Trends in Loyalty Promotions

Overview of Loyalty in Promotional Marketing

In 2024, we’ve been looking at trends in loyalty promotions and we’ve seen a significant shift in how brands are approaching loyalty programs. They’re not just about rewarding customers for spending money anymore. Instead, loyalty programs are becoming a central strategy that supports the entire customer journey—from the moment they first hear about the brand to when they become advocates. Brands are now incentivising customers to share their purchase intentions, refer a friend, or leave a review. These actions, which used to be challenging to encourage, are now much easier to implement and can significantly impact the business.

2024 European Consumer Trends Index research

The 2024 European Consumer Trends Index research by Marigold reveals some fascinating insights into what European consumers want from their favourite brands. A striking 87% of respondents say they want to be rewarded for their loyalty. This isn’t surprising given the current economic climate, where the Marigold study tells us 59% of consumers in Europe feel very pessimistic about the rising cost of living. As a result, 48% of consumers are doing more research to ensure products meet their needs before buying, and 44% are relying more on loyalty benefits than in previous years.

The same study shows that almost two-thirds of consumers (67%) consider the loyalty program of their favourite brand as either important or critically important to winning their lasting loyalty. This trend is leading to a decline in impulsive promotions at the point of sale, both in retail and eCommerce, in favour of promotions offering greater loyalty benefits. 40% customers said they were more likely to engage in a loyalty programme in 2024 compared to 2023, while only 7% are less likely to engage.

At Granby, we know it’s all about creating a more engaging and rewarding experience for the customer at every step. This has been made possible partly due to improvements in brands’ technical architectures and through partners, such as Granby’s investment in tech.

What do we mean when we talk about Loyalty Promotions

Points-Based Programs

Points-based loyalty programs are a fantastic way to keep customers engaged and coming back for more. At their most basic, every purchase a customer makes earns them points, which they can later redeem for rewards, discounts, or exclusive offers. It’s like turning shopping into a game, where the more they play, the more they win. This not only incentivises repeat business but aims to foster a deeper connection between the brand and the customer. By offering tangible rewards for their loyalty, brands can show appreciation and build a sense of community. Plus, with the right data, these programs can be tailored to individual preferences, making the experience even more personalised and enjoyable helping create a virtuous circle of loyalty and satisfaction.

A good example, running in the UK for a few years now, is the Waterstones Plus program. The Waterstones Plus loyalty scheme is for avid readers and frequent customers of Waterstones bookstores. By spending £1, members earn 3 Plus points, which can be redeemed in increments of 100 points for £1 vouchers. The scheme also offers exclusive benefits such as early access to sales, special promotions, and invitations to literary events like book signings and author talks. Additionally, members enjoy birthday treats and the convenience of choosing between a physical or digital Plus card, with the added bonus that their points never expire.

Tiered Loyalty Programs

Imagine walking into your favourite coffee shop and being greeted by name, knowing that your loyalty is not just appreciated but rewarded. This is the magic of tiered loyalty programs. These programs create a sense of progression and exclusivity, where customers can climb the ranks from a basic member to a gold or platinum status, each tier unlocking more enticing rewards and benefits. It’s like a game where every purchase brings you closer to the next level, fostering a deeper connection with the brand. The allure of reaching the next tier keeps customers coming back, not just for the products or services, but for the recognition and perks that come with their loyalty. This structured approach not only enhances customer engagement but also drives repeat business, making it a win-win for both the customer and the company.

Starbucks has designed a tiered loyalty program called “Starbucks Rewards” to cater to everyone from casual coffee drinkers to dedicated aficionados. Members start at the Green Level, earning stars for every pound spent and enjoying perks like a free birthday reward and mobile app convenience. Upon earning 300 Stars within a year, they ascend to the Gold Level, gaining a personalised Gold Card, the ability to redeem 125 Stars for free items, and access to double-star days. The pinnacle is the Platinum Level, achieved by earning 600 Stars annually, where members can redeem 150 Stars for free items and enjoy exclusive access to premium coffee and double-star days, along with exciting in-app challenges and promotions for bonus Stars.

Cashback Programs

Cashback loyalty programs are for the hunter gatherer customer! After all, a portion of what they spend will come back to them, almost like finding some hidden treasure. Cashback programs offer this delightful experience, turning everyday shopping into a rewarding adventure. Consumers buying a favourite regular purchased item or from a regularly visited store, then receive a notification that a percentage of their spend has been credited back to their account. It’s not just about making a saving; it’s about the sense of being valued and appreciated by the brand. This simple yet powerful incentive encourages customers to return, hopefully repeat times, fostering loyalty and creating a win-win situation for both the consumer and the retailer. With every purchase, the anticipation of earning cashback adds that small extra layer of excitement, making shopping more than just a necessity, and something approaching a rewarding experience.

