By Emily Rudin, Senior Vice President of Client Success, CrowdTwist
Accelerated consumer trends and technology developments are creating a force for marketers to contend with or embrace. It’s important now more than ever for brands to be innovative and stay top-of-mind for their consumers. Loyalty programs are providing a mode of navigation for marketers seeking solutions to meet the evolving needs of their consumers. Brands are keeping in steps with these changes by introducing incentive-based programs that meet customers where they are and reward them for interacting on the channels where they spend time. Here are five loyalty program trends marketers are seeing in 2016.
1. Emergence of the Centennial
Centennials, otherwise known as Digital Natives and members of Gen Z, are turning 19. In addition to ascending the graduation podium, they’re leaping into greater buyer power. Currently, this group has about $44 billion in spending power, making this audience impossible for brands to ignore. This young generation is already beginning to stretch its limbs and explore brand preferences; it’s a crucial moment for marketers to capture the attention of this group and introduce it to loyalty programs.
Centennials are the true digital natives. Immune to traditional forms of advertising, they demand relevance, immediacy, and instant access to the benefits of being a consumer. Text and email discounts should be at the tip of their fingers, or it’s on to the next loyalty program. Additionally, Gen Z is all too familiar with the realities of limited phone storage. For this reason, Centennials prefer to download apps that fit into their daily habits and schedules. However, if you create a comprehensive loyalty program that fits with Centennials’ needs, you’re creating audience longevity—when this audience finds a brand they like, they tend to stick with it.
2. Growth of Philanthropy
Consumers value and admire companies that are willing to take a corporate stance on issues. A Nielsen survey found 50 percent of consumers would be willing to reward companies that give back to society. Access to clean water and sanitation, as well as the eradication of poverty and hunger top the list of causes consumers care most about, but brands are also identifying unique causes that fit in with their mission. Brands are also finding that consumers appreciate being included in social cause advocacy. Brands like Hand in Hand Soap and TOMS are weaving this affinity for giving back into their loyalty programs by giving consumers the option to donate to causes in lieu of receiving their own rewards.
3. Coalition Programs and Partner Rewards
Many brands are finding that partnerships with other non-competing brands can help support their customer value proposition. Coalition programs involve two or more brands that team up to launch a program and provide a wider array of benefits for consumers. Examples include Plenti, Upromise, and the Canadian-based Air Miles program. Members of the Plenti program can earn and redeem points from a variety of different brands including Rite Aid, Mobil, Macy’s, and Nationwide. Of course, a full-scale coalition programs isn’t right for every brand. Some companies find value in partnering with like-minded companies for one or two loyalty promotions or rewards. For example, customers can redeem points for an Apple Watch and Spafinder Wellness 365 gift card in the Lean Cuisine WellBeing program.
4. Personalizing Marketing Messages
Nothing happens inside of a vacuum, especially now that nearly all forms of communication have gone digital and social. People want to be recognized for their engagement across platforms. Personalization lets customers know that you’re paying attention to them and offering rewards and experiences that are relevant to your interests. So rather than throwing blanket offers at their audiences, marketers are refining their loyalty rewards programs to reward and engage customers for their specific actions.
Sephora’s loyalty program, Beauty Insider, has a twofold approach to this idea of personalization: it makes product suggestions based off customers’ prior purchases, and rewards for purchases. Personalization of this nature creates an opportunity to upsell and introduce your audience to new products they’re likely to be interested in. When integrating personalization into their loyalty programs, marketers should do thorough testing to ensure product suggestions meet customers needs, otherwise they risk turning away customers.
5. Mobile Will Become the Loyalty Platform
A significant amount of information and engagement power rests in consumers’ hands.
Mobile devices are nearly always on and accessible by consumers, and for many they’re even preferable to Point-of-Purchase human interactions. Mobile loyalty programs offer an added layer of consumer benefits, like geo-location discounts and offers. A CrowdTwist study found that 90 percent of consumers who used a mobile-based loyalty program said it was beneficial. The immediacy afforded by mobile creates a wealth of opportunity for brands with loyalty program apps.
In many cases, mobile has become the keystone for multichannel strategy. For example, the Pepsi Pass mobile app tracks and rewards loyalty members for social interactions, as well as visiting partner locations. When loyalty members see their progress toward earning rewards, they develop a greater appreciation for the utility of mobile app, decreasing likelihood of deletion.
Emily Rudin is the Senior Vice President of Client Success at CrowdTwist. CrowdTwist powers multichannel loyalty programs for brands such as Pepsi, TOMS, Purina, UFC, and Zumiez. Rudin leads the CrowdTwist team that is increasingly focused on strategic consultation, loyalty program management and personalized client support.