how they engage with their loyalty programme.
According to Oliver Wywan – “The future of customer loyalty”, standard customer loyalty schemes based on transactional rewards will soon be recognised for what they really are: undifferentiated, under-utilized, loss-makers.
Here are some interesting trends emerging:
When it comes to rewarding customers for their loyalty:
- There is a clear shift away from points to exclusive relevant promotions
- Personalised, non monetary rewards such as a free coffee or muffin are becoming increasingly popular
- Providing customers with the option to give their points to charities
- Rewarding customers with added value services such as personal shopper, VIP sections, after hours shopping
- Smart phone and devices make the provision for rewarding customers for their loyalty. Accessing a loyalty programme on the mobile is critical as is the ability to receive rewards and coupons on mobile devices. This provides for greater engagement and higher redemption of rewards
- Real time or time-limited offers are becoming much more common. For example, a fashion shoe retailer Meat Pack in Guatemala has GPS embedded into its app and tracks when users enter competitors’ stores. At certain times during its “Hijack” campaign, this triggered a promotional discount for Meat Pack, which started at 99% and decreased every second until the customer entered a Meat Pack store. The discount and subsequent purchase were then automatically shared on Facebook, sending the app viral
Rewarding customers for their loyalty should now include:
- Different ways of earning rewards from purchasing to social sharing to providing feedback on their experience.
- Other ways to collect points – not just Loyalty cards. Loyalty cards are seen as something of the past with apps including Apple wallet proving a great alternative to collecting points.
- More relevant and personal rewards .Companies need to be providing rewards based on consumer behaviors and using data analysis to determine this. This is central to rewarding customers for their loyalty.
- Rewarding customer across all their channels. This new Omni-channel approach to rewarding loyalty is expected from today’s consumer. According to DMNews, 53 percent of consumers feel that it’s important for retailers to recognize them as the same person across all channels and devices used to shop. 78 percent are also willing to allow retailers to use information from their in-store purchases to provide a more personalized experience.
- The ability to access a loyalty platform across multiple devices such as tablets, smart watches and other wearable devices. The easier it is to access a loyalty programme, the more successful a company will be in rewarding customers for their loyalty.
- Rewards for social sharing. By analyzing the social conversation across platforms, brands can respond in real-time with relevant content. For example, if there’s a spike in conversation about unseasonably warm weather in the area, a coffee chain could push a local campaign offering discounted iced beverages for the day.
- Make offers based on geolocation and customer activity. If a consumer is passing a retail outlet, that retail outlet can push out relevant offers to avail of immediately.