Experiential Programs

We’ve noticed an interesting trend over the past five years: members are increasingly looking for experiential rewards—things that create memorable experiences and ideally connect back to the brand. Think about leisure activities, theme park tickets, gym memberships, or even exclusive access to special events. These kinds of rewards can be surprisingly cost-effective to deliver, yet they significantly boost the perceived value for consumers without breaking the bank.

The North Face has crafted a unique loyalty program called XPLR Pass that goes beyond the typical rewards system. While consumers still earn points for shopping, the program stands out by offering additional ways to accumulate points, such as attending special events, checking in at specific locations, or downloading their app. What sets XPLR Pass apart is how consumers redeem those points. Instead of just discounts, The North Face offers unforgettable experiences, like mountain climbing adventures in Nepal, turning loyalty into memories rather than just transactions.

Subscription-Based Loyalty Programs

Subscription loyalty programs are all about making your regular shopping experience even easier. Brand owners offer their customers look to add value to this, not just through an element of convenience but a sense of belonging. Customers now can look forward to a monthly box of specialist coffee or the latest skincare essentials, knowing that each package is curated with their personal preferences in mind. These programs go beyond mere transactions; they build a relationship, a rhythm of trust and anticipation. With every delivery, the brand reaffirms its promise to understand and cater to the consumer’s needs, making them feel valued and appreciated. It’s not just about the products; it’s about the experience, the consistency, and the joy of being part of something special.

You may not think of it as a loyalty program but it definitely is. Amazon Prime is a subscription-based loyalty program offering a plethora of member benefits. Subscribers get fast(er) and free shipping on many items, including two-day, same-day, and even ultra-fast delivery options. In addition to shipping perks, members gain access to Amazon Prime Video, as well as Amazon Music. Other benefits include borrowing e-books through Amazon Prime Reading, and early access to new product launches.

Gamified Loyalty Programs

A gamified loyalty program spices up traditional loyalty schemes by adding game-like elements. Instead of just earning points for purchases, consumers engage in interactive activities, challenges, or missions to earn rewards. These can include tasks, milestones, or brand interactions via social media or apps. The aim is to make earning rewards more fun and engaging, boosting customer retention and brand loyalty.

Asda looked to revolutionise its loyalty program by incorporating gamification, making “missions” the heart of the experience. Instead of earning points, members complete missions to accumulate virtual money in their cash pot, which can be exchanged for Asda Points vouchers to spend in-store and online. Members enjoy extra rewards on favourite products, milestone rewards by scanning their cards, and an instant 10% cashback on Star products. This unique approach significantly boosts customer engagement, looking to set Asda apart from traditional retail loyalty programs.

Loyalty Messaging

We think it is also valuable to touch on how important it is for brands to deliver the messages consumers want to hear. Findings from the Marigold study show that 85% of consumers say their favourite brand treats them as individuals. This means getting the basics right, yes, it means using their name and knowing their shopping history, but also understanding how they want to be communicated with and what they’re genuinely interested in.

Almost 80% of consumers say they’re likely to engage with a personalised offer based on their interests. So, it’s definitely worth getting to know your customer! By delivering the right messages and using the most appropriate promotional techniques, brands can create a much more personalised and engaging experience for their consumers.

Future Trends in Loyalty Programs

AI

We’ve been looking at the role of AI in loyalty promotions lately, and it’s pretty fascinating. While generative AI might be great for productivity challenges, loyalty programs don’t face challenges that other technologies can’t solve. However, predictive analytics may soon be a game-changer. Imagine being able to better profile customers to improve personalisation or align the targeting of offers to maximise ROI. Small percentage gains in these areas can translate to millions in revenue.

It’s worth noting, though, that AI is still in its early stages. Many brands’ technical architectures aren’t flexible enough yet to fully capitalise on this technology. But as we move forward, the potential for AI to revolutionise loyalty programs is huge.

Sustainability and Ethical Considerations

Environmental concerns and sustainability issues are increasingly shaping the future of loyalty programs. As consumers become more eco-conscious, they expect brands to reflect their values, including sustainability. Many loyalty programs are now offering eco-friendly rewards, such as discounts on sustainable products, donations to environmental causes, or carbon offset credits.

Companies are also integrating sustainable practices into their schemes, like replacing physical cards with digital ones for digital promotions to reduce plastic waste and rewarding customers for sustainable actions. Transparency and accountability are becoming crucial, with consumers demanding more information about the environmental impact of their purchases. Additionally, loyalty programs are focusing on educating members about sustainability and creating communities for sharing eco-friendly practices.

Here at Granby, as a business working at the leading edge of logistics, we’re acutely aware that our activities might have a negative impact on our environment. And that we have the power to use our experience, knowledge and partnerships to influence positive outcomes. As such, we build best practices into every program. You can read more on our commitment to the environment in our latest Carbon Footprint Report.

