The Importance Of Customer Loyalty In 2021

by, Ray Chelstowski

Loyalty programs have become a vital marketing tool for almost every industry. In this digital age they now not only provide an incentive for customers to come back and spend more money. Instead they have made it easier for them to spend more as they deal with the conditions created by COVID-19. This year many brands have rushed to create or upgrade their mobile app and loyalty program model. The focus is to capitalize on these digital opportunities, and to beat the competition in meeting this shift in preferences.

Brands like Popeyes, Burger King, McDonald’s, Wendy’s, Taco Bell, Chipotle, Starbucks, have all recently either launched new loyalty programs or enhanced or revamped their existing offerings. Every one of them has publicly stated that the goal is simple. They want to boost sales and capture data so that they can continue to provide a more customizable personal experience for customers.

The demand is there from customers, as evidenced by 1-800-Flowers. Not only did loyalty membership grow 112% over the last year. Annual revenue grew by 42% with loyalty members now spending almost $300 with 1-800-Flowers each year.

While many big brands have refined customer loyalty programs and offerings already, there is still room for expansion into the space. Chipotle’s revamped loyalty program is a great example of how programs can evolve. Their race to rewards mobile game and Tesla giveaway in June translated into a sizeable first half 2021 digital sales increase.

Others like Fiverr are moving quickly into the subscription space. In this construct, members know exactly what benefits they receive and can plan to use them accordingly. For freelancer platform Fiverr, the added benefits that come with their paid subscription loyalty program help members be more efficient and have faster access to important tools and services. “We’re seeing that those who are actually using it for a few months have seen an increase of anything between 25% and 50% in their business, which is incredible,” Mica Kaufman, Fiverr CEO.

Technology is fast-paced and ever-changing. Brands that are slow to adopt these systems will generally be the ones to struggle. Those that want to thrive into the future must create individualized and engaging programs, based on up-to-the-minute digital offerings. That will help them develop meaningful relationships with their customers and map a path to long-term success.

ray.chelstowski@kognitiv.com

Comments

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