June 26, 2018
Consumers have more options than ever before. How they buy, when, where – it’s all optional. Given the number of choices, it might seem like a customer’s loyalty changes on a whim – but that’s not true.
Brand loyalty is alive and well, but the trends that shape brand loyalty are shifting. Everything from customers’ expectations to the tools brands need to keep loyal customers engaged is changing.
To stay ahead of the curve, here are five customer loyalty trends you need to know:
1. Personalization isn’t optional
For years, marketers have gradually shifted toward more personalized, 1:1 marketing tactics. Now, the shift is complete. You have to personalize your marketing efforts or be left behind.
Brands are now using data-savvy customer engagement programs to capture useful customer information and provide a way to send personalized messages and offer to specific customers.
If your business is sending personalized offers to loyal customers, kudos. If you haven’t jumped on the personalization bandwagon yet, make it a priority this year.
Fifty-eight percent of consumers say a personalized experience is very important when buying from a company, according to a report from Salesforce.
If customers don’t receive a personal experience, they have no problem taking their business elsewhere. Fifty-two percent of customers say they’ll switch brands if a company doesn’t make an effort to personalize their experience, according to the same report.
The best way to personalize messages is by leveraging the data you get from your engagement platform, which brings us to the second trend.
2. The demand for data continues to grow
Personalization and data are inseparable. You need data to send personalized messages.
Collecting data on your own can be a chore. Some brands use a variety of data collection methods. From email sign-up forms to surveys, information streams in, but it has to be stored and analyzed.
To streamline the process, companies are now relying on a centralized customer engagement tool that can capture data, measure it, and provide a platform to connect with customers all in one place.
What kind of data are brands relying on? Customer purchase habits are in high demand. Knowing information like customer spend, visit frequency and which store location a customer prefers, you can leverage that data to create relevant messaging and offers.
For instance, using data you see that James Smith faithfully comes in for a car wash every week. To reward his loyalty and keep him coming back, you can offer him a free wash after purchasing four in a month.
3. Consumers are willing to share personal details
Privacy is a hot topic, and customers want brands to take their privacy seriously. But, that doesn’t mean they’re not willing to share any data.
For years, small business owners assumed that asking customers about their buying preferences or tracking their spending habits was an intrusion. Fortunately, this trend is fading and giving way to a new group of companies that realize data collection is welcomed by customers.
Research shows customers are willing to share personal information. Take a look at the chart below that examines why consumers are willing to open up:
The primary reason consumers are willing to share data is to get offers or rewards based on their preferences. This further supports the need for a customer engagement platform that gives brands the ability to focus on personalization.
4. Punch cards are dead
A growing number of businesses are doing away with the outdated punch cards of yesteryear. The appeal of punch cards was their affordability. It cost very little to print a box of cards and buy a hole punch, but companies are realizing that there isn’t much benefit to them. In fact, there are more cons than pros.
Punch cards don’t provide any customer data. Some companies track how many offers are redeemed, but that’s not much of a customer gauge. Your best customers may have lost the card or don’t feel like the incentive is worth the hassle. Without data, you can’t identify your best customers, send targeted offers, or make real-time marketing decisions.
Given these downfalls, it’s not surprising to see companies invest in more robust customer engagement and retention programs.
Mixt, for example, used punch and plastic cards for seven years before realizing they didn’t have the data they needed to identify and connect with their best customers.
Since implementing Thanx, the company reaches out to their customers regularly. Now, repeat customers are coming back 54% faster than non-members, and 83% of customers remain active six months later compared to just 18% with plastic cards.
5. Brands offer rewards customers want
Brands are being more strategic with rewards. There’s a shift happening that leans towards offering innovative perks to your best customers versus offering steep discounts to the masses which eroded margins and attracted less valuable customers.
Why the shift? It appears brands are listening to customers. A recent survey showed the top reason customers abandon a loyalty program is because it took too long to earn a reward, according to Colloquy.
The Running Center, for example, offers $25 off a customer’s first purchase to anyone who joins their loyalty program. That’s a pretty big reward. What’s their reasoning behind it?
It’s easy for customers to order running shoes online. With an impressive reward, more customers buy shoes from the brick and mortar store versus online.
And it’s not just about offering big discounts or free products; more brands are offering experiences too. Customers might get a behind-the-scenes tour, access to after-hours shopping, or an invitation to an event.
It can be a challenge to create a rewards structure that provides enough incentive to keep customers coming back without eating into profits. However, incorporating customer experiences into the rewards structure can help both the brand and the customer. And with a data-based customer engagement platform behind the scenes, you’ll ensure you reward the right customers at the right time with the right reward. This model helps grow your business while increasing revenue and staying in the positive when it comes to ROI. A winning combo for both you and your customers.
As the buying experience evolves, so will customer loyalty trends. To retain customers, brands have to rely on customer engagement tool that helps them capture data, personalize messages and reward their best customers.
Learn more about how Thanx can help grow your business.