What will it take to win the hearts of consumers in 2019? What do consumers expect from brands in exchange for their love and devotion? On Valentine’s Day, we sat down with a panel of marketing experts from CrowdTwist, Lenati, and The Wise Marketer to discuss the biggest trends impacting customer loyalty this year and share examples of the brands that are winning consumer affection. To recap that insightful discussion, below are the main takeaways for brands strategizing to take the customer relationship to the next level this year and beyond.
Seamless Omnichannel Experiences
CrowdTwist conducted consumer research last year and found that while the majority of consumers prefer to shop online, 41% also shop in-store and 76% of consumers want to be awarded points for walking into a brand location, restaurant, gym or store as part of a loyalty program. Consumers want to be able to engage and purchase from their favorite brands across all channels, not just through digital touchpoints. We’re seeing social becoming a popular channel for some brands as they establish consumer interactions in conversational environments and we’re seeing digitally native brands like Allbirds and Amazon opening up physical stores. Omnichannel bridges online and offline shopping experiences, and not only gives brands insight into how customers interact with their brand, it helps create a wholistic view of who their most loyal customers are and how they engage differently depending on their preferred channel. This is one trend set to continue in 2019 and beyond as technology evolve to consumer marketing versus channel marketing.
Memorable Shopping Experiences
To get customers in the door, or onsite, brands need to optimize the shopping experience to be responsive to consumer preferences. CrowdTwist research from last year found that the number one in-store shopping frustration consumers have is long check-out lines. Brands need to remove barriers that prevent seamless transactions. In addition, they need to provide the type of shopping experience that makes customers want to come back in order to maintain continued competitive advantage. Nike is an amazing example of a brand revolutionizing the shopping experience. Utilizing their loyalty program, NikePlus, members can interact with products in the retail store through the Nike App, get real-time inventory data, and request styles to try on. Nike infuses elements of surprise & delight through push notifications of extra savings and/or rewards. There are even Nike Plus Unlock Boxes in some stores that are like vending machines stocked with surprise gifts for Nike Plus members. Nike’s data-led loyalty initiative is a prime example of how a brand can create a program that transcends channels and focuses on the customer experience first and foremost.
Research finds that 79% of Americans are more loyal to purpose-driven brands than traditional brands. Brands in 2019 need to be thoughtful, demonstrate they care about what their customers care about and, give back to the community. Consumers care more and more about the social consciousness of the brands they purchase from, especially Millennials and Gen Zs. They are expressing this not only in surveys but through their wallets. Decision making is emotional, and a brand’s culture is a key part of that decision-making process. Having a brand purpose is a great brand differentiator, especially for brands competing with Amazon because it adds value beyond convenience and price. Brands such as TOMS leverage their loyalty programs to bring their causes and mission to the forefront. Members of TOMS Passport Rewards earn points for volunteering or participating in local community events and can redeem for charitable donations. In addition, popular footwear retailer DSW rewards customers for donating shoes. This is a great example of a brand giving back to the community by doing something brand relevant and authentic.
AI to Connect Data Points
Annual spending on AI by retailers is expected to reach $7.3 billion by 2022. We’ve already seen AI and machine learning transform the customer service experience. In 2018, we saw the rise of chatbots, virtual digital assistants, and artificial intelligence agents on the front line of businesses ready to answer basic queries, solve customer problems, and even take orders. More brands are finding new ways to not only connect with their customers on a one-to-one basis, but also predicting their next likely actions, needs, and wants by leveraging AI. Brands are currently benefiting from increased in-store efficiency through the application of machine learning to inventory management. Additionally, brands can leverage their loyalty program to connect data points and create seamless experiences from merchandising availability right through to front line in-store with the customer.
Emotional Trust Built on Customer Data
CrowdTwist research found that only 46% of consumers are willing to share their data with a brand. This statistic is not totally surprising given the high-profile data breaches and scandals we have seen making headlines in the past year or two. How can brands not only rebuild trust with consumers but make those customer relationships even stronger? Our panel of experts suggested brands use data to improve customer trust by creating a personalized dialogue between the customer and brand. It was also argued that customers are open and ready to share data as long as they understand why their data is being collected and what they can expect in return. For example, Sleep Number leverages their InnerCircle Program to help members sleep better. They collect information about their members’ sleep habits and then use this data to educate their customers on better sleep practices. Stitchfix collects customer preferences on clothing, and in return the customer expects relevant recommendations and monthly boxes that are tailored to their style. Brands need to be cautious and collect just the right amount of data, and do it over time. By implementing progressive profiling, and collecting data over time, brands can prove value in how they’re using customer data. This encourages customers to feel comfortable to share more over time which then informs the brand’s personalized content and promotions.
Responsive Loyalty Programs
CrowdTwist’s research identified the engagement activities that consumers were most likely to complete, the perks they wanted for being a loyalty program member, and the rewards they would redeem for. We found:
- 41% of consumers want free delivery as a loyalty program perk.
- 84% most likely to complete surveys
- 55% most likely to visit a brand’s website
- 51% most likely to play a game
Amazon is an example of a brand that’s identified the pain point of “high shipping fees” and built in the benefit of “unlimited free shipping” for an annual fee in their Prime offering. This fee is nominal for frequent shoppers, especially considering Prime membership includes access to additional desirable benefits such as its video and music streaming services. Paid loyalty membership fees are effective if you understand your customer and what their pain points are.
Data Management & Effective Personalization
Our consumer research found that only 34% of the consumers have purchased something that was recommended to them by a brand in the past six months. This is indicative that brand execution on data, while growing, is not meeting its full potential. Data and personalization continues to be a huge priority, a huge opportunity, and yet, a huge challenge for brands in 2019. Our panel recommends that brands assess where they collect customer data and how they are currently able to act on it. Data management and personalization is a big investment, and where many brands are falling short is failing to understand that there isn’t a shortcut path to successful personalization. Brands need to invest in the right technology and resources to make personalization happen on a larger, consistent scale.
To learn more the trends impacting loyalty this year, watch the playback of our webinar “Brand Loyalty in 2019: How to Win the Hearts of Consumers” here.