Transforming loyalty programmes through the power of data
Loyalty programmes aren’t just about accumulating points anymore. As consumers face more choices than ever before, anyone who offers a loyalty scheme needs to better understand customer needs and desires to deliver the right tailored-solutions to individuals.
Non-financial services players such as Apple, Netflix, Amazon and Spotify, which offer highly tailored experiences, are setting the benchmark for customer loyalty.
Brand experience was found to be responsible for 76% of a customer’s engagement levels, compared to just 24% generated by traditional “Earn and Burn” loyalty programmes, according to the 2020 Bond Loyalty Report, conducted in partnership with Visa.1 The loyalty solutions that drive brand experience are more reflective of the whole customer relationship, rather than simply rewarding transactional behaviour.
Consumers are simply underutilising their loyalty points. The average person holds £47 loyalty cash in their wallet, totalling £6 billion in the UK and $360 billion globally. Some loyalty programmes also do not offer sufficiently personalised offers to their customers and those that do can be easily replicated by other businesses.
“Understanding each customer's behaviour, needs, and aspirations must sit at the core of future loyalty solutions,” according to Alicia Ngomo Fernandez, Head of Visa Consulting & Analytics (VCA) UK & Ireland at Visa.
“Harnessing the power of data analytics to achieve targeted personalisation and segmentation can enable the personal, relevant, and timely connections customers are seeking and, in turn, drive sustainable and rewarding relationships.”
To find out more, read VCA’s recent White Paper Transforming customer loyalty through the power of data here.
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1 The Loyalty Report 2020, Bond Brand Loyalty, https://info.bondbrandloyalty.com/tlr-2020