1. Strategic alliances
Joint ventures have been a common feature in many existing programs, with the difference that in most cases these agreements were one-off and for very specific actions rather than permanent. Accumulating points from another program or benefiting from a discount have been the most common practices, but almost always these alliances were formed with brands that had a direct impact on the sector to which the original loyalty program belonged.
Today, these agreements are no longer an option but a necessity, since, especially in certain sectors, customers demand complementary products that can be enjoyed anytime, anywhere. We are in a "moment" where exciting and surprising customers is highly valued.
A partnership with a third party is already considered a critical trend for the future and remains an excellent way to build brand awareness by teaming up with other brands that have an audience with similar interests to your own audience. Strategic partnerships have several benefits. They can add excitement and change to a traditional loyalty program, especially after it has been active for a while and customers are accustomed to the standard rewards on offer. It is a creative way to mix up the rewards catalog or run unique campaigns. There are examples such as Uber Eats, a home delivery brand that has partnered with several brands and loyalty programs to reach new audiences and offer relevant benefits. The biggest challenge with strategic partnerships is, of course, finding the right partner. The offer must be in line with the program's brand to maintain quality and not damage its image. Access to certain brands can also help as a lever to reach partners of other ages: "Next-Gen."
Let's not forget that sometimes it is not necessary to create your own program; instead, you can become an active part of an existing program, which will make in-house creation and development much less expensive. It would be a type of outsourced program.
2. Support for ESG causes (Environmental, Social, and Governance)
ESG is a set of factors that measure a company's performance, commitment, and impact on sustainability, ethics, and good governance. This trend of connecting loyalty programs to support ESG can be considered a novelty, as they have not generally been associated with each other in the past.
But the reality is that this new model has become part of everyday conversations, and it is not surprising that it can also be incorporated into programs. Customers are demanding greater commitment from companies and are willing to make sacrifices that help them do their bit for these causes in the simplest way possible: recycling clothes in stores in exchange for a discount voucher (e.g., H&M), donating points to charities, using more environmentally friendly items. According to a recent study by Gartner, 50.8% of companies have plans to reward responsible behavior.
3. Predictive analytics
This is a major trend for businesses. Predictive analytics helps them better understand their different types of customers: how much are they spending? What is the customer's value to the company? With this information, we can begin to think about how to migrate them in value and decide which ones they are willing to spend more on. Predictive analytics also helps companies better understand what behaviors really drive high-value customers.
An example that is currently being implemented is the case in which if a company sells different product categories/brands and manages to sell category X, it is very likely that the same customer will also buy one of the three adjacent categories. With this information, an incentive can be designed within the loyalty program to encourage that new purchase.
The analysis of data generated through the loyalty program can help us design our customer journey. However, we must be cautious and avoid giving customers the perception that they have too much control over their personal data.
Image from Freepik / Photo from Photo Boards on Unsplash
