Each year brings fresh developments in the sphere of customer loyalty as a result of shifts in consumer behaviour, emerging technology, and external factors such as the economic climate and socially responsible endeavours, which is forcing businesses to rethink how to foster brand loyalty.
In this blog we explore the trends set to shape the customer loyalty industry in 2024.
Contents:
1) Instant everything - always on rewards
2) Brand partnerships with value-added customer rewards
3) Personalised customer experience
9) Sustainability and green loyalty
Customer Loyalty Trends That Will Define Success in 2024
1) Always-on rewards - Instant everything
Customer expectations of instant rewards have shaped loyalty programme trends. Modern technology has made us expect products to be easily accessible or delivered to our homes. People will continue to insist on getting their hands on everything immediately. To retain customers, offer loyalty members immediate and continuous rewards unrelated to their spending habits.
Customers expect to earn and use reward points quickly. This expectation applies regardless of how they shop. They may shop on mobile apps, in stores, or on websites. Customers will also demand access to live data and customer service chatbots that can answer their questions promptly. Immediate discounts or sign-up bonuses are excellent examples of how you can keep customers hooked.
For an analysis on Always-on-Rewards, download our Loyalty & Rewards Programme Guide
2) Brand partnerships with value-added customer rewards
One growing customer loyalty trend for 2024 is for businesses to form alliances or partnerships with reputable and like-minded brand partners. Loyalty partnerships are a cost effective approach to growing a brand through increased audience reach and access to new markets.
By pooling their respective strengths, partners in an alliance can develop products and services that not only meet but also surpass the needs and expectations of their customers. It helps you provide more to your customers in return for top loyalty. This is done through promotions and discounts from your brand partners. This expands your range and adds value.
You can increase brand loyalty, customer retention, and customer engagement by partnering with brands that can offer your audience extra value beyond your core products and services.
"It’s an exciting time for enterprise, mid market and SME brands to enter brand-to-brand partnerships, especially as technology is making the channel more accessible and more measurable"
Nic Yates, Head of Global Affiliate Partnerships at Silverbean (Global Affiliate & Partner Marketing Agency)
To help you get started with partnership marketing or revamp your existing partner programmes, we have produced a playbook to guide you through best practice when launching a partnership programme.
3) Personalised customer experience
Customers are placing a higher value on personalised experiences. This is not a new trend and shows no signs of slowing down. Customers now want businesses that can meet their needs and offer a special, safe and great customer service.
"71% of consumers expect companies to deliver personalised interactions, and 76% get frustrated when this doesn’t happen"
The first step in living up to these expectations is a customer centricity focus, recognising each consumer is unique. Because it takes time and effort to learn, marketers find customer behaviour and buying habits of loyal customers valuable.
That's why forward-thinking marketers prioritise providing constant, individualised service to their patrons via digital channels. Businesses can create a secure and welcoming environment when interacting with customers by understanding their wants and requirements. A positive customer experience creates more satisfied customers. With personalisation, each customer feels interaction with your brand is tailored to them specifically.
The future of personalisation lies in the use of technology to get a deeper understanding of consumers and offer customers relevant experiences and services that are tailored to their specific requirements. It also happens to be an excellent approach for fostering loyalty since the customer’s experience with your brand is a defining factor for repeat custom.
4) Tiered Loyalty Programmes
Customers are more likely to make purchases at your business when you set up a tiered loyalty programme because it encourages a competitive spirit in your loyal customer base, giving them a reason to aspire for growth on the loyalty ladder.
If you want to implement this tactic, make sure that the rewards and experiences offered at each tier of your loyalty programme are truly special and stand out from the "standard" benefits that customers expect. The result will be happier clients who are more connected and loyal to your brand.
With the incentive to level up and access better rewards, your customers will prioritise your brand over others. If done correctly, it will help you stand out from the crowd and become a consumer favourite.
Tiered loyalty programmes also help businesses quickly identify and categorise their most important consumers. If you segment your members into different tiers, you can use their purchase histories to provide them with personalised promotions and benefits.
When members achieve a high rank, they get recognition for their efforts. Sending a personal message as they progress between tiers is also important to keep them excited.
5) Gamification and unlockable rewards
Gamification is making waves in customer strategy and will continue to do so. Brands are carefully analysing potential approaches that create strong connections with customers as they seek to interact with them in innovative and relevant ways. Leveraging game theory to reach the target audience is one approach that is getting plenty of attention.
Getting a consumer to join a loyalty programme doesn't necessarily result in sustained involvement, which is the ultimate purpose of such programmes. In today's competitive market, a simple rewards programme isn't enough to inspire true brand loyalty.
This is where gamification can help.
"Gamification has been shown to increase trial usage by 54% and clicks to buy by 15% when used in customer engagement strategies"
Gamification of loyalty programmes, together with offering rewards for actions that are meaningful to customers, is an effective way to increase brand engagement. Customers are more likely to learn and explore when they are rewarded for doing so, and gamification can provide just that.
Customers will appreciate the effort and dedication when you use your loyalty programme to provide instant reward games like scratch to win, peel to reveal, or a reward calendar.
Customers develop a deeper and more profound emotional connection to your brand through a succession of gamified, relevant offerings and experiences that provide numerous ways to obtain different rewards.
