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Customer Loyalty in 2021: Your 10 Most Important Questions

We’re answering your most pressing questions about customer loyalty, customer retention trends and digital agility in this day and age.

Stepping into 2021, we’ve all vowed collectively to make this year better than the last one. But before we put a lid on the past, I say we use it to better ourselves, and create a bullet-proof plan for 2021. Actually, our most recent joint webinar with marketing automation provider dotdigital was centered around devising a new action plan for companies. It was a very interactive event with plenty of community input. So, based on your inquiries and our most up-to-date insights, here are 10 questions and answers about the ins and outs of customer loyalty in 2021.

1. How did 2020 impact most businesses?

In 2020, many brands and retailers realized they weren’t as customer-centric as they had thought. During the lockdown, they had to rethink their database, build new connections, and turn towards eCommerce. 

Also, due to limited resources and manpower, they had to identify their most valuable customers and try to maintain a relationship with them. 2020 also dissolved marketing strategies and reward programs that focused on pushing discounts.

How was 2020 for your business?
Despite the challenges of the pandemic, a significant percentage of brands managed to stay afloat. They are now looking into new solutions, such as pure-play loyalty technologies, to maintain momentum and become market disruptors. (Data based on participants’ answers in the Antavo and dotdigital webinar.)

2. What are the biggest takeaways from 2020?

One thing everyone needed to learn was to be agile. But not just your regular agility, but rather digital agility: the ability to pivot in the eCommerce space and move in new directions. 

Because of that, many companies had to re-learn the business basics to catch up with competitors. This not only entailed customer relations, but also data collection, segmentation and personalization. In addition, many brands decided to improve their communications strategy to connect with customers on an emotional level.
– Youtube videó beillesztéséhez. A Schering link kodját kell beilleszteni.

Check out our full webinar recording to learn more about these key topics.

3. How can loyalty programs help you get closer to customers?

Loyalty is, from a brand perspective, the result of recognizing and understanding a customer. Loyalty in 2021 is the result of sending the right message (and rewards) to the right customer at the right time. By extension, a loyalty program is a tool that helps you execute this in the most efficient way. 

For instance, loyalty programs enable you to capture more customer data, which can be used to improve customer segmentation, offer personalized deals, and fuel your email communication.

Naturally, this is just a small sample of what reward programs are capable of. Next-gen loyalty programs cover almost every aspect of the customer lifecycle, even those that aren’t strictly tied to transactions.

Customer lifecycle marketing stages with true loyalt.
The secret of modern loyalty programs lies in recognition, a new stage that extends the customer lifecycle, leading to true brand love and higher lifetime value.

4. Then why aren’t companies using loyalty programs? What is stopping them?

The truth is, most companies recognize the power of loyalty programs when it comes to customer retention (or even acquisition). So it’s not a case of ‘We don’t want one”, but rather “We’re still looking for ways to do it right”.

This includes the practical limitations of technology, which keeps brands and retailers from executing their vision. This stems from the fact that loyalty programs require solid integrations and tech-readiness. Without proper segmentation and CRM capabilities, you won’t be able to enjoy the full potential of a rewards program.. 

Also, companies that switched their attention to eCommerce had to close the gap, both technologically speaking and marketing-wise. A loyalty program is still in the cards for these companies, but as time passes and they become ready, we will have seen many new innovative reward programs pop up across the board.

Do you currently have a loyalty program?
At first glance, the number of companies without a loyalty program is still high. But if you combine those who already have one, and those who are planning to launch one in the near future, then the two sides are equal. (Data based on participants’ answers in the Antavo and dotdigital webinar.)

5. Can we be customer-centric without a loyalty program?

In short: yes, but achieving the same results may cost more, or you might miss out on certain opportunities. On an added note, you don’t have to think about reward programs as a necessary cost to keep and engage customers. There are ways to make your system profitable, or at least derive value from it that far exceeds your initial investment.

As Gavin Laugenie, dotdigital’s Head of Strategy & Insight, put it during the webinar, “loyalty programs aren’t just marketing functions”. Because reward systems are built around the idea of keeping customers on board, they require a common understanding across all divisions at the company. 

Here’s our top ebook about cost-effective reward planning:

Download The Ultimate Guide to Loyalty Program Rewards

6. How can retailers show empathy?

In other words, you have your data, but how are you going to use it to resonate with customers? What really matters here is what you’re putting into your messages. Today’s customer is looking for a connection, social changes, and brands they can share their values with. Therefore companies should consider looking at customers as not only buyers, but also as fans of their brand — and treat them accordingly. 

