Loyalty Is Getting A Facelift In 2017

The face of loyalty is changing. Traditional approaches to loyalty and rewards are becoming stale, and, increasingly, brands are making way for innovation.

While the idea of collecting points in exchange for rewards is hardly new, the methods (and the strategy behind the methods) are getting a facelift, giving greater power, flexibility, and choice back to consumers.

So what are some ways to refresh your loyalty program and what does it all mean? Whether building upon traditional catalogue and points-based programs or starting anew from the ground up, brands will adopt more strategies around mobile gamification, exchangeable currency, and partnerships to level up their loyalty play.

These features not only allow brands to venture beyond their own industry silos and expand their audiences, but they answer the demands of Millennials who are ultimately the ones driving evolution in the loyalty and rewards space.

Mobile Gamification
Simple mobile experiences are entertaining and effective. Mobile gamification is one tactic that increases overall time spent with a brand and encourages repeat engagement across digital sites and apps. For example, Taco Bell Explore added a game feature into its existing app that unlocks puzzle pieces for restaurant purchases and social channel interactions.

The incentives for social channel interactions, which in today’s world are quick, easy, and daily, build the sense of community and competition that are often core to gamification strategies. Maybe posting your score on Facebook will unlock more sweepstakes entries or referring a friend in the game will give you both a coupon. The game-like structure keeps guests motivated to play, earn, and return. Programs and features that incorporate gamification will likely become a staple in mobile and digital programs going forward.

Flexible Currency
With rigid stipulations and long wait times for redemptions, many traditional loyalty programs can seem restrictive to consumers. Flexible and exchangeable currency, on the other hand, can return a sense of agency back to consumers when it comes to choosing what to do with their points.

Consider the American Express “Pay with Points” feature, where users can take advantage of their rewards points on e-commerce sites like Amazon and Best Buy. Not only does this program free AmEx from the old merchandise catalogue and travel rewards model, but technology like this enables greater versatility on how customers can spend their points. Loyalty points will be an increasingly relevant currency for purchases, simply because of the increased options and flexibility it affords consumers in how and where they choose to spend.

Partnerships And Beyond
Gaining the loyalty of partners is just as important as gaining the loyalty of consumers. You may have heard that American Express recently partnered with Uber to offer free rides from participating airports. What about Starbucks branching out with Lyft and Spotify to give Starbucks Rewards members more ways to earn stars?

Some brand partnerships may seem unexpected or might not make sense right away, but such tactics help brands expand program reach beyond a core customer base and attract new members, while also giving existing members more benefits. Simply put, creative partnerships allow brands to break out of their traditional industries and rely on each other for smarter, symbiotic growth. The old adage holds true: Sharing is truly caring when brands from different industries link up and tap into each other’s following. This year, we’re apt to see stronger partnerships over longer periods of time, ones that are likely to involve even more brands than usual.

Better Customer Experience From Service Providers
Let’s face it: Consumers don’t want to engage with their insurance providers. Or tax consultants. Or mobile providers. Or generally any business historically known for bogging down consumers with complicated, time-consuming policies and less-than-ideal communication. There are negative expectations when it comes to traditionally low-engagement brands in industries such as these. But that’s all about to change. Increasingly, these types of industries will take on a much bigger presence and upend a category where customers typically feel any engagement is a chore.

For instance, T-Mobile's “Uncarrier 11" plan (and its T-Mobile Tuesdays) is rewarding its users not with collectable points per se, but with easy access to free experiences, offers, and activities instead. It doesn’t really feel like a loyalty program, but it is driving loyalty outcomes. Similar brands will likely follow suit. Loyalty programs and customer experience will definitely become more tightly intertwined this year.

And Yes, We’re Still Talking About Millennials
The sheer power Millennials hold in the shaping of loyalty programs never ceases to amaze me. From my work, I know that instant gratification is a part of their DNA. Prizes that are given more frequently and immediately are much more appreciated, and the flexibility in programs prove to be better suited to the commitment-phobic nature of this generally finicky group.

Rather than the more traditional “earn and burn” points mindset, the future is in less formal, less structured programs that offer immediate wins. This should remain top of mind when building out any loyalty-related initiative going forward.

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