Hearing from brands who are innovating in the customer loyalty space is always a pleasure. Our team was recently at the Loyalty Expo in Orlando, FL and gathered some great insights (see insights from Day 1 and Day 2) and made a lot of great connections. To pay it forward, here are six trends we picked up at the summit that you can consider for your customer loyalty program.
6 Trends for Customer Loyalty Programs
1. Strategic improvement of use cases with data gained from loyalty members
Companies are able to utilize the customer feedback and data from loyalty programs to improve their businesses in ways that would have been harder without a direct line to customers.
- Travelers insurance is more able to accurately price riskier drivers
- Tim Hortons decreased drive through time using loyalty member IDs + payment QR scans
- Lego has a better understanding of customer lifetime value (CLV) and learned that mid-engaged customers can be jackpot for them
- Margaritaville data showed that 60-100K of their customers had RVs --> so they built RV resorts!
2. Creating unexpected partnerships for a win-win-win
Finding interesting partnerships can surprise and delight your members, while also introducing your program to a partner’s audience.
- Ulta at Target with the future ability to earn both Ultamate Beauty and Target Circle points at the same time
- Sonesta with pet-related services, differentiating themselves as a pet-friendly hotel
- Sleep Number partnering with the NFL and emphasizing the importance of sleep for athletes
3. The shift away from discounting, especially in commoditized industries
Customer loyalty programs allow companies in commoditized industries to move beyond price reductions by providing relevant rewards.
- Thriftbooks stopped giving out discounts but rewards members with free books. Discounts were killing them since their average product value is around $4
- Noodle & Co, offers first-access to new menu items showcasing the variety of flavors and noodle types
4. Using loyalty program and its perks as drivers/boosters beyond just “marketing”
Loyalty programs, and the associated perks, can drive more product usage or discovery.
- Margaritaville – free drinks lead to more appetizer purchases and further engagement on premise (which makes franchisees happy)
- Hilton Hotels – surprise and delight automatic upgrades for rooms for gold/diamond guests provides a better experience and also reduces time and effort for front desk workers
- Certified Angus Beef – loyalty program helps small farmers who’ve worked hard to make their beef certified angus, help customers discover the beef, where to buy, how to cook, and earn points for engagement
5. The customization of the underlying solutions to best serve customers’ needs
Building out their products in a way that allows for very specific and granular ways of engaging with the company.
Some examples include:
- Thriftbooks built out its own recommendation engine that goes beyond simply matching readers with genres
- Kampgrounds of America has its own reservation system that can accommodate for variety of stay options/experiences
6. The growth of paid loyalty programs
Some programs are making the leap to paid loyalty programs. Adding bigger rewards, but requiring payment for membership.
- KOAs program was paid from the start and that required them offer interesting enough incentives for users to pay
- Other programs offer a premium version – e.g. US Enfamil has a paid premium version. Restoration Hardware is another example
- The benefits within paid programs tend to draw customers back for ancillary services, like REI's membership, which gives you free bike tune-ups
For loyalty programs to succeed and to keep growing and adding value (to both customers and to the companies’ bottom lines), creativity and innovation are required. Learn from these customer loyalty leaders and consider how you can improve the engagement between your company and your most loyal customers!