The North America Customer Loyalty Report 2022 provides a deep look into prevailing customer loyalty and loyalty technology trends in the region
The North America Customer Loyalty Report 2022 dives deep into customer loyalty and loyalty program trends and sentiments in the North American region, through the looking glass of current and upcoming loyalty program owners. The report is recommended for all brands, no matter whether they offer a loyalty program, are planning to launch one, or are in the process of a revamp.
This report is based on a global survey with over 320 corporate respondents from all regions of the world and compares the global results to data specifically provided by North American respondents. The report also pulls data from 10.7 million North American loyalty member actions tracked via Antavo’s Loyalty Management system and includes additional insights from loyalty experts and interviews with respected industry professionals in the region.
The North America Customer Loyalty Report 2022 is meant to be a sanity check for the C-level marketing community.
It will help marketing decision-makers compare the current state of loyalty programs in the region to the global trends in order to identify growth opportunities for their upcoming or revamped loyalty project.
Whether you are a long-standing player in the market or plan to enter it, this report will give you the insight necessary to switch your loyalty program into high gear and stand out from the competition.
“The pandemic drove massive shifts in consumer spending in North America.
As a result, The pandemic drove massive shifts in consumer spending in the region. This report is meant to be a guide for a variety of businesses: whether you are a player in this market, or plan to expand your presence to North America, you’ll find plenty of insight on how to be a trendsetter using a loyalty program.
Our goal was to identify the unique characteristics of the region in terms of customer loyalty, loyalty management and loyalty technology. To achieve this, we went directly to the source and surveyed current and future loyalty program owners and interviewed loyalty professionals in the region.
With that being said, we hope this report helps you in the process of launching or revamping your loyalty program to gain a unique edge. Because at the end of the day, customer loyalty is the pillar that every long-standing business should be built upon. So get ready to seize the untapped potential!
One major trend in Antavo’s Global Customer Loyalty Report was that loyalty programs proved to be highly effective during the pandemic. However, the past few years have also led to a digital transformation, which significantly affects how loyalty programs are perceived by both the public and their owners. So the question is, how do North American companies see the current state of loyalty programs?
The findings paint a mixed picture of the North American loyalty landscape. On one hand, the outstandingly high number of satisfied loyalty program owners shows that a brand can find success with a well-thought-out loyalty program. However, on the lower end of the line, the number of dissatisfied program owners is higher than the global score by 5%, which means that there’s a risk of failure, and not everyone can realize the expected potential of their program.
It’s worth highlighting that the companies interested in revamping their loyalty programs were from all three categories: satisfied, neutral, and dissatisfied about their current programs. This appears to indicate that companies are looking to revamp not only when the program is not doing well, but also when already-successful programs could be further improved.
Another noteworthy finding from the responses is the low rate of emotional loyalty programs. While the rational program sentiment generally shapes customer loyalty through transactional rewards and benefits, emotional loyalty leans towards long-term engagement and memorable, experiential rewards.
The fact that very few loyalty programs in the NA market are emotional can be turned into an opportunity, as post-Covid audiences respond especially well to experiential rewards and non-transactional engagement. This means that North American businesses still have many opportunities to engage these audiences.
Emotional loyalty consists of a variety of loyalty program elements, therefore brands from all kinds of industries and verticals can implement relevant features that fit their loyalty program concept.
In addition to the previously mentioned experiential rewards, emotional loyalty consists of personalized experiences, early access, VIP events, early access to sales and products, members-only gatherings, and so on.
“Consumers care about different things nowadays.
Millennials and Gen-Z value sustainability, ethics, and inclusion rather than material possessions — instead of seeking items, they’re searching for experiences. Loyalty programs need to reflect these preferences, and businesses can start by engaging with customers in ways they actually care about — beyond point systems.
In North America, there will be an 87.5% uptick in rewarding non-transactional behavior within the next three years. So, if you’re a sporting goods retailer, you’ll want to reward your customers for using the hiking boots, rather than just purchasing them. As we move away from that “quid pro quo” model of loyalty programs, we have to connect these experiences to the customer journey and make every touchpoint feel intentional.”
The loyalty management market in North America has always been a land of opportunities. Pushing towards innovation, in either strategy or technology, can yield great results, propelling businesses to become industry trailblazers, like Amazon or Starbucks. Antavo’s North America Customer Loyalty survey identified the following investment trends in the region.
When it comes to investing in loyalty, North American businesses see eye-to-eye with the rest of the world regarding both customer loyalty and loyalty management.
However, in this region, a lower percentage of companies with a loyalty program either increased or significantly increased development efforts of their loyalty strategy during the Covid-19 crisis.
Still, respondents generally share the sentiment that investing in customer loyalty and loyalty programs is a worthwhile endeavor.
The fact that loyalty programs benefit their owners is further supported by the numbers on ROI.
On a global level, 67.2% of respondents stated that they measure their loyalty program’s revenue performance, while in North America, 70.0% of businesses claimed the same.