5) Increasing use of AI
It's interesting to note that customer experience is where most marketers and companies intend to use AI. Increasing customer loyalty and involvement can be accomplished by focusing on improving the customer experience (CX).
"A Statista report on the factors likely to reshape and improve CX revealed that 45% of brands said that they thought artificial intelligence (AI) solutions would reshape their CX in the next five years.
AI is able to provide the technology and advanced predictive insights that are required to deliver an exceptional, hyperpersonalised customer experience"
It helps you develop a comprehensive marketing plan and personalised content for each stage of the buyer's journey. This can help you offer more value to customers and earn their loyalty.
In addition to powering chatbots, AI can keep track of all of your site's users' activities and establish behavioural patterns. Some customers may scan your services and products online and provide feedback and reviews. Others may perhaps go on to view subsequent pages or products and respond to them in different ways.
Deep learning algorithms track and log all of this activity. With this data, the deep learning models can evaluate the client persona based on their habits and preferences. In the long run, this helps you make crucial decisions for enhancing consumer loyalty.
It will also allow you to establish value-based customer loyalty programmes for different segments of your target audience. This strategy is beneficial as it helps you design tailored loyalty or incentive programmes that engage with each group.
Incentives and prizes can be dynamically served at tier, cohort, or individual user levels using machine learning and connected data sources to provide a relevant and personalised customer experience.
7) Programme automation
Programme automation emerges as a key trend that will continue to reshape customer loalty programmes. Automation revolutionises how businesses deliver tailored experiences across multiple channels.
Automation tools now enable customer loyalty programmes to transcend traditional boundaries. They offer seamless engagement between various channels. From AI-driven chatbots assisting customers to automated reward distribution.
With automation handling routine tasks, support teams can focus on more complex customer needs, ensuring a higher quality of service. Moreover, these automated systems facilitate the customisation of loyalty experiences, adapting to individual preferences and behaviours across diverse touch points. As a result, the integration of automation within customer loyalty programmes signifies a leap towards efficient, multi-channel engagement.
This will empower brands to deliver tailored experiences while optimising the role of their support teams.
8) Mobile wallets
People are increasingly relying on mobile payment options for their day-to-day purchases. It's no wonder that digital wallets are on the upswing given the increasing prominence of smartphone usage.
"The future certainly looks bright for the use of digital wallets. There were 2.6 billion digital wallet users globally in 2020, and this figure is set to reach 4.4 billion in 2025.
Companies are starting to leverage digital wallets to grow their customer base, customer loyalty and enter new market segments"
Financial IT
As time goes on, using a mobile wallet to make purchases and transfer money will become the standard. A mobile wallet is an electronic money account that can be loaded with funds and linked to other applications, such as rewards or shopping apps.
They are used to facilitate fast, risk-free financial transactions on the go. There's little doubt that a company's engagement and customer retention will increase dramatically if it caters to what its customers expect from their mobile wallets and loyalty programmes.
All customers want to make purchases without worrying about safety issues. Mobile wallets can offer that security along with easy accessibility.
The prospect of having their personal information stolen is a situation no one wants to experience. With digital wallets that don't save sensitive financial data, customers can enjoy that much-needed calm during transactions and will surely continue to patronise your brand.
9) Sustainability and green loyalty
Some businesses are still getting used to the idea that prioritising sustainable practices drives loyalty. You can gain the trust of your customers and build long-term connections by embodying sustainability as a brand.
More shoppers are putting the health of the planet first and expect the brands they patronise to do the same.
"Over 71% of British citizens agree that loyalty programmes should encourage or directly promote environmentally friendly behaviour among customers"
Mando-Connect + YouGov 2022
The Costa Coffee Club is the perfect example of such a programme. It rewards members for embracing sustainability, by making it easier for those using reusable cups to get free coffee.
Efforts to preserve the environment matter. Loyalty programmes have done exceptionally well by establishing prizes where members can donate to environmental charities and sharing vital information about environmental safety.
Simply saying your brand supports sustainable practices isn’t enough. Back up your words with actions.
Show your customers that you share their dedication by supporting and encouraging them to engage in sustainable activities. It helps you to create meaningful emotional connections and significantly improve the customer’s experience with your brand. Few things keep customers loyal to a brand like a shared purpose.
10) Rise of paid loyalty
A strategic shift to redefine loyalty strategies will propel a prevailing trend toward paid loyalty in 2024. Consumers will seek more personalised and exclusive experiences as companies reimagine traditional loyalty programmes that offer rewards with heightened value.
These paid programmes intertwine seamlessly with the purchase decision process, integrating incentives directly into consumers' buying journeys. By offering premium tiers and subscription-based models, businesses not only incentivise initial purchases but also cultivate ongoing engagement and brand allegiance.
- Consumers are twice as likely to spend more on brands with paid programmes.
McKinsey
The allure of these programmes lies in their ability to deliver a sense of exclusivity and enhanced benefits. In turn, this drives higher customer lifetime value and fosters a deeper emotional connection with your customers. Consequently, the trend toward paid loyalty programmes in 2024 reflects a strategic evolution aimed at influencing consumer purchase decisions through immersive, value-rich loyalty experiences.
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