Friday, June 21, 2024

Loyalty programs need to evolve, says expert

Loyalty programs that fail to innovate, risk becoming obsolete as consumers are likely to gravitate towards brands that offer more relevant, engaging, and convenient experiences, says Anurag Vasisth, Co-Chair and Group CEO, Loyalty Now.

Australian businesses must continuously innovate and adapt to keep pace with consumers’ changing behaviours, he adds, noting the growing importance of frictionless experiences and hyper personalisation.

“As consumers increasingly embrace and become accustomed to seamless digital experiences, particularly using their sophisticated handheld devices, their expectations for seamless digital engagement expands to their shopping experiences, both in-store and online,” he said.

The changing competitive retail landscape is also intensifying, with new entrants often using cutting-edge technology to capture market share.

“Established brands must continually update and reinvent their loyalty programs to retain their customer base and attract new customers,” Mr Vasisth said.

“This might include using AI to predict consumer behaviour, offering dynamic personalisation, or integrating loyalty rewards across a wider ecosystem of services and products. Keeping loyalty programs aligned with the latest consumer trends and technological advancements ensures that brands remain relevant and top of mind for consumers.”

Hyper personalisation is one of the biggest attractions for retailers shifting from traditional loyalty programs to digital solutions, as it lets businesses deliver tailored experiences and offers to customers based on their purchasing history and preferences.

“Customers expect brands to understand their needs and preferences and to reflect this understanding in every interaction,” Mr Vasisth said. “Traditional loyalty methods, which tend to be generic and broad, are rapidly being outpaced by digital solutions that leverage data analytics to offer a personalised shopping experience.”

Digital loyalty programs can be integrated into mobile applications, providing a seamless way for customers to track loyalty points, receive updates, and redeem offers from the convenience of a mobile device.

“Businesses that invest in digital loyalty programs can offer customers instant rewards and recognitions, unlike traditional programs that often require long periods to accrue benefits,” Mr Vasisth said.

“This immediacy aligns with the expectations of modern consumers who are accustomed to fast services and quick responses in other facets of daily life.”

Mr Vasisth says digital loyalty programs offer significant value in the current economic climate, where many consumers face financial pressures.

“These programs provide opportunities for savings at the point of sale, which can alleviate some of the burden customers feel due to rising costs of living,” he said.

“These programs help in developing sticky customer relationships by offering tangible benefits, as customers are more likely to frequent businesses where they feel their dollar goes further.”

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