Revamping Your Brand's Loyalty Program in the Age of Consumer Choice

Loyalty campaigns sit at the heart of consumer brand growth, but the landscape has shifted dramatically. Consumers are less loyal than they were in previous years, and they are more likely than ever to shop based on factors like cost, convenience, and experience.

According to a study by SAP Emarsys, the U.S. experienced a 14% decline in customer loyalty last year, plunging from 79% in 2022 to 68% in 2023. Although most consumers stuck to incentivized loyalty programs as their primary driver of loyalty, incentivized loyalty also dropped by 36%, from 76% to 49%.

To stay competitive and engage savvy consumers, brands must reimagine their loyalty campaigns. Here, we'll explore strategies to recalibrate your brand's loyalty approach, tailored for the modern consumer. We'll also analyze a case study about how Slumberkins revamped their program to impressive results.

Defining Loyalty in the Modern Era

Loyalty in the modern era means a lot more than just repeat business. It's about forging a connection that goes beyond the transaction. Younger generations value experiences over products. For them, a brand's value system, its digital presence, and the way it communicates are just as important as the quality of its offerings.

To foster true loyalty, brands must consider:

• The emotional resonance of their brand and how it aligns with customer values.
• The seamless integration of the loyalty program into the customer experience.
• Personalization that makes customers feel seen and understood.

These elements create a loyal customer base that acts as brand advocates, driving organic growth through word-of-mouth marketing and social influence.

Designing an Effective Loyalty Program

A successful loyalty program should address the needs and behaviors of your consumer base. Here are a few key elements to consider:

Clear Value Propositions

Ensure your loyalty program offers tangible benefits that customers actually want. This might include discounts, exclusive offers, or early access to new products or events.

Seamless User Experience

The program should be easy to understand and use. Integrating it into your app or website, offering automatic rewards, and providing multiple options for redemption can help to streamline the user experience.

Personalized Rewards

Personalization is key to creating a connection with your customers. Use data and insights to tailor offers and rewards based on individual preferences and behaviors.

Empowering Customers with Control

In the age of personal branding and digital reputation, customers want to be recognized and rewarded for their loyalty. Allowing customers to share their brand experiences and rewarding their efforts to promote the brand can create a sense of ownership that strengthens their loyalty.

User-Generated Content

Encouraging customers to share their brand stories, reviews, and recommendations on social media can enhance the sense of community and loyalty around your brand. Consider creating a branded hashtag or hosting user-generated content challenges to engage your customers.

Collaborative Feedback Loops

Creating channels for customers to provide direct feedback on products, services, and the loyalty program itself not only improves the customer relationship but also provides valuable insights for further refinement of the loyalty strategy. This two-way communication fosters a sense of belonging and investment in the brand's continuous improvement, deepening loyalty bonds.

Referral Programs

Rewarding customers for bringing new members into your loyalty program can turn your customer base into a powerful growth engine. Offering incentives for referrals, such as exclusive deals or points towards rewards, can drive customer acquisition and retention simultaneously.

Community-Building

Brands can significantly enhance loyalty by creating a sense of community, where customers can connect through shared interests and helpful information. This environment fosters learning and sharing opportunities, turning customers into both learners and contributors, which deepens their emotional investment in the brand.

Measuring and Enhancing Loyalty

Measuring customer loyalty is a multidimensional task, and strategies for enhancing it should be equally diverse. Here are some approaches:

Loyalty Metrics

Utilize Net Promoter Score (NPS), customer lifetime value (CLV), and purchase frequency to quantify loyalty. These metrics can help you segment customers and identify areas for improvement.

Continuous Communication

Regularly solicit feedback through surveys or customer forums to understand what your loyal customers value most and where you can improve. Also, stay in touch through targeted email campaigns or personalized push notifications to keep your brand top of mind.

Leveraging Customer Data

Analyze customer data to identify trends and personalize rewards and incentives, creating a more compelling loyalty program. Leverage customer data to anticipate the needs and interests of your customers, making them feel valued and understood.

Case Study: Slumberkins’ Remarkable Loyalty Journey

According to an interview with Callie Christensen and Kelly Oriard, the Co-Founders and Co-CEOs of Slumberkins, the brand successfully built a loyal following by focusing on the needs and challenges of parents. This focus became especially important during the transition from pre to post-COVID times.

By recognizing the shift in their customer's desires—from exclusive product access to seeking community and support in parenting—Slumberkins adapted its offerings to meet these evolving needs. The creation of a dedicated group for educators and a distinct community for parents underscored their commitment to providing tailored support and resources.

This approach significantly strengthened the trust and loyalty among their customers, as evidenced by a fivefold increase in purchasing behaviors among community members compared to other customers. The brand's conscious decision to maintain authenticity while strategically considering how to scale and differentiate its loyalty initiatives showcases its commitment to nurturing a supportive environment without compromising the integrity of the community they've built.

Slumberkins' focus on supporting parents, rather than directly appealing to children like most preschool properties, sets them apart and fosters a unique and loyal following.

Build Rewarding Relationships

Revamping your loyalty program is not just about giving away more discounts; it's about recognizing and rewarding the nuanced relationships customers have with your brand, and with each other. Adopting a multifaceted approach that considers the modern consumer's needs can result in a loyalty campaign that not only drives business but also creates a community of brand advocates.

To learn more about how you can revamp your loyalty program, don't miss the next eTail event. It's happening in Boston, Massachusetts at the Boston Marriott Copley Place from August 12th to 15th.

Download the agenda and register for the event today.