Customer loyalty is a number one priority these days. That’s because acquiring a new customer may cost you six times more than keeping the ones you already have happy. As more loyalty programs are implemented across different industries, they are becoming more and more complex and challenging. Companies spend a lot of time and money on launching loyalty programs and enhancing internal systems to cope up with every new launch. For instance, The U.S based financial institutions spends billions of dollars a year on loyalty programs, and that number continues to grow. According to SAS study, 95% of the population in the UK is a member of a loyalty programs and 90% of those people use the programs regularly. This provides a huge opportunity for technology providers to provide solutions for loyalty management. The following are the upcoming trends in the customer loyalty program that the industry is preparing for:
- Big data: Loyalty is not about rewarding what you think is useful but needful to customers. Loads and loads of structured, semi-structured and unstructured data are used to better understand customer behavior patterns and lure customers accordingly. Instead of asking customers to describe their preferences, which isn’t always genuine, systems can accurately ascertain facts by observing customer behavior. Mining customer behaviors on social media platforms like Facebook and twitter for example, can be instrumental in revealing data that shows the detailed preferences of individuals.
- Gamification: Gamification is a new mantra by itself. Gamification of loyalty programs is an absolute necessity to encourage deeper customer engagement. This can be achieved through progressive missions, leveling and goals. One can then create groups and competitions to unlock social status and rewards.
- Loyalty as a service: We now speak more on cloud these days and this provides huge potential to technology providers in helping their clients with customer segmentation, Trend Analytics, rewards rule engine etc., as a service on the cloud platform. Such that clients need not make huge investment in setting up the system.
- Real-time: There is a lot of push to execute loyalty programs in real-time so that customers are well informed on credits as they happen. This helps to drive customers to earn more credits. For instance, with SMS, rewards on a current transaction will be sent instantly to the customer, as soon as they swipe their card at the merchant outlet for the payment.
- Emerging touch points: Technology innovation, such as Smart TVs, smart watches and Google Glass, are opening new avenues for reaching customers. One can see credits earned on a smart watch that is hooked into Wi-Fi, while jogging and then use it to buy a drink at the nearest store.
- Seamless integration: Customers are looking for more and not just the redemption of rewards for cash/product. For instance, customers may transfer rewards to friends in other organizations. They may pay bills with the travel miles gained from airlines. In some western European countries, all loyalty programs and their event data are already based on the ISO8583 standard which compliments higher integration ratio.
- Activity based: Unlike traditional approaches, loyalty solutions may track non-transactional activities and unlock badges. Data from customer loyalty research firm COLLOQUY, proves that customers are increasingly favoring programs that reward activities rather than purchases. Organizations may reward activities like healthier lifestyle, social media sharing, participating in social responsibility programs, practicing energy conservation, etc.