With the continued rise of loyalty marketing programs, differentiating your program from brand X has become increasingly more difficult. Customer rewardsprograms are often similar to one another, diluting the reason for loyalty programs in the first place—greater benefit to the consumer they are unable to find elsewhere. What’s worse is that loyalty programs have become so common they are being viewed as an ‘entitlement’, frequently thinning their perceived value and function as an earned commodity. And while differentiation may not always be required to remain profitable, unique characteristics and experiential elements not found from brand X can certainly increase market share and boost greater profitable for your company in the long run.
So, how does one separate themselves from the pack?
There are several interesting trends developing that can help any business shape their loyalty marketing solutions in more unique ways. These solutions offer great promise in that they provide vehicles for a company to differentiate their customer rewards benefits from the pack. In addition, the areas discussed below suggest meaningful mechanisms that facilitate a broadening of relationships, which will likely become much more crucial in the future.
Dynamic strategies for future loyalty marketing programs
- For starters, companies will have to develop strategies to differentiate themselves from others in their industry. It is on the verge of becoming functionally mandatory since consumer expectations are so high. If a program doesn’t have something different to offer them, rewards benefits could be wasted/un-redeemed or the program will become ineffective (and therefore less profitable.)
- New programs or hybrids will likely become more segmented by targeting special groups such as ages, differing lifestyles or interest areas.
- It is probable that existing loyalty marketing programs will develop a more tiered design, i.e., greater rewards benefits would be focused or targeted on high value/high potential customers.
- A holistic organic view of customers will necessarily become a trend in rewards programs by broadening the kinds of rewards that are offered. Things like relationship rewards, experiential rewards and the like will undoubtedly strengthen the hold on the customer by its very offerings diversity above and beyond discounts or free products that are currently available.
- Cross-fertilization with partnerships where consumers can instantly redeem points with another business providing different products and services from the initiating loyalty company is likely to grow. Customers would be able to convert points at another merchant for experiences, services, discounts or products.
- Similar to cross-fertilization strategies, coalition loyalty programs will offer imbedded rewards potential across an industry group. A good example of this is the airline industry where flyers earn/redeem miles across multiple national and international carriers. Coalition programs will become far more common in many industries, expanding the potential for participation and profitability.
Kobie Marketing is a fully-integrated, loyalty marketing and customer retention agency, helping our clients create profitable loyalty marketing programs and customer relationships.