RESOURCE CENTRE

Reimagine Your Brand Loyalty Program

Keep shoppers coming back with personalised experiences that drive lower costs and higher retention.

IN ARTICLES, GUIDES, COMMERCE, RETAIL AND CONSUMER GOODS

Time to read: 10 minutes

What does it take to earn customer loyalty in retail today? The answer is straightforward but difficult to achieve: Treat each customer as an individual, not a faceless number.

Loyalty transcends products and services: It creates an emotional connection between customers and the brand—one in which customers feel seen, heard, and appreciated. Customers who have an emotional connection to a brand are more likely to choose that brand regardless of whether a competitor offers similar perks or lower prices. Emotional loyalty runs deeper than points and rewards—it means consumers identify with, trust, and see a brand not only as something they consume, but part of who they are.

62% of customers say they feel an emotional connection to the brands they buy.

- State of the Connected Customer Report, Fifth Edition, Salesforce Research, 2022

Customers prize brands that cater to their needs by providing exclusive shopping events, tailored promotions, and seamless returns. These types of personalise experiences transform customers into vocal brand advocates, driving even greater reach and influence. And brands can take a cue from these customers to attract more people with similar values to boost acquisition and retention.

“We deliver relevant and personalise experiences. We know our guests, we anticipate their needs, and we deliver exactly what they are looking for.”

–Art Sebastian, VP, Digital Experiences, Casey’s

However, this isn’t the usual approach for retailers. Traditional loyalty programs are transactionally focused and impersonal—customers earn points, redeem rewards, and repeat the cycle. Often, programs that have evolved beyond rewards still struggle with true personalisation and engagement, which is a cornerstone of loyalty. Such attempts to engage with loyalty program members may lack contextual relevance, impacting your goodwill toward loyal customers. Additionally, it gets drowned out by the noise of competing messages. Today, earning customer loyalty demands more than a singular program based on tiers, currency, or points—it requires an overarching strategic initiative that drives engagement across all touchpoints.

Brands with successful loyalty programs embed loyalty across the entire organisation, from the frontline staff who bring the programs forward to the merchandising team that selects which products to include in a promotion. Free shipping, sneak-peek product previews, surprise-and-delight offers, exclusive access to VIP events, and personalise experiences all serve as levers to boost customer loyalty.

56% of consumers are more likely to buy from a brand with a loyalty program.

-State of the Connected Customer Report, Fifth Edition, Salesforce Research, 2022

It’s time for retail leaders to evolve their approach to loyalty, to better connect with customers and to realise the cost savings that comes from maintaining a legion of loyal buyers. Read on to discover:

How retail loyalty programs are changing
How to build an impactful, cost-effective data strategy
How to bring new experiences to market quickly for faster ROI

Chapter 1: How are retail loyalty programs changing?

Points and purchases are being replaced by emotions and experiences.

Today, shoppers are seeking genuine connections, expect personally tailored experiences, and are willing to engage in new and different ways to get them. This opens up an opportunity for brands to evolve their programs through the types of rewards received and ways consumers discover and interact with the loyalty experience. For example, convenience chain Casey’s is transforming how it does business by using data and digital channels to humanise its guests’ experiences, offering them customised giveback programs, loyalty rewards, and deeply personalise engagement.

“In order to modernise our brand, we’re using data and technology to build the right experiences,” said Art Sebastian, VP, Digital Experiences, Casey’s. “As marketers, our number one job is to build and deepen relationships with our customers, and we deliver that with relevant and personalise experiences. We know them, we anticipate their needs, and we deliver exactly what they are looking for.”

Brands must go beyond transactional loyalty to foster authentic, emotional connections. Consider the following:

73% of customers expect companies to understand their unique needs, and yet the majority still feel like just a number.

The majority of customers (65%) feel like they are treated like a number, not an individual. It’s time to right the ship. Thoughtful, personalise retail loyalty programs are critical in this effort. People love loyalty rewards, but simply offering a loyalty program is not enough. The goal isn't to get people to sign up, it’s to get them to take advantage of the benefits. This means the value of your loyalty program must be immediately apparent to each individual consumer. They need to be able to easily track and redeem rewards, and those rewards need to be personalise and relevant.

Engagement goes beyond purchases.

While transactional loyalty programs of the past were primarily concerned with points for purchase, today's loyalty programs have evolved into more nuanced levels of engagement. Today’s shopper wants brands to acknowledge and reward actions beyond a purchase. This includes things like downloading an app (57%) or writing an online review (47%). And, one in three shoppers is willing to go so far as to share the brand on social media in exchange for rewards. This is good news for brands. Consumers who tout brands on their personal social media accounts are identifying with the brand and are willing to vouch for that brand publicly, sowing the seeds for a long-term, emotionally fulfilling relationship.

Consumers are willing to exchange data for personalise offers.

We know that people crave more curated experiences, and the majority of shoppers are willing to share personal information like a birthday (67%), phone number (51%), or clothing size (47%) for access to more exclusive benefits. This is a huge opportunity for brands—a brand’s ability to garner zero-party data directly from its consumers cannot be overstated.

The evolution of customer loyalty demands that retailers ask themselves:

How do we drive value for our customers and our business?
Is it easy for customers to engage with our brand?
Are we offering something beyond a transactional experience?
Is our program personal, experiential, and fully integrated with the rest of our operation?

“We wanted our loyalty program to reflect our customers’ needs and provide them with more reasons than ever to spend their hard-earned money with schuh. Loyalty Management helps us understand customer purchases across stores and online, giving us the information we need to tailor our messaging and offers.”

–Paula Nicola, Head of CRM at schuh

A loyalty program should couple a demonstrated customer appreciation initiative with an overarching strategy that is just as much about keeping customers as it is about attracting them.

How can retailers evolve their customer loyalty strategy?

To keep pace with consumer expectations, loyalty programs should have a blend of rational and emotional benefits. Customers are willing to share information to receive personalise incentives and experiential rewards, especially Millennials and Gen Z. This value exchange drives some of the most successful loyalty programs today. For example, beloved coffee brands offer rewards for purchases, free birthday drinks, and surprise-and-delight offers on select days. Hotel chains make it easy to build and redeem rewards for free nights and additional surprises, and offer exclusive perks like early check-in, insider guides to the city, and in-room dining experiences. These experiential loyalty programs cater to personal preferences, which make each customer feel special and go far beyond the standard earn-and-burn of many retail loyalty programs today.

88% of consumers say the experience a company provides is as important as its products and services.

- State of the Connected Customer Report, Fifth Edition, Salesforce Research, 2022

Customers interact with an average of nine channels as they browse inventory, seek advice, and make purchases. Embedding loyalty throughout the customer experience helps brands make each touchpoint remarkable. That does not always mean spending more money—it can be as simple as more personalise marketing emails based on specific loyalty behaviour, access to premier customer service, or real-time offers on your ecommerce site. This enables retailers to focus on the relationship and nurture loyalty by creating connections at every interaction, whether that is online, in-store, or on mobile.

One of the UK and Ireland’s leading fashion footwear retailers, schuh, understood the importance of embedding loyalty in all customer interactions. With an online business and over 120 stores, schuh wanted to deliver a more personalise journey to its customers no matter where they shop.

“Loyalty Management allows us to create a loyalty program that we can configure according to our requirements and is flexible enough to introduce new tiers and rewards,” said Paula Nicola, Head of CRM at schuh. “We wanted our loyalty program to reflect our customers’ needs and provide them with more reasons than ever to spend their hard-earned money with schuh. Loyalty Management helps us understand loyalty customers' purchases across stores and online, giving us the information we need to tailor our messaging and offers.”