Why loyalty programs should be part of your marketing strategy
The customer life cycle has always included loyalty programs throughout history. The techniques used ranged from coin coppers, box tops, and green stamps to the complete digitization of the process through e-commerce and digital platforms.
The rewarding process has demonstrated its effectiveness over time , and it will continue to do so, for the below following 3 main reasons
#1Users are expecting it
It’s getting challenging for the brands to amuse consumers and provide new ways to create the “aah effect”, specially that users are expecting from the brand to provide loyalty programs within new approaches.
#2 Creating emotional ties
Rewarding behaviour fosters the development of emotional ties. Brands can build communities and turn it into a lifestyle by fusing the emotional connection with creativity.
#3 Gain new Consumers
By having a well-designed loyalty program with incentives to encourge consumers to recommend it to their friends and community, brands will not only retain existing customers but also use it as a potent tool to attract new ones.
Future of loyalty programs
With this renewed emphasis on digital transformation, loyalty programs have experienced a rise in popularity. The size of the global loyalty management market is expected to increase from $8.6 billion in 2021 to $18.2 billion in 2026, according to marketsandmarkets predications, thats why loyalty programs models are always emerging new tactics and strategies that suits the new generation.
Shifting toward more emotional loyalty strategy
While encouraging the customer to purchase and receive rewards for it is an effective way to retain customer, but it’s also important to foster emotional attachment . Which could be done by offering special access or rewards on significant occasions like a user’s birthday or commemorating their one-year platform anniversary, etc.
Immediate real time redemption
The future of loyalty programs, according to Malden Valdic, is to enable consumers to make frequent redemptions. Consumers don’t have to wait two months to receive their rewards; instead, brands can offer a range of incentives that can be redeemed right away. To avoid having to wait, users can choose to pay with points or receive an instant cashback to their credit cards as an example. Knowing that the new generation is expecting everything to be done in very quick pace that’s why including a prompt actions is the next big thing
Gen Zers (8 to 23 years old) are growing up in an online world of wide-ranging e-commerce opportunities and are accustomed to receiving instant gratification in ways not experienced by preceding generations,” describes Andy McCune, co-founder of Unfold®, the Instagram story template generator bought by Squarespace.
Interlink between rewards and fintech solutions
Credit cards or banking services will help in understanding the user behaviour by monitoring their habits and online transactional activities. By doing so it will allow brands to provide tailored made offers and rewards that interest the user . For example, if Sara is more into buying sports utilities, the loyalty program or offers will be related to sports wear.
Conclusion
To summarise, consumers are having too many choices and a variety of loyalty programs, but the only ones that will be successful and will retain and gain new customers are the ones creating a user centred experience in mind, thats includes real time redemption, custom made loyalty programs and emotional strategies
Resources:
https://www.fisglobal.com/en/fintech2030/experience/future-of-loyalty
https://rocketmarketinggroup.com/5-reasons-why-customer-loyalty-programmes-are-so-important/
