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Achieving the Evolving Duality of Loyalty and Loyalty Programs

April 1, 2024
By Geraldine Szabo and Tricia Moore

Loyalty as a shared belief system

In the dynamic world of retail, loyalty transcends mere transactions. And so should a brand’s loyalty program. Consumers have progressed from simply accepting “buy 10, get one free” promotions to expecting a nuanced relationship between brands and consumers—a dialogue built on shared values and fueled by the infinite wisdom of AI.

It is no longer enough for generic loyalty programs to treat every customer like a clone in a factory line. Today, AI takes center stage, becoming essential to crafting personalized experiences for each customer. AI analyzes customer data not just for the sake of analysis, but to help brands craft impactful experiences that resonate with target consumers. Imagine a brand that understands you better than you understand yourself, suggesting products and services that align with your deepest beliefs, greatest needs and biggest desires.

In this paradigm, loyalty becomes a love affair between brands and consumers. Brands offer personalized offers and recommendations, while consumers feel understood, cherished and valued. It’s a harmonious union, with AI acting as the cupid, armed not with arrows, but algorithms.

Yet, brands must heed a cautionary tale: loyalty is a fickle lover. While AI can enhance experiences, authenticity remains paramount. Customers can discern sincerity from artifice, and no amount of fancy algorithms can mask insincerity. Brands must infuse charm with authenticity to seal the deal in attracting consumers to join and use their loyalty program.

… But one that needs to strike the right balance

In this delicate dance of data and desire, brands must strike a balance between personalization and privacy. Respect for boundaries and trust-building are imperative, for loyalty thrives on mutual respect, and therefore so does the success of a brand’s loyalty program. Some of the top retailers and QSR’s have seen success in offering personalized perks, making each interaction feel like a special indulgence tailored just for the customer, while not going too far as to make the personalized experience feel too nosey or invasive.

Because at the end, loyalty is rooted in belief

Genuine loyalty goes deeper than just transactions or promotions, and a loyal, repeat customer can have an impact on your business. It’s about a brand’s message resonating with what their target audience truly believes in and allowing their purchase to become a statement. If the brand doesn’t have a clear identity, and their loyalty program isn’t ultimately rooted in better serving that identity, then loyalty just becomes another sales tactic—and that’s a whole different story.

In summary, here are three key takeaways for marketers to stand up a winning loyalty program for today’s consumer:

  1. Recognize that showing customers value is as crucial as providing them value. Ensure your brand’s loyalty program isn’t just focused on offering deals and discounts to drive consumers in-store, but that it connects with their target audience on a deeper level and provides a service or incentive they need.
  2. Ensure loyalty programs are authentic to your brand. Don’t follow the heard in loyalty trends like membership fees and threshold opt ins unless it feels authentic and genuine to your brand and target audience. Loyalty programs can only help your bottom dollar if they achieve the goal of creating loyal, repeat customers.
  3. Find the balance of offering personalization while respecting privacy. Lean into creating a personalized rewards experience for members so they feel seen and valued, but avoid steering so far that consumers feel their privacy is being invaded or your loyalty program isn’t in fact proving them value.