Loyalty Coalition Programs

For the past two decades, coalition loyalty programs have been a cornerstone of loyalty marketing. Although their popularity has waned slightly over the last five years, industry experts are predicting a resurgence in 2024. Take Nectar, for example, which has seen fluctuations in its engagement. However, AirMiles is actively expanding its coalition network with new global partners.

In a recent interview with the Toronto Star, Air Miles’ Shawn Stewart highlighted the benefits of coalition models, stating they help businesses “…access new customer bases while keeping the costs of running a loyalty program lower.”

For brands considering joining any coalition program, it’s important to note that they typically won’t own the majority of the customer data. Additionally, these programs often favour frequent customers, leaving less frequent customers with minimal loyalty benefits.

Despite these challenges, as brands continue to seek cost-effective and low-risk methods to boost customer engagement, interest in coalition loyalty programs is expected to rise throughout 2024 and beyond.

Granby’s End-to-End Digital Solutions for Loyalty Programs

SwiftReceipt: Simplifying Customer Engagement

We have seen thatthe quicker, and more seamlessly a consumer can interact with a brand, the more likely they are to stay engaged and loyal. Why? This not only enhances their overall experience but also increases the chances of them becoming advocates for the brand. Plus, it allows brands to gather valuable data and insights, which can be used to further personalise and improve the customer journey. In the end, it’s a win-win for both the customer and the brand.

At Granby, we use our own developed SwiftReceipt tool to help our clients maintain this close relationship. SwiftReceipt helps in creating and managing effective loyalty programs that drive customer retention and brand loyalty.

First off, SwiftReceipt is our proprietary purchase validation tool, and it’s a game-changer. Imagine this: a customer makes a purchase and wants to redeem a reward. With SwiftReceipt, the proof of purchase is validated instantly. This means customers get immediate satisfaction, which significantly enhances their overall shopping experience. No more waiting around—just instant gratification.

But that’s not all. SwiftReceipt also makes the redemption journey incredibly quick and easy. Customers today crave immediate fulfilment, and SwiftReceipt delivers that. It’s all about meeting expectations and keeping them engaged with the brand.

One of the standout features of SwiftReceipt is its ability to maintain robust campaign integrity. By reading and validating receipts in seconds, we can be sure of instant communication with customers. This not only keeps the customers happy but also upholds the integrity of the brand and the whole promotional campaign.

Plus, our API integration capabilities mean SwiftReceipt can easily connect with essential systems like WooCommerce, Shopify, and Magento. This gives our clients full control and visibility of crucial data, making the whole process seamless.

Handling and fulfilment of Loyalty Programs

Granby excel at enhancing the customer experience through the effective handling and fulfilment of loyalty programs. First off, when it comes to order processing, Granby has it down to a science. Orders will come in through many and varied routes—whether it’s an API from platforms like Magento or Shopify, a bespoke client API, an SFTP direct from the client, or through own OrderSure system. Once customer orders are received, our experienced operations team gets to work, picking and packing the orders with precision.

The despatch process is equally robust. Granby works closely with multiple carriers and an established pallet network to ensure any orders are delivered efficiently. Granby’s own Warehouse Management System (WMS) is quite sophisticated, generating consignment packing instructions, determining the optimum consignment weight, and selecting the best despatch methods. This ensures that every delivery is as efficient as possible.

What really sets Granby apart is our end-to-end management and client visibility. We manage the entire journey from the moment goods come in to when they reach our clients’ customers. Throughout this process, our clients have full visibility and control, making the entire handling and fulfilment experience seamless and efficient.

In a nutshell, Granby’s approach to fulfilling loyalty program orders not only enhances the customer experience but also provides clients with the reliability and transparency they need. It’s a win-win for everyone involved!

Maintaining Client-Customer Relationships

At Granby, as an Employee-owned Trust, we put people at the heart of everything we do. And so, for us, the importance of maintaining strong customer relationships is always mission critical, especially when it comes to loyalty programs. And the Marigold study backs up what we know, more than 70% of consumers across Europe say that customer service and support are either important or critically important to maintaining their loyalty. After all, a staggering 91% of consumers state that their favourite brand provides a consistent experience, regardless of where they interact with it.

Victoria Pittman, Head of Client Services and Business Development says, “At Granby, as an Employee-owned Trust, we put people at the heart of everything we do, ensuring strong customer relationships through our multi-channel customer service team and SwiftReceipt, which provide comprehensive support and a consistent experience, fostering lasting loyalty.”

That’s why our multi-channel customer service team, supported by SwiftReceipt, is dedicated to offering comprehensive support through email, voice, and live chat. This ensures that our clients’ customers receive the best possible service, enhancing their overall experience with our clients’ brands and fostering lasting loyalty.

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Images

Amazon Prime – https://commons.wikimedia.org/wiki/

Asda – https://groceries.asda.com/

Starbucks – https://www.starbucks.co.uk/rewards

The North Face – https://www.thenorthface.co.uk/loyalty-programme.html

Waterstones – https://www.waterstones.com/plus

Other – Granby