Customer loyalty programs are incredibly powerful tools for revenue and brand loyalty. Around 52% of American consumers will invest their time in customer loyalty programs for their favorite and preferred companies and brands. Many customers love the rewards and benefits of customer reward programs, and unexpected rewards can maintain the loyalty of 60% of customers.
While these programs have huge impacts on how customers behave and interact with various brands, they also largely benefit companies. In 2020, the customer loyalty program market averaged around $3.3 billion in the U.S. E-commerce brands can see a 319% increase in orders after adding a customer loyalty program. Further, loyalty programs can increase customer spending since loyal customers will spend almost $700 each year.
However, to help maintain your customer loyalty and commitment to your loyalty program, you will want to stay on top of the trends for each coming year. Keeping up with customer loyalty trends will help you meet their expectations and increase satisfaction.
1. Moving to Digital
With the rise of COVID-19, the world has drastically increased its digital functions, especially when it comes to consumer spending. When stores closed down and people had to stay indoors, consumers turned to online shopping and services, changing the spending habits for many. For example, many grocery stores offered online food shopping where customers could select items and have them delivered to their doorstep.
As society opens back up again and consumers begin to start shopping in stores again, they still want some online features to support customer loyalty programs. Ninety-five percent of customers want to see modern technology like chatbots, AI and machine learning, or VR incorporated into their rewards programs. These features can help provide 24/7 customer service or personalized recommendations to customers, increasing their brand experience.
2. Increasing Cybersecurity
While many consumers are embracing modern technology and the new services it can offer, they still have concern for the security of their personal information. Customers are less likely to participate in loyalty programs if it collects personal data, like their account information or address.
Instead, they want any data collection to affect their rewards and benefits since 87% of customers are okay with data monitoring that results in more personalized content. Promising your customers strong security in your program while highlighting how it can increase customized care can help you assure customers as you try new virtual features.
3. Adding Additional Human Interaction
Machine learning, AI, and bots are helpful services that your customers can use when they need immediate or basic assistance, but they might not want to use them all the time. Customers look for brands with good customer service when determining their brand loyalty, so having real people running essential customer interactions is just as important as integrating new technology.
Having customer service and support run by real people is also essential for maintaining customer retention and increasing customer loyalty. Especially after the pandemic, people want to feel connected, and having real people who can sympathize and provide insightful solutions can help customers connect with your brand.
4. Improving Personalization
Customers want to see increased personalization in their rewards program. Personalization helps your customer loyalty program stay relevant to the customer and their needs. Relevancy especially is essential for maintaining customer retention since around 54% of customers will stop shopping with a brand if they feel rewards are irrelevant to their needs or shopping habits.
Monitoring shopping habits and collecting data can help you target rewards like coupons, partnerships, and services to the right customers — the ones who are more likely to invest and use those rewards. Customers like feeling like brands understand their needs, and a majority of customers feel better about brands that try to engage them with personalized content. When they feel you understand what they need, you can increase your brand image and reputation.
5. Establishing Emotional Ties
Part of building relevant, personal content with your customers is creating an emotional connection with them. Around half of customers are willing to switch their brand loyalty to companies that incorporate and address relevant customer needs into their services and rewards programs.
You can help set your company apart and increase customer retention by acknowledging and understanding what your customers want and then implementing it. Further, you can see an increase in revenue since customers spend around 27% more on brands when they have an emotional connection to them or their products.
6. Introducing Premium Tiers
Customer loyalty is about more than just choosing your brand over others. When customers are loyal to your brand, they are more likely to pay for additional services. Specifically, 37% of customers are willing to pay for premium loyalty programs for additional perks and benefits. Gen Z makes up a large portion of this group, with 47% of their generation willing to upgrade to paid premium programs for brands they love.
Your brand can increase its loyalty by targeting your rewards customers through paid content. Adding tiers for additional services or rewards can help your dedicated customers choose how they receive your goods or services. For example, many Spotify users pay for their premium service, which allows them to listen to music without ads and with limitless skips, allowing their most loyal customers to have an increased music-listening experience.
7. Incorporating Alternative Payment Methods
You can help your customer’s rewards program stay relevant by incorporating new technology, like AI and VR, and alternative payment methods. More people are investing in cryptocurrency than ever, and you can show your customers you care about their preferred payment methods by offering opportunities to use cryptocurrency. Your program can allow customers to use crypto at your various locations or convert points into crypto online.
Further, 78% of customers want to redeem points online more easily. Offering cryptocurrency conversions can give many people the chance to use their points in a relevant way. Many businesses also let customers make purchases with their points. Starbucks offers customers a free drink when they reach a certain point threshold, giving customers more freedom over how they use their rewards.
Integrate Payment Solutions Into Your Customer Loyalty Program With Hydrogen
Catering to your customer needs and listening to trends in customer service loyalty programs can help you continually improve your rewards programs for excellent and relevant customer care. When you understand what your customers want, you can help calm worries and increase your emotional connection, creating stronger ties to your brand over your competition.
As you begin to grow your digital services, you can integrate a single payment platform that offers a broad selection of services for your customers with Hydrogen. Our embedded finance solution can save your developers time and effort creating a payment platform from scratch, so you can have your services ready for customers in no time. Sign up with Hydrogen today and discover how our solution can help you engage with your most loyal customers!