The last couple of years has seen a great deal of change. The pandemic accelerated the shift to online platforms, and in our dynamically evolving world, consumers’ spending habits are now firmly rooted in digital.
According to McKinsey, 75 percent of US consumers tried a new shopping behaviour during the pandemic, such as a different brand, retailer, or website, with Gen Z and high-earners being the most prone to switching brands. What does this mean for brand loyalty?
As with any successful relationship, consumers want to see their favourite brands reciprocate with a relevant and exciting set of interactions. At a bare minimum, they expect a smooth and seamless experience. On a more advanced level, they anticipate being surprised and thrilled in a manner that engages them and keeps them coming back for more.
We should recognise that consumers now have access to a wide variety of products and services, as well as new perspectives on their interactions and brand experiences. Customers today are smarter and have higher expectations than before.
Relevance, exclusivity, and engagement are key ingredients for a successful loyalty programme in the new age. How can a company achieve a balanced approach to defining and delivering a targeted customer loyalty programme? There are several important factors that should be considered.
Machine learning and AI
Look at machine learning (ML) and AI as examples. When deployed correctly, these tools facilitate a greater level of personalised and curated customer experiences. Yet, for many consumers, human interaction is still essential. As a result, companies need to find the middle ground between the efficiency of ML and AI, and the value of human interaction.
For instance, a chatbot should be able to escalate seamlessly to a human interface whenever necessary. Aramex’s WhatsApp Business Bot gives customers a rich conversational experience with ease.
Since its launch, 50 percent of shipment enquiries have been processed by the chatbot solution and more than 8 million customers have been served. The company is revolutionising the logistics and transportation industry by blending technology, advanced AI features, and a seamless conversational flow that is more human-like than ever before.
Personalised vs customised loyalty rewards
Furthermore, it is no longer good enough simply to offer personalised experiences. Consumers today, essentially made up of the younger generation who are digital natives, also need customised experiences.
In personalisation, the brand predicts and recommends content and experiences based on data that has already been collected and analysed. Personalisation may be the way to appeal to a more mature audience.
In customisation, consumers are in charge, as long as they are given the freedom to make their own decisions. For instance, ‘video games’ are designed with the sole purpose to engage an audience. The model uses customer interaction data tracking to serve up the pre-determined layer characteristics, avatars, game challenges, enabling customers to make their own choices. This is the native, ‘gaming’ type of experience that Millennials, Gen Z, and of course, Gen Alpha – the customers of tomorrow – expect.
Relevant offers and extending reward networks
Many loyalty programmes use a partner ecosystem to allow members to earn or redeem points. Providing relevant earning, redeeming, and engagement solutions offers a broader choice of options and more relevant offers and rewards to drive further customer engagement, which leads to more profitable long-term relationships.
Case in point – Etihad Airways’ loyalty programme – Etihad Guest. It allows members to earn and spend ‘miles’, or points, with more than 900 partners across the UAE. The points system functions as a type of currency because guests can use them to buy a huge range of products and services and is dubbed by Etihad Airways as the “UAE’s most rewarding loyalty currency.”
Additionally, tracked past behaviours should be complemented with real-time information. While historical data allows companies to understand their customers better, real-time data makes it possible to respond to their current interactions immediately. The ‘wow’ factor of quick reactions based on real-time insights could add tremendous value to any loyalty programme.
Persona-led marketing
Customer segment-level marketing relies on data-mined customer profiles, which ideally use behavioural data to create groups topped up with attitudinal research and even third-party data to develop pen-portrait descriptive pictures of different customer audiences and how they behave and, to an extent, how they think.
However, we should not forget that a single customer may have different personas and needs in the same journey. Personas are significantly more difficult to map, understand, recognise, and respond to than customer profiles, but if used properly, they may result in higher customer engagement.
Personas are emotionally and behaviourally linked to the customer, and a loyalty programme must be able to determine when to employ either approach – to generate the optimal customer response.
Companies that wish to remain relevant must evolve their loyalty programmes in response to rising customer expectations and demands. To do so, they have to break their internal data silos and take advantage of these valuable, data-driven insights to deliver exceptional experiences across all channels.
Although data is crucial, so is treating the customer as a human, with meaningful interactions and understanding their emotional, not just behavioural, needs.