The Future of Loyalty: think experiences not points.

Updated: Aug 7, 2020

Loyalty. It’s not what it used to be. Certainly if you believe analysts at Forrester Research who have gone so far as to claim that "customer loyalty is dead". Certainly participation levels in brand loyalty programmes are showing signs of heavy decline.

Retail experts have pointed the finger at the proliferation of savvy shoppers powered by smartphones, driven by the desire to track down the very best deal they can find. But in our view this is part of the story but not the whole truth. 39% of shoppers use their phones to compare prices while in store – but that means 61% don’t.

The decline of traditional points-based loyalty schemes is entirely understandable. Loyalty programmes built around points alone will tend to be judged on purely economic terms, and consumers will make their decision about whether or not to repeat purchase from that brand based on the cold, hard cash value of the loyalty reward on offer.

The value exchange feels increasingly one-sided as rewards shrink while at the same time people are increasingly conscious of the value of the personal data they are handing over in return.

The big lesson we’ve learned over the five years is the importance of giving a brand’s best customers a superior customer experience, not just a of collection of points.

Removing pain points and anything that might cause disloyalty is an often over looked part of loyalty. The real work of creating loyalty happens once the brand delivers a superior experience to its repeat customers. But of course driving loyalty doesn't necessarily mean using a loyalty programme. A great customer experience alone can be reason enough to repeat purchase.

So what’s the future of loyalty? While traditional rewards programmes relied on points to pay customers to be loyal, new loyalty will be earned. And that will be by creating a better customer experience for a brand’s best customers.

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