Customer Loyalty and an Emotional Connection for the New Reality

Fewer shoppers, airline passengers, car rentals and hotel stays throughout the first few months of coronavirus have upended many loyalty programs, with many taking drastic steps to retain loyal members who, through no fault of their own, have become more infrequent customers. Most airlines, for example, have extended elite status regardless of miles flown. Many hotels are waiving points expiration dates, reducing status thresholds and extending status levels through the end of 2021. Some credit card companies have shifted from travel-based points to “everyday rewards” that award points for food delivery, streaming services and other home-based goods and services.

While the long-term ramifications for loyalty programs are still unclear, what is certain is that customers are drastically altering long-standing behaviors and buying patterns. There’s been a documented transition toward a more digital customer journey, an increase in contactless purchases and a similar increase in home deliveries, particularly groceries. These changing behaviors are forcing brands to rethink the customer experience through the lens of convenience. As customer values evolve, brands must adapt to new expectations for what a relationship with a brand built on trust looks like.

What Customers Want from a Loyalty Program

Shifting behaviors and a transition to a more digital customer journey will require brands to understand and measure the value of every customer interaction; as customers embark on new, highly unpredictable journeys, brands that deliver relevant experiences throughout an omnichannel engagement will establish trust, thereby strengthening existing customer relationships and building new ones. Loyalty programs in a post-pandemic economy may take a new shape to reflect the new reality, and their value to a brand will likely increase in parallel with the increasing value of customer interactions.

Fortunately for brands, customers are already on record with what they want from a loyalty program, and it has less to do with price, product or points than one might think. In Bond Brand Loyalty’s ninth annual loyalty report (2019), research revealed that traditional rewards account for just 25 percent of what drives loyalty member satisfaction. Personalization done well, meanwhile, results in a 6.4x lift in member satisfaction with a program. Furthermore, eight in 10 consumers surveyed said that they wanted more of their data to be used to improve personalization. The report concludes that “top programs lead by prioritizing the program experience over the reward itself.”

As the economy begins to re-open, personalization in lieu of a loyalty program’s traditional rewards may, for instance, take the form of a brand granting a status extension as a show of empathy for a customer’s new circumstances. Perhaps a brand provides specialized offers that are relevant to a customer’s unique situation. Or it tailors a loyal member’s experience in accordance with the member’s evolving preferences and behaviors, with an enhanced focus on convenience over a transactional approach.

A Deep Customer Understanding and an Emotional Connection

To meet the expectations of their loyalty program members for a personalized omnichannel experience, brands must develop a deep understanding of each customer at an individual level. Being able to deliver a relevant experience in real time at every touchpoint regardless of channel requires a single view of the customer. By knowing everything there is to know about a customer – all customer identifiers (addresses, emails, devices, social, etc.) as well as complete behavioral and transactional data – a brand has the ability to infuse context into every customer interaction. Consistent relevance is the foundation of a meaningful, contextual relationship with a customer at an individual level. This is what the Redpoint Golden Record delivers. Built upon singular identity resolution capabilities, the golden record provides a brand with the deep customer understanding from which to build and extend a deeply personal and meaningful relationship throughout not only a unique customer journey, but the complete customer lifecycle.

In a post-COVID-19 world, loyalty programs that establish a deeper customer understanding will be better positioned to cement an emotional connection, which has been shown to increase retention and, ultimately, drive new revenue. A 2018 study from Motista found that consumers with an emotional connection to a brand have a 306 percent higher customer lifetime value (CLV) and are far more likely to recommend a brand vs. when there is no emotional bond (71 percent vs. 45 percent).

While personalization has always been important for delivering a superior customer experience, especially for a brand’s most loyal members, sudden disruption and evolving consumer behaviors change the dynamic. When the dust settles, a personalized experience that is consistently relevant, forges a connection and shows empathy is more apt to deliver value to a customer and a brand than one rooted in a transactional approach.


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