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While customer acquisition is essential for growth, loyalty remains crucial for long-term sustainability. Now more than ever, and with a potential recession looming, we’re starting to see just how powerful loyalty initiatives can be in helping companies overcome the cost of living and inflation crisis.
In this post, we’re going to explore some of 2023's most crucial loyalty trends, unraveling what the future of loyalty may look like and what this means for businesses trying to set up or revamp their own loyalty offerings.
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According to Statista, the global customer loyalty market is worth 5.5 billion U.S. dollars and is expected to rise well past $24 billion by the end of 2028.
Understandably, outgoing costs are currently a key area of concern for many businesses, especially those tightening their purse strings in anticipation of a recession. Therefore, it makes the most sense for companies to focus their investment in areas where they’ll be the most profitable.
plan to increase their investment in customer retention ahead of the inflation crisis and potential recession
What new-age loyalty looks like may be open to interpretation, but the value of loyalty remains undisputed. Businesses that reduce their churn rate by just 5% can expect to see an increase in profit of between 25% and 125%, not to mention the chances of selling to an existing customer is as much as 55% higher than selling to someone new.
As strategic focus starts to settle firmly on the power of loyalty, we’ll undoubtedly start to see new cost-driven innovation as a result. Here are some of the loyalty trends to keep in mind this year.
As the cost of living crisis rages on, consumers are looking for new ways to make their money go further and spread the cost of payments.
of consumer spending has been impacted by rising prices and living costs
In the last 12 months, Google Search Trends for Cashback and Buy Now Pay Later schemes have been on the rise, highlighting a willingness to exchange effort for monetary reward and a growing need to explore new ways to pay.
As more competition rushes to enter the growing Cashback and BNPL market, cost-effective and profitable loyalty schemes will have an increasingly vital role to play in helping both Fintech market leaders and new disruptors to attract, engage and retain their customers.
The personalization of loyalty rewards remains one of the most significant drivers of customer engagement. Data-driven personalization can be used to show customer appreciation, help build engagement, and can also be used to tailor reward redemption options.
of consumers say they’re more likely to be loyal to brands that demonstrate an awareness and understanding of their personal interests
While data-driven personalization may not be accessible to all businesses, offering a choice of rewards enables businesses to demonstrate a deeper understanding of customer needs and an awareness of their individual preferences.
In sectors like banking and fintech, which cannot use their own products or services as rewards, partnerships with platforms like Tillo make it easy for them to deliver and manage their loyalty rewards program and connect with a global catalog of leading brands.
If businesses want to maximize customer participation and engagement in their loyalty programs, then convenience is king. We’ve been watching the shift towards digital rewards for a while now, but in 2023 ensuring that digital rewards are also mobile-friendly will also be a key consideration.
of consumers would engage more with their loyalty program if it and its rewards were mobile-friendly
Gamification is also becoming an increasingly important aspect of loyalty apps and programs. Roughly 56% of loyalty programs currently employ some form of gamification and see almost double the participation as a result.
Businesses looking to evolve their existing loyalty offering or bring in new loyalty programs in 2023 can’t ignore the importance of delivering an exceptional digital experience, which in itself becomes a factor of loyalty.
While rewards may form the foundation of a good loyalty program, other factors, such as inclusivity, are becoming increasingly important to consider, especially for those businesses looking to attract a younger audience.
of consumers admit to being more loyal to brands that show a commitment to addressing social inequities
Through a greater understanding of the core values that are most important to their audience, businesses can start to demonstrate their awareness and responsiveness by personalizing their loyalty offerings to ensure greater diversity.
But simply marketing inclusiveness and diversity isn’t enough to earn loyalty. Gen Z, in particular, also requires businesses to demonstrate authenticity, expecting them to take a stand on important issues like race, sexuality, disability, and gender inequality.
Society is constantly evolving; therefore, so must loyalty initiatives and the technology businesses use to deliver their loyalty programs. 2023 is going to be a big year for loyalty, not just for B2C retailers but for established B2B companies and also those in new emerging sectors like neo-banking, fintech, and crypto.
If you’re discovering the power of loyalty for the first time or revamping your existing loyalty program, get in touch with Tillo today to learn more about our innovative platform and how it seamlessly connects businesses with 2000+ global brands and 100+ partners.