Is Consumer Loyalty Possible in the Digital Age?

According to research by Accenture Strategy, 71% of loyalty program members claim that loyalty programs do not engender loyalty, and 77% admit that they retract their loyalty more quickly than they did three years ago. As a brand or agency, should we give up on the idea of a consumer loyalty scheme? Or does this mean we don’t understand rapidly evolving consumer behaviour?

The way consumers interact with brands has shifted from a one-way broadcast to a two-way conversation, and consumers today have high expectations of brands to deliver an up-to-date multi-channel technological experience.

Brands should now realise that loyalty isn’t measured by the volume of consumers sitting on banked points indefinitely, in itself a liability, but in the activity around earning and redeeming. Engaged and profitable consumer-brand relationships are possible, but require agile business models, innovative listening technology, and comprehensive consumer data.

Any brand, marketing, shopper or loyalty agency interested in rewarding loyal consumers should be aware of the following key shifts in the market:

Get Personal

Marketers should study their prospect base, identify customised buyer profiles based on behaviour patterns and then develop highly targeted positioning strategies. Technology has allowed consumers to access information in seconds, and has created a demand for responsive communication between the brand and the customer.

Cloud computing and artificial intelligence have elevated customer experience to allow for personalized information exchange, which consumers now expect with every brand interaction. A Red Dot Research study found that twice as many 18-24 year olds than 45-55 year olds have higher expectations of retail delivery performance compared to two years ago.

Don’t Limit Your Rewards

According to EY, the percentage of consumers who take advantage of discounts or coupons has steadily declined since 2012. Coupons aren’t appealing enough as ecommerce eclipses traditional purchase methods; free shipping, on the other hand, is a clear purchase driver.

Move Quickly

Traditional business models prevent brands from making agile marketing decisions to adapt to the rapid pace of change in the digital marketing space. Businesses must make strategic changes to consumer research and marketing strategy to effectively communicate with an evolved consumer. 51% of US consumers are more loyal to a brand that innovates and provides up-to-date technology to enhance the brand experience.

Use Social Media Data

Social media contains a wealth of insights and data on consumer behaviour, preferences, and purchase decisions, yet 70% of companies are not collecting data from social channels according to DMA, which is a missed opportunity. Accenture’s research found that more than half of loyal customers actively recommend brands to others, and 14% express their brand loyalty publicly through social media – use social media to your advantage.

Make Loyalty Simple

Loyalty programs should be made simple to encourage adoption and frequent use. From the first touchpoint and enrolment to reward redemption, the process should be a clear, simple, and enjoyable one for the customer. Complicated points systems can be perceived as a sneaky way to encourage mindless purchases with no real benefit to the customer.

Considering a loyalty offering within your company or think your current programmes may be in need of a refresh? Feel free to get in touch.