How Loyalty Rewards Program Has Transformed Post Pandemic?
- Posted on May 10, 2022 by natalia
- Reading time about 6 minutes
The pandemic has impacted the various business sectors transforming the way people buy or connect with the brands. However, many business owners change their way of delivering services to adapt to the evolving customer needs and market demands. With the change in customers’ shopping behavior, your loyalty program software must evolve with the desired changes to make it a success for your business.
The research by Marketing Charts state that 78% of the customers have a preferred brand that regularly rewards them for their loyalty. Another recent research by Mckinsey says that more than 76% of customers have changed their buying behaviors and their expectations have increased too. Some of the top features that customers look for in their loyalty programs are omnichannel experience, personalization, experiential rewards, and gamification. In this blog, we will find out everything you need to know about changing loyalty program needs.
Building Strategy For New Customer Expectations
With the restrictions on physical movements, customers had no option other than engaging themselves with brands digitally using online platforms. Many local businesses even started adopting digital transformation for online shopping and customer interactions to meet the change in customer needs. A study by National Retail Federation shows that 49% of consumers purchased from local small businesses to support during the crisis.
The eCommerce sector witnessed the same rate of growth in just 3 months that would have taken 10 years otherwise. Customers today look for convenience, availability, and reliability when they interact with the brand. Gone are the days when customers only rely on big names, they are now turning to lesser-known brands but are readily available to offer good services at affordable prices.
What Changes Pandemic Brought to Loyalty Programs?
Before the outbreak of COVID, customers that were members of paid loyalty programs are the ones that belong to the older age group. With the pandemic, that has changed and the new Gen-Z customers are showing interest in loyalty programs of the brands they regularly interact with.
Customers now look for the brands that offer rewards simply for doing business with them, which is why businesses must revamp their loyalty programs with a multi-dimensional approach to cater to the changing customer behavior.
Talking about the loyalty programs, industries like travel and hotel are the ones that have been the biggest players in the market but with the pandemic, things changed tremendously. Not just in this sector, every loyalty rewards program in different firms need updates. Let’s discuss some of the common changes that most loyalty programs went through-
1. Always put customers at the Forefront
Your loyalty program is only meant to keep your customers happy and ensure that they stay with you for a longer time. Offering relevant rewards that they value and need is what makes them join the rewards program. Introducing improvisations from time to time is needed as per the situation and customer demands.
Many big brands like Hilton implemented changes post-pandemic by increasing validity to use reward points and reducing points needed to be a part of the elite community. All these moves show that Hilton has made its loyalty program customer-focused. Another example is the Hyundai assurance program that offers a solution of late payments for new buyers that lost their jobs during a pandemic.
2. Choose Collaboration with Different Industry
To cope with the evolving demands of the pandemic, brands from different sectors are collaborating on loyalty programs and gift cards to offer better and more useful rewards to customers. We have seen the example where travel and hotel collaborate and it was easy as both belong to similar fields. However, brands must now collaborate with programs from different industries to offer a seamless customer experience.
One successful example of such partnership loyalty programs is the loyalty program of Nike and Dick where both brands built a loyalty tie-up app for their loyal customers. Through this program, Nike aims to simplify points earning for customers that prefer offline experience. Not just that, Nike customers can even drop off returns with ease at Dick’s store.
3. Keep Personalization at Top Priority
Customers no longer want similar rewards, which is why offering rewards that they value the most is important to win their hearts and make your program a success. Offering rewards that customers want defines the success of a loyalty program. As all customers won’t value the same rewards equally, personalization is what you need.
One example is Starbucks’s loyalty program that offers hyper-personalized rewards based on behavioral segmentation that collects data on what customer is buying, where they are spending more, their shortlisted product types, etc. Starbucks segmented its target audience into smaller groups, as it is much easy to offer the smaller group a personalized experience.
4. Loyalty Programs for New Industry Sectors
Post pandemic, retaining customers for a long time has become a challenge for many industries. Now, brands in the healthcare, sports, and food sector are using loyalty programs as they play a great role in customer retention.
A famous food giant Mc Donald came up with a new loyalty program that is integrated into their mobile app. This helps in personalizing the buying experience of customers as they can easily track their orders, and rewards earned & redeem them anytime. Another example is the furniture brand, Skandium which introduces a tiered-based program to boost repeat purchases by offering access to exclusive launches.
5. More Growth in Paid Loyalty Programs
More than 60% of loyalty program members don’t mind paying extra to get exclusive rewards and higher points earned. With the pandemic, more people prefer premium loyalty programs of brands that offer experiential rewards not just rewards with monetary value. These types of programs help in building an emotional connection between brands and customers.
One example of AthletaWell’s community-based loyalty program is that it focuses on connecting members with one another to provide value and decrease the stigma around women’s well-being.
It is evident that the pandemic has brought a tremendous impact on every industry sector and has transformed the way loyalty programs work. Some of the best reward types are gift vouchers, experiential rewards, and contactless transactions. Ensure that you build the loyalty program that caters to the evolving customer needs with an omnichannel experience and personalized rewards.
Whether you want to go for a basic loyalty points program or an advanced program, connect with the experts of Novus to help your brand create a positive image and build stronger relationships with customers. Novus is the best loyalty solution provider that has empowered several brands across various industries to increase customer lifetime value with customized loyalty solutions. Get in touch today to build the loyalty solution of your choice.