Brands and retailers should show solidarity, demonstrating that they understand what fans are going through — perhaps sharing customer stories in newsletters. It’s a very personal message.

From a loyalty point of view, you need to be aware of what kind of experiences and rewards customers want, and not just sell products to them. Reward the return of used products or specialty packaging, offer experiential rewards, incentivize workouts with badges and milestones, etc. 

Despite suffering as a hospitality brand, Hilton has donated one million hotel rooms to medical professionals on the front line.
Despite suffering as a hospitality brand, Hilton has donated one million hotel rooms to medical professionals on the front line. They also postponed tier expiration for their loyalty program members, so they don’t punish their most loyal members for the lockdown. 

7. What should the key focus be for 2021?

There are three: customers, customers and customers. 

In other words, focus on understanding your customers better and pick a reward or service that each customer segment actually wants. This is the most direct way to their hearts. And not only will you win their hearts, but also their trust, meaning they’ll be more likely to recommend your brand to friends and family.

German mountaineering product retailer Bergzeit integrates the Strava tracker in its loyalty program.
Mountaineering product retailer Bergzeit integrates activity tracker Strava with its loyalty program, rewarding members for reaching certain milestones. Because their members all share a love for sports, this kind of encouragement aligns the brand with people’s values. 

8. As a fashion brand, how can I incentivize customers to buy clothes while they work at home?

The lockdown hit traveling companies and fashion retailers hard. With most people spending their days between the four walls, they’re less inclined to spend money on clothes and outdoor accessories, even though online shopping is widely accessible. The best companies in these verticals can do is build anticipation and desire.

Keep up the relationship with customers through frequent newsletters. Reminisce about the ‘good old times’ in personalized emails, where you list some items from their purchase history. Because once the lockdown is lifted, people will rush outdoors and go party like there’s no tomorrow, but they’ll need the gear and garb to do so. And if you remain close to them, you’ll be the one they buy from.

The official clothing brand of soccer team Tottenham Hotspur FC.
The official clothing brand of soccer team Tottenham Hotspur FC reminds its customers in a heartfelt message that the sport will be back one day, and shares how much their fans mean to them.

9. How is B2B loyalty different? 

Remember, just because you’re selling to other businesses, there are still people at the other end of the table. The only differences are the marketing and sales approaches. For that reason, many of the previously discussed elements (personalization, showing empathy, aligning with their value) still apply.

In a B2B loyalty program, your incentives should be benefits that people at another company want or need: specialized training, free treats from a partner shop, a marketing boost, etc. In fact, the people handling B2B contracts and relations are just as happy to receive personalized treatment as anyone else. So keep them happy by offering various perks. This is often easier, as you probably have more direct contact when doing B2B business.

US-based telecommunication company Telarus has a loyalty program geared towards partner retailers.
US-based telecommunication company Telarus has a loyalty program geared towards partner retailers, incentivizing them to sell Telarus’ service. Rewards include marketing consultancy and sales training, special experiences, or gifts that make their offers even more attractive.

10. As a retailer, how do you re-engage customers without discounts?

You need to have a thorough understanding of your customers and their habits. For instance, don’t use discounts on customers who are loyal without it. For those customers, you should instead focus on the experience and give them privileged status, for example. For the customer segments who want discounts, you need to find a way to reduce their dependence on discounts, and gradually convert them into the first group of loyal customers. 

Also, you need to find welcome rewards that aren’t a straight-up discount to avoid spoiling new members. Offer discounts only for customer groups that are at risk of churning, or for special occasions, such as surprise birthday rewards.

Most companies understand the balance between acquiring and keeping customers.
Most companies understand the balance between acquiring and keeping customers, as they wish to share their focus between the two areas. (Data based on participants’ answers in the Antavo and dotdigital webinar.)

The Future Is Bright, You Just Have to Believe in it

2021 can be a great year for your organization. All of the hardships you’ve endured will pay off, you just need to focus on customer happiness. Whether you achieve this through personalization, rewards, deals, gifts or badges is up to you.

Curious about the deeper implications of a sophisticated omnichannel loyalty solution? Strike up a conversation with our experts! We will happily respond to your loyalty program RFP, or show you our capabilities through a demo

Still researching the loyalty program providers? Here’s a helpful comparison worksheet to make the process more efficient.

Download the Loyalty Management Platform Comparison Worksheet.

Sheila Power

Sheila is Antavo’s VP of UK. She has decades-long experience working with consultancies and SaaS technology providers in various parts of the world. She’s a long-time fan of loyalty programs, and eagerly consults with brands on the best solutions.

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