Opinion: Top 5 Customer Loyalty Trends for 2021

Relationships have a way of becoming stronger, if people feel valued and catered to, in the midst of crisis. For all its dramatic disruption of our lives, the silver lining to the dark cloud of a pandemic affected 2020, were empathetic gestures and initiatives that showed people they were valued. Governments, international bodies, institutions, and organizations, either elevated their stature, among the general population, or found it famously diminished. Naturally, 2020 gave businesses the opportunity to show they valued their customers as well.

In a market being reshaped by heightened customer expectations and unprecedented competition, Customer Loyalty programs were everywhere already, in the pre-covid era. But the pandemic has certainly put this trend front and center. Managing customer relationships became even more explicitly about delivering value in 2020, like never before. With the advent of 2021, we are witnessing an evolution, in customer loyalty programs.

Accelerating a customer focussed model of business

With economic activity slowing to a crawl in 2020, businesses were single-minded, in their efforts to retain customers. But it would be unfair to say that the pandemic restricted economy was the chief reason for an even greater focus on Loyalty. In fact, an overwhelming 75% of the respondents to a 2019 survey said they were likely to make another purchase from a business, after receiving an incentive. With 2021 ushering in an even more customer-focussed era, here are the top 5 trends that are taking Customer Loyalty to the next level, in the new normal:

• Strategic Partnerships to upstage the competition: Rather than trying to enhance customer loyalty by themselves, brands have begun to realize the compelling rationale of delivering comprehensive value, with the help of strategic partnerships. By joining hands with others providing related services and products, businesses can head off competition from their partners, and offer unique value propositions.
• Premium Loyalty Programs, with enhanced perks: 80% of millennial respondents, and 68% of non-millennials, we found to be ‘more than willing’ to sign up for a premium loyalty program, if offered benefits they found valuable, according to a 2019 survey. These indisputable figures have been further reinforced in 2020. Expect to see graded loyalty programs from more brands in 2021, with leaders distinguishing themselves on the basis of unique offers.
• Agile and Cost Effective Loyalty Programs: Let’s face it, most businesses can’t afford to rely on indiscriminately offering their customers the moon, in a depressed economy. The focus is shifting on creating Loyalty programs that create a win-win, for both the customer and the business itself. Technology has been a major enabler in this context. For instance, SaaS based Loyalty solutions can actually reduce costs, with very little capex and lower opex costs, while delivering value to customers by delivering a quick program from ideation to roll out.
• Gamification, not just perks: Look up ‘loyalty’ in the Webster’s, and the definition will be relationship-centric. Customer Loyalty is not simply about dangling a carrot – as many an unimaginative business organization has found out. Engagement is the key. And one of the most effective ways to infuse such programs with this elusive quality is to recognize and reward interactivity. For their part, an overwhelming percentage of customers – millennials and baby-boomers alike – get a greater amount of satisfaction for being recognized for their engagement, not simply purchases.
• Making customers active stakeholders: Retail giant Target recently gave their ‘Target Circle’ members the option to vote for the community organizations and non-profits the company would contribute to. Domino’s Pizza awarded 25 customers ten shares each, as part of their ‘Piece of the Pie’ rewards program. US telecommunications company T-Mobile offered loyalty program members a ‘stock-up’ option, as part of its T-Mobile Tuesday promotion. Stock offers, and a greater say in company policies and actions, reflect a blurring of lines, between businesses and their customers. And the trend is likely to escalate, in 2021

Delivering real-world value, not just discounts

It’s becoming increasingly clear that, if businesses want their loyalty programs to truly set their brand apart, they have to acknowledge a sophisticated and discerning customer base. Point-based loyalty programs and cumulative rebates will certainly continue to have their place. But, as customers are flooded with options from competitive marketplace in the palm of their hands, Loyalty will need to evolve to offer truly rich engagement. For those progressive businesses who are truly listening to their customers, it has already become apparent that ‘value’ is a far more nuanced concept to the modern consumer, than a simple percentage taken off the price-tag.

Opinion piece by Sajid Azmi, CEO Yegertek