What’s more, most of these respondents reported a positive ROI. In spite of such great results, 80% of businesses still want to revamp their program. It’s safe to assume that the reasoning behind the decision is that owners still see potential in the market.
Another indication that North American companies actively seek to improve their loyalty program is that 87.5% of respondents are planning to introduce non-transactional engagement in the next three years by rewarding member behavior outside of the buying cycle.
Since this form of engagement has ties to emotional loyalty, it’s highly possible that in two or three years, many more loyalty programs in North America will be described as more emotional than rational.
A group of experts was asked to share their insight about the future of loyalty programs in the North American region.
Here is a rundown of their responses:
Another underutilized area that holds great potential for North American loyalty program owners is personalization. According to a study by Boston Consulting Group, vendors and US retailers currently spend $140 to $200 billion in trade and shopper marketing (excluding advertising), yet they spend only about 5% of that amount on personalized offers. In terms of loyalty programs, survey responses show that there is interest in growing this number.
The statistics clearly show an interest in personalized loyalty experiences and rewards. Though the current utilization of personalization in loyalty programs is slightly lower than the global average, it is still significant enough to be considered a noteworthy trend, especially because roughly one-third of respondents offer personalized rewards or offers in some capacity.
Future loyalty program owners claimed an even stronger interest in personalizing the loyalty experience.
When asked, North American respondents expressed a desire to offer personalized rewards and offers, exceeding the rate of global respondents.
It’s worth highlighting, however, that when North American companies were asked what features they are planning to add in the coming years, personalization ranked below rewarding member behavior outside of the buying cycle and adding gamified mechanisms.
This may indicate that future programs will be more emotional than current programs, but also that personalization isn’t the only plan North American businesses have in mind.
One reason behind this finding is that executing personalization for a loyalty program is much more complex than introducing gamified mechanisms or non-transactional engagement.
While these two can be achieved by adding a prize wheel or a friend referral system, personalization must be preceded by data collection, precise segmentation, and a reward concept that takes all of this into account.
“Brands must show customers that they are interested in having a 1:1 relationship.
With loyalty programs that spotlight personalized customer experiences, businesses can connect with their customers in a meaningful, relevant way. In appealing to consumers’ emotions, you’ll resonate with them on a deeper level and stick in their memories.
Like the rest of the world, North America is adjusting to an increasingly digital way of life. Since it’s easier to discover and engage with brands we’ve never experienced, there’s more competition than ever before. Pair the pandemic-accelerated move towards digital with supply chain issues and lockdowns, and suddenly, we find ourselves in the midst of “The Big Switch,” where digital channels are the primary way to communicate, and direct consumer relationships are everything.”
Loyalty technology is an often overseen aspect that has the potential to heavily impact a company’s satisfaction with its loyalty program. Generally, technology involves more than just the capability to execute the concept. The loyalty platform of choice should also be flexible and easy to use, otherwise the staff tasked with the daily management will struggle. Inefficient loyalty technology that requires constant maintenance from the internal IT team may very well be one reason why loyalty program owners decide to revamp.
It seems that North American companies are less worried about the usability of their loyalty program than other companies around the world.
The reason for this most likely lies in the fact that among the three response groups, North Americans rely the most on third-party loyalty technology vendors for their loyalty programs.
Third-party technology providers, especially pure-play vendors, have much more experience building feature-rich, easy-to-use, no-code loyalty program platforms. By voting confidence for third-party vendors, North American companies essentially outsource all challenges revolving around technology to other companies.
Because they are paying for specialized technology, they encounter usability issues that require help from the IT team less often.
”Many North American businesses still offer purely transactional loyalty programs.
And produce the kind of customer loyalty and engagement that is possible with advanced modern technology. But the loyalty market is evolving in North America. But we are witnessing significant growth in the North American loyalty market. The demand is stronger than ever. The fact that 80% of North American companies offering a loyalty program are planning to revamp their programs and significantly increase their investment in customer loyalty demonstrates this.
With a strong drive to deliver highly personalized experiences and to reward non-transactional behaviors, companies will need to equip themselves with loyalty technology that will be able to deliver the experience their customers expect. In a market where competition is increasingly fierce and global, companies must differentiate themselves with a loyalty strategy that offers a simple but customer-centric omnichannel loyalty experience.”
In order to paint a picture of the future of loyalty programs, survey participants were asked to rate which trends they feel to be the most influential in the next three years. Based on the survey responses, North American companies found these three trends to be the most influential.
Respondents were asked to select what they believe the most important loyalty trends will be over the next three years. Then their answers were ranked.
The fact that most companies in this region voted personalization as the most important trend further proves that this strategy holds potential on the market, and brands know it.
Data collection and usage was ranked as the second most influential trend for the future, and for good reason: being able to collect and use customer information is the crux of personalization, and utilizing advancements in this field — gamified surveys, predictive analytics, agent-assist technology — can elevate segmentation to a new level.
