We all know it’s more cost-effective to keep existing customers than acquire new ones. But running a successful customer loyalty program can be tricky when new market trends emerge each year.
Here are the latest shifts in the world of customer incentives you can use to pivot your marketing strategy.
1. Customized Loyalty Programs
Loyalty programs are an effective omnichannel marketing strategy because they prompt buyers to make frequent purchases based on their transaction history and provide convenience. According to the Bond 2020 Loyalty Report, 79% of people stated they’re likely to remain customers with brands that offer loyalty programs.
Yet, as more companies roll out campaigns, consumers have a range of shopping choices and expect more from each brand. To remain competitive, businesses will need to customize their offerings and build loyalty on their digital channels rather than just in-store.
You can personalize offerings by collecting data across channels and targeting shoppers based on their spending behaviours. Reward them as they move along the customer journey, such as making a purchase in-store or placing items in their online shopping cart.
Or, you can offer different types of programs including cash incentives, points they convert to cash, and a tiered model.
Ultimately, loyalty members who receive tailored perks are more than eight times likely to use them versus generic ones, proving bespoke rewards are a winning strategy.
2. E-Commerce Spending Surge
It’s no surprise, but e-commerce is still the dominant shopping method. Compared to 2019, the existing growth of e-commerce shopping accelerated even further amidst the pandemic. One research report found that e-commerce accounted for about $1 out of every $5 spent on retail in 2020, up from every $7 spent prior. Apparel sales have also increased more than 11%, with an estimated total retail sales hitting over four trillion dollars in 2021. That’s a lot of growth!
Even as lockdowns lift, consumers choose to interact with brands online on an international scale, which is a trend here to stay. Mastercard Economics Institute predicts that 20-30% of the digital shift in retail from the pandemic will be permanent globally.
So, how should you approach online loyalty? We recommend enhancing your digital touchpoints to reach new global customers and entice ones with low engagement. You can integrate your loyalty or referral program with an online portal, such as a digital wallet, to create a seamless customer journey.
3. Contactless Payments
It’s official–cash is no longer king. That’s because safety regulations for COVID have accelerated the adoption of digital and contactless payment systems. As a result, both retailers and customers now strongly prefer digital and card payments instead of cash to prevent the transmission of germs.
This past year, 40% of Canadian shoppers only visited stores that accepted contactless payments and 57% claim to use cash less often. So it may seem obvious, but businesses can adapt to this trend by offering virtual cards, providing consumers with peace of mind and convenience.
Virtual prepaid cards instantly deliver touch-free funds to your customers via email, making them the ideal choice for incentives, loyalty programs, or rebates at a much lower cost. With TruCash’s rewards programs, you can issue cash or points that users spend online where Visa is accepted, all while promoting your brand.
4. Upcoming Travel Boom
After being housebound for over a year, people are eager to travel again. During Canada’s country-wide vaccine rollout in early 2021, we saw an increase in travel that’s predicted to grow as restrictions lift entirely. It’s the same story for the U.S, as over two million travellers now catch flights on an average day, similar to figures pre-COVID. This means airlines and hospitality groups have the chance to roll out new loyalty programs or boost existing campaigns to capitalize on the pent-up demand.
Another emerging trend is travellers looking for flexible flight bookings, accommodations, and rates due to the pandemic’s uncertainties. Incentives like refundable deposits or last-minute bookings can give jet-setters the reassurance they need to cancel at a moment’s notice.
And it’s not just international–local travel is also on the rise. The top destinations for Canadian travellers this past year were domestic, including Jasper, Banff, and Muskoka, which will likely continue in the next year. The competition may be high, but a unique way Canadian cities can promote their destination is by offering local spending incentives for visitors.
For example, tourism organizations can reward visitors with prepaid Visa cards (usually with a $50 to $100 value) that encourage users to shop at local businesses, stimulating the economy. These programs connect hospitality, restaurants, and small companies with paying customers while making their stay more memorable. With our help, the cities we worked with saw an average 55% increase in card usage in the area and 60% of users spent rewards at local restaurants.
Customer loyalty is a proven marketing strategy with plenty of room for growth with these new trends and the use of innovative digital payments. Reach out to learn more about our card solutions to transform your loyalty program into a seamless cross-channel experience, complete with data insights and branding.