How to restore loyalty from customers tested during the pandemic

According to a survey of 2,500 American adults conducted by loyalty program provider Clarus Commerce, 68% of consumers agree their loyalty is harder to maintain – up from 64% in 2020, and the vast majority want more than points and the promise of the future. discounts from retailers in exchange for their allegiance.

While this means retailers may have to work harder to attract buyers, Clarus Commerce has also found that more people are willing to pay for better perks – opening the door to stores offering premium loyalty programs or by subscription to forge lasting and prosperous relationships with consumers.

Changing buying habits creates opportunities

While some consumers who have tried new channels or stores during the pandemic will revert to their old ways as the threat of COVID-19 abates, Clarus Commerce CEO Tom Caporaso notes that many will not.

“There are a lot more customers to gain than two years ago, and I think the bonus [loyalty programs] is an opportunity and a solution ”For retailers and brands to secure their allegiance, said Caporaso.

He explained that unlike traditional loyalty programs which are free but require consumers to collect points or meet certain thresholds to receive the benefits, premium loyalty programs with subscription fees generally offer more instant bonus benefits. that consumers expect and find more valuable. .

“Our data has shown that almost 80% of consumers no longer want to accumulate points… they want these benefits now. And when we started to dig deeper into these benefits, free shipping continued to be the # 1 benefit, ”closely followed by instant discounts and fast shipping, he said.

Many of these benefits are more expensive to provide than traditional programs focused on collecting points and earning discounts, but consumer participation fees can help offset these costs, as can increased participant engagement. Premium loyalty programs have helped boost sales and “travel” during the pandemic, according to Clarus research.

“The interesting thing we found is that over seven in 10 buyers actually made more purchases during the pandemic in the programs they were attached to from a premium perspective, and that’s the definition of the loyalty – to bring them back to your store or program to interact, “said Caporaso.

He explained that consumers have returned to stores with premium programs for a number of reasons ranging from wanting to get the most out of a program they are invested in, liking the benefits, or liking the VIP treatment that can come with those programs ( as dedicated payment channels that streamline purchasing).

You don’t have to be Amazon Prime

The wide array of retailers who have launched premium loyalty benefits in recent years demonstrates the versatility of the programs and highlights that while Amazon Prime may be a leader in the space, its model is not the only viable option.

“This is a trend that is not going to go away. You start to think about the players that have entered this market in the last couple of years: Best Buy is one of them, CVS CarePass, Walmart with Walmart + and obviously Amazon Prime, which has been in the market for 16 or 17 years. year.said Caporaso.

He noted that each of these programs is unique and that each is successful.

For example, Walmart + offers a VIP shopping experience and other benefits specifically targeted to the main consumer base of retailers.

“You don’t need to create Prime, and I think it would be very difficult to make Prime. But think about your consumers and what is important to them, then create a program specific to those consumers ”,Caporaso advises.

He adds that once a program kicks off, retailers and brands need to watch it closely and see which benefits get the most engagement and ask consumers what else they would like to see.

“When we think about these programs, we don’t just kick them off and cross our fingers and define them and forget about them and hope they work. We look at the data, we understand the data, and then we add benefits or we remove benefits… so it’s continuous optimization, ”he explained.

Three key factors to create a successful loyalty program

When retailers or brands think about what their premium loyalty program might look like, they need to figure out where consumers will engage with it, how to reach consumers, and how to support members.

Caporaso recommends that premium loyalty programs be offered online and in physical environments and that they be introduced in all channels in which the retailer, brand or service is offered.

For a program to be successful, it must have a tight back office, including an efficient and easy-to-use customer service element that will respond to questions and concerns in a timely manner.

Loyalty programs provide insight to consumers

While customer retention is the primary goal of loyalty programs, it is far from the only benefit they offer retailers and brands. They also collect a ton of customer data that can be used to improve the product line and forge partnerships with other brands and retailers that further drive sales and build engagement.

Caporaso explains that loyalty programs will not only track the promotions customers engage with, but also what they buy across categories, vendors and stores. This data can be used to recommend additional purchases or create partnerships with other stores for services outside the main retailer’s area of ​​expertise, but which will deepen engagement and further drive sales.

But again, Caporaso pointed out, to reap these benefits, retailers must offer consumers more than birthday discounts or even free shipping – they must offer instant gratification and VIP treatment.

Joseph P. Harris