The future trends of loyalty programs – diverse and immediate

Loyalty programs serve as one of the most significant ways brands struggle to maintain customers effectively. Constant changes in users’ demands and cut-throat competition are forcing brands to re-invent the wheel in order to satisfy their customers.

It is even more challenging when it comes to e-commerce. User loyalty is the Holy Grail in terms of online marketing, and marketing executives are knocking themselves out when it comes to loyalty and retention efforts. So what are the major trends in terms of loyalty programs we are about to see in 2016?

Back to Basics: Why do clients use loyalty programs?

A Recent study shows that customers have several key motivations for using loyalty programs:

  • 54.7% : saving money
  • 37.5% : receiving rewards
  • 3.6% : earning rewards
  • 1.6% : other

It is quite obvious that users are looking for more ways to save money or to be rewarded for actions and interactions. So far so good, right? Well…

The future of loyalty programs is based on real-time gratification and diversity

Traditional loyalty programs reward users for their next purchase. Unfortunately, it is quite the opposite of what the user is actually looking for. Users are impatient, they want an on-the-spot reward or feedback and they want to FEEL that their effort hasn’t gone unnoticed.

Today’s online experiences are based on fast-paced interactions. In a world in which the rhythm is constantly being amplified, e-commerce businesses will have to keep up and offer their shoppers instant and rewarding shopping experiences alongside true diversity in terms of personal rewards.


Rewarding users for more than spending money

Another blind-spot of current loyalty programs is the fact that they are rewarding users only for spending money. E-commerce sites and brands will have to realize that their users are much more than a wallet or a credit card. Therefore, online businesses will have to figure out new and innovative ways of rewarding their users for more actions such as sharing, ‘Liking’ on Facebook, watching videos, Tweeting, reading an article or any other action that meets their most valued KPI’s.

In conclusion: The 4 key factors of the next phase of loyalty programs:

  1. The term “points” is losing its effectiveness: Basic loyalty programs are based on collecting points and redeeming them for goods offline. Well, no more! The new e-commerce is based on missions and rewards and game mechanics, offering the user a new and engaging way of interacting with the brand.
  2. Clients are looking for a more frequent interaction with the brand: Back in the day, it used to be enough to occasionally interact with the user. This too is a thing of the past. Today, users are looking for a much more frequent interaction with the brand. Recent studies show that daily and weekly interactions are most effective when it comes to user loyalty. Therefore, brands will have to put much more effort in creating contact points with their users.
  3. Instant rewards are gaining significance: Customers are looking for instant gratification. Brands must be aware that if they don’t provide real-time feedback, their clients will get it elsewhere. E-commerce sites need to focus on the “now” factor, providing their users with instant feedback. Studies show that clients do not want to wait a number of days until they can redeem their reward, especially if that reward can be redeemed online or in a store.