Trends In Loyalty Programs For 2022 You Need To Know

by Loyalty Point
16.02.2022
Trends In Loyalty Programs For 2022 You Need To Know
by Loyalty Point

„Be a Loyalty Company, not a Company that has a Loyalty Program”. This is a maxim that should guide any company investing in loyalty these days. Having a traditional loyalty program is no longer enough to boast loyal customers. What trends in loyalty programs will take hold this year?

Over the past two years, customers have been discovering new sales channels and new brands. It turns out that up to 75% of consumers demonstrated new shopping behavior, including interacting with new stores, companies and sales channels.  After the pandemic, many consumers will be left with their new – acquired during the pandemic – shopping habits. Understanding how the crisis affects customer needs and expectations is crucial to building a loyalty strategy for the future.

Recognition of well-designed digital solutions

The pandemic has increased appreciation for well-designed technologies – according to the Global Marketing Trends 2022 report, more than 60% of consumers will continue to be keen on using digital solutions, even long after the pandemic has subsided. Experts estimate that these changes are irreversible. This confronts companies with the need to make strategic decisions as to their further development – especially in the area of sales. This also applies to the relationship marketing industry. Traditional loyalty programs based on collecting stamps or points on plastic cards are migrating faster and faster to an online form, and the new ones that appear on the market are increasingly functioning only in electronic form. In addition, younger generations are far more likely than older ones to make purchases via social media or voice assistants. Making well-designed technologies today not a possible option, but a necessity.

Subscription loyalty programs

Paid loyalty programs are not entirely new, but they are still in the vast minority. Last year, Amazon Prime appeared in Poland, and the domestic market already has such paid loyalty programs as Allegro Smart, Empik Premium and Wizz Discount Club. Their loyalty model is based on providing additional services after paying for a subscription. Recently, however, there has been a shift toward subscription-based loyalty programs, in which participants pay a subscription for access to benefits that offer real value.

Consumers are becoming more aware and selective about sharing their data with companies as part of a loyalty program. What does this mean for brands that want to develop such a loyalty model in 2022? On the one hand, the audience for the paid model will be more selective. On the other hand, it will enable the company to personalize its services more and provide more quality customers.

It turns out that members of paid loyalty programs are up to 60% more likely to spend more money on a brand after signing up for its paid program. Because consumers have paid for their membership, they are more likely to purchase and remember to take advantage of available benefits.

Cookie-less world

The use of cookies for marketing purposes has been the standard for years to ensure efficient targeting of campaigns. Segmentation, based on data other than one’s own, will be virtually impossible in the new reality.  Ultimately, third-party cookies are set to disappear in 2023. However, fast-growing brands are taking the lead in the face of this change and are already opting for a self-serve data strategy. It will be crucial for marketers to prepare a holistic approach to the change.

2022 is the last moment to find new solutions for a cookie-free world. One way to deal with the new reality will certainly be loyalty programs. They can become the main tool for collecting zero-party cookies. Companies should already be building their own databases to help them connect with their customers. With the announced changes in customer data acquisition, there are growing cyber security challenges. Brands that demonstrate transparency should not be afraid of this. With their clarity in how they acquire and use data, they can expect up to 2.5 times more engagement from customers, including to hand over their personal information.

Commitment to social issues

Corporate social responsibility (CSR) is an element that an increasing number of companies are interested in. There is a growing number of brands on the Polish market that consciously engage in social issues. Clothing companies are promoting the idea of second-hand and second-hand clothes, and the banking sector is calling for environmental protection. It turns out that nearly 95% of Generation Z, those who are now entering the workforce and becoming conscious consumers, expect companies to take a stand on important social issues. In turn, 9 out of 10 customers say they are more likely to buy products they consider useful to society. Consumers are more loyal to brands that engage with the environment and address social inequalities. Although CSR activities usually do not increase sales, they significantly influence positive brand perceptions.

Technological transformation of loyalty

In a rapidly evolving digital world, companies are facing more pressure than ever to respond more quickly to market changes, shopping trends and customer expectations. Brands are changing their approach to implementing loyalty programs and are showing particular interest toward solutions based on the latest technologies. The new reality also means new challenges, requiring faster decisions, faster reactions, faster changes. A fundamental step in building a competitive advantage is therefore to invest in technology.

With the increasing amount of data and new points of contact between consumers and brands, there is a wide scope for personalization of services. It’s no longer just access to real-time analytics that counts, but also the ability to further differentiate loyalty activities, with matching scenarios to sales performance and even – to the needs and behavior of a specific user. In order to make the workflow between the specialists of each department responsible for the loyalty program as easy as possible, it is worth paying attention to innovative low-code loyalty program management solutions. Low-code systems use a graphical interface and allow, without writing intricate scripts, to define offers and rules in the program.

Technological advances are fostering even better, more precise alignment of loyalty mechanisms with business strategies. The best-performing companies are tackling the entire customer experience comprehensively – from activating engagement to rebuilding customer data strategies. This requires collaboration across all departments of the organization. Leaders work together to create a 360-degree engagement that includes customers, data and customer experience. Agility, readiness to embrace new technologies and channels, and a strong data-driven consumer approach are key trends in loyalty programs for 2022.

LOYALTY POINT is implementing a project with Contribution from European Funds. Learn more