Offering a seamless omnichannel loyalty experience was at the top of existing program owners’ minds, receiving the most votes. Seeing it as a major challenge now may explain why companies in the region ranked it at the bottom in terms of potential influence in the future. On the other hand, collecting and using customer data has recently become an issue, with new restriction on cookies and restrictions on third-party data.
Lastly, calling out experiential rewards as a challenge can be an indication that North American businesses are looking into ways to make rewards more emotional, but are running into roadblocks.
North American businesses planning to launch their loyalty program in the next three years seem to diverge farther from the global average. While the most important challenge remains the same for both groups, future program owners echoed the same opinion about limited internal resources for program management, which is clearly a recurring issue in the region.
Besides integrating loyalty marketing into the company’s strategy and a seamless omnichannel experience, future program owners also believe gamification to be an important challenge.
A group of experts was asked to share their insight about the future of loyalty programs in the North American region.
Here is a rundown of their responses:
High satisfaction, and lagging behind emotional loyalty
Among the three regions analyzed, North American brands seem to be the most satisfied with their current loyalty programs. This market also scores highest for wanting to revamp the existing loyalty structure, potentially due to a desire to perform even better. Companies, however, are lagging behind in implementing the emotional model, still holding onto the concept of rational, transaction-based loyalty programs.
Give me personalization!
North American businesses generally see eye-to-eye with other companies around the globe when it comes to investing in loyalty. They score similarly when it comes to expressing a desire to invest in loyalty and in loyalty marketing. As for personalization, North American businesses, especially those that are planning to launch a loyalty program in the near future, show a keen interest in introducing personalization.
Relying on loyalty tech
North American businesses stand out for being the region with most organizations using third-party loyalty technology vendors to manage their loyalty program. And because many brands use quality technology provided by a vendor instead of developing one in-house, they are less likely to run into roadblocks that hinder day-to-day management, such as constantly needing the IT team’s help to run the program.
Data and relevance are the future
When asked about the most influential loyalty program trends, North American respondents predict that personalization will have the most impact on the industry, followed by new ways to collect and leverage customer data. These two are strongly tied together and it’s likely that this region will make major strides towards custom-tailored loyalty experiences in the coming years.
Whether you plan to launch or revamp your loyalty program, there are a number of ways you can improve on popular concepts to ensure maximum effectiveness and community appeal.
We have outlined an action plan based on the assessed trends, statistics and sentiments:
While loyalty programs are a costly investment and it’s understandable that businesses want to see a positive ROI, transactional engagement, which only focuses on coupons and discounts, is losing its appeal. For a truly memorable experience, brands need to think outside the box, and start rewarding customers for actions other than making a purchase.
Incentivizing friend referrals, product usage, writing product reviews and hosting comments or Instagram contests should be the first step, but companies can go even further by rewarding customers for donating to charity or living an active lifestyle. The technology already exists to connect with customers in their everyday lives, and building a meaningful relationship in this way will no doubt have a positive effect on customer lifetime value.
Brands need more than just a loyalty program to ensure a truly authentic and personalized experience. The program can be used in an intuitive way to learn about customers, their preferences, lifestyle and purchasing habits.
All of this unique information gathered through loyalty interactions then must be fed into a sophisticated machine learning algorithm to identify valuable opportunities, like customers who are at risk of churning. Then, to ensure that the communication is personalized too, brands need a marketing automation service to deliver the messages and spread the news about relevant loyalty rewards.
Whether a brand is using an in-house or third-party loyalty platform, the power of no-code management cannot be overstated. Being able to quickly and effortlessly create new loyalty campaigns by using a template system is key. Having a self-explanatory interface is equally as important.
A convenient loyalty technology that can be managed without the IT department contributes to the ROI as well, because less time and resources need to be allocated to it. Furthermore, training new staff members is easier, which helps to reduce the time to value of the loyalty program.
The data was broken down into the North American region and compared to the global results.
The descriptive and comparative analyses were carried out on the basis of the primary data collected using the survey. The results were stated at a 95% confidence level. Refer to the Global Customer Loyalty Report 2022 for the complete methodology.
The North America Customer Loyalty Report 2022 and accompanying survey were a collaborative effort between Antavo and several industry experts.
Andreanne RONDEAU - Loyalty Expert, stratLX, Andy NEMES - VP of North America, Antavo, Balint PATAKI - Data Scientist, Barbara KEKES-SZABO - Trend Researcher - Loyalty Program Specialist, Antavo, Brian WALKER - Expert Insight - Chief Strategy Officer, Bloomreach, Brigitta KANTOR – Creative Director, Antavo, Eva BACSI - Contributor, Marketing Director, Antavo, Jess MIZERAK – Copy Editor, Antavo, Meagan MERCIER - Data Analyst, stratLX, Tamas OSZI – Copywriter, Senior Loyalty Program Specialist, Antavo, Viktor FASI - Business Intelligence, Head of Product, Antavo, Zsuzsa KECSMAR – Editor, Co-Founder and CMO, Antavo
Expanding Loyalty Beyond the Buying Cycle
Expanding Loyalty Beyond the Buying Cycle
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