Given the demands of consumers, how can businesses ensure their customer loyalty?
In today’s dynamic, omni-channel, retail landscape, conventional customer engagement is not enough to attract and retain customers. The modern consumer is digitally savvy and expects a personalized, seamless omnichannel user experience. Brands have an increased baseline to establish a more personal connection with the customer than ever before. This new set of expectations has presented a unique challenge for businesses, to deliver engagement programs, with loyalty programs at their core, that stand the test of time and build a sense of connection with their customer.
The End of the One-Size-Fits-All Approach
Traditional loyalty programs that are mostly built on transactional rewards (also referred to as “hard benefits”) and generic discounts are struggling to keep pace with the requirements of customers. A study by Accenture Strategy concluded that about 78% of consumers are not satisfied with the current loyalty programs available in the market.
The general consensus was that they lack personalisation and any meaningful engagement. According to a study by Forrester, 67% of customers have also said they would switch brands for a better loyalty program. These statistics all point to one fact: the traditional one-size-fits-all approach is not meeting the demands of customers successfully anymore, and a hybrid approach, one which couples targeted hard benefits, with meaningful soft benefits (non-tangible benefits, such as priority service and early access privileges) may be the way forward.
The Pillars of Modern Loyalty
To thrive in this new era of customer loyalty, it is imperative for businesses to shift their focus to a more substantive approach.
1. Hyper-personalisation:
Include tailor-made rewards and experiences based on individual preferences and behaviour indicate to the customers that they are valued as individuals. This also further incentives customers to share accurate data that becomes the foundation for crafting targeted experiences.
A good place to start could be birthday discounts on favourite products. 48% of consumers are reportedly willing to share their age and birthday data with companies in exchange for more personalised experiences, according to a report by PWC.
Another good way to incorporate hyper-personalisation in your engagement strategy can be personalised recommendations based on purchase history and anticipated customer needs, with 71% of consumers expecting companies to understand their individual needs and preferences, according to this McKinsey report.
2. Engaging gamification of Transactions
Incorporating gamification features like challenges, leaderboards, badges and progress bars will very often lead to more active participation and excitement amongst customers and can increase client engagement by 47% and brand loyalty by 22%, according to this Snipp report.
Features like behind-the-scenes glimpses and early access to new products as rewards for reaching a milestone will also make customers more engaged with the brand.
3. Seamless omnichannel Integration
According to a study by PwC, 73% of consumers expect a consistent and seamless experience across all channels. Aiming to provide a smooth user experience across all customer touchpoints, from online stores to mobile apps to physical stores can drastically increase your customer engagement. The experience is further enhanced when advanced integrations result in real-time reward and point redemption.
4. Data-driven Insights
Leveraging real-time analytics to track and optimise your engagement strategies can help bring about an increase in sales of about 10% to 15%, according to a McKinsey report.
The Géant Model for Modern Loyalty Programs
Géant, a leading Middle Eastern hypermarket chain, embraced this shift in customer expectations through a unique customer loyalty program called “HappyMe”. Built on Microsoft Dynamics 365 and powered by Intwo’s CX and loyalty vertical, “Yegertek”, HappyMe aimed to focus on some key elements to enhance the customer experience. These elements included personalization, targeted rewards, gamified features and a custom built, user-friendly mobile app. The results were phenomenal.
- The app saw 170,000+ subscribers within 6 months of its launch, demonstrating the program’s relevance and appeal.
- HappyMe won the SL Award for Best Shopping App of the Year 2016, recognizing its innovative and engaging mobile experience.
- Géant witnessed an increase in customer engagement and loyalty, evidenced through an 18% increase in repeat purchases.
- HappyMe users had a 125% higher ATV than non-users, showing its success in terms of customer engagement.
- The operational efficiency improved through data-driven insights that optimised inventory management and marketing campaigns, resulting in a 10% reduction in operational costs.
Beyond Géant: Universal Lessons for all businesses
Géant’s success story is not an exception, this model of customer loyalty programs can be adopted by businesses of any size or industry. By keeping the cornerstones of modern loyalty programs like personalization, engagement, multi-channel integration and data analysis at the forefront, businesses can completely revamp their customer experience journey.
- Turn customer acquisition into customer retention through personalised offers and meaningful engagement.
- According to a study by Bain & Company, even a 5% increase in customer retention can boost profits by as much as 95%. This means that aiming to increase customer retention should be prioritised.
- Over time, your products and services will benefit from positive reviews of loyal customers through positive word-of-mouth and online reviews. Loyal customers are 70% more likely to recommend a brand to a friend, according to Bond Brand Loyalty Report.
Remember, loyalty is a journey, not a destination. To cater to the evolving needs of your customers, businesses need to continuously experiment, collect data and iterate on their program. Unlock the true potential of loyalty and build a future-proof business that thrives by placing the customer at the heart of your strategy.
Are you ready to transform your loyalty program?
Intwo is a leading partner for Microsoft Dynamics 365 implementation in UAE, with more than 1000 implementations in more than 40 different countries under our belt. Get in touch with us today and discover how we can help you build a modern, data-driven program that drives engagement, retention, and enduring customer and brand loyalty.
