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The Growth of Customer Loyalty Schemes in 2020

In today’s markets, from fashion to supermarkets to aviation and everything in between, consumers have never had more choice! Therefore, finding customers and encouraging them to stay loyal to a particular brand can be a challenge. This is where customer loyalty schemes come in. With the right customer loyalty scheme for the target market, brands are able to retain customers, boost sales and build a stronger reputation. But what makes a successful customer loyalty scheme in 2020?

Traditional versus digital methods

We are all familiar with the traditional ‘buy-nine-get-the-tenth-item-free’ loyalty scheme, which regularly come in the form of cards that end up gathering dust in our wallets. One way brands have adapted this more traditional loyalty reward to the modern world is by introducing apps that will not only clock up purchases in a similar fashion to a loyalty card but will also offer other exclusive rewards, such as discount codes or early access to sales.

Sports brand Nike have been particularly innovative with their digital customer loyalty scheme by branching out into several apps. On the Nike App, members can shop for exclusive products and gain access to member-only events, as well as receiving tailored recommendations and a birthday reward for being a loyal customer. They also run successful running club and training club apps, which allow users to track their training progress through workouts alongside the Nike community.

Whilst these training apps do not directly translate to sales in the same way as the Nike App, they do help retain customer loyalty by providing motivation to progress with workout goals and associating healthy lifestyle successes with their brand. In turn, these positive actions become linked to the brand and will encourage consumers to stay loyal.

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The rise of instant gratification

As we have now established, customer loyalty schemes are all about rewards. What is the customer gaining by staying loyal to a particular brand? Equally, as a brand remember that it costs five times more to attract a new customer than retain an existing one, so both the consumer and brand will profit from a successful loyalty scheme.

One clear development in the success of customer loyalty schemes can be seen in the increasing consumer hunger for instant gratification. Buying nine coffees from the same provider and getting the tenth one free does provide incentive to keep buying, but it is nowhere near as enticing as an instant reward. It is unsurprising, therefore, that what we are increasingly seeing with customer loyalty schemes are brands offering attractive rewards for first-time consumers in order to encourage repeat sales. For example, many online companies offer a discount on the first purchase if you sign up to a mailing list or will offer discounts or free shipping on your next order, instantly giving you a reward.

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One industry that instant loyalty reward schemes can play an important role in is the iGaming sector. With so many platforms to choose from, iGaming is highly competitive, so instant rewards are useful in attracting and retaining customers. For example, Greenplay Casino has been noted for its reward scheme that encourages new customers with a welcome package and gradually increases the rewards as customers play more games and gain access to VIP rewards, such as lower loyalty point redemption rates. Offering enticing loyalty schemes is key to helping a particular provider stand out amongst the rest.

A new contender: The subscription scheme

Another innovative customer loyalty scheme on the rise this year is the subscription programme. Rather than supplying rewards for repeat purchases, providers using a subscription model offer incentives to encourage subscribed purchases covering a longer period of time, rather than one-offs: for example, a reduced price per month when subscribing for six months at a time rather than one.

Subscription services are particularly suited to the cosmetic or food supply industries, where products are regularly used and replenished by consumers, thereby making a regular delivery to your door considerably more convenient. Weekly meal providers like HelloFresh encourage users to remain loyal and continue purchasing by providing offers, such as a discount on every third box. Furthermore, this subscription model encourages consumers to make a habit of using a brand’s product and inadvertently creates customer loyalty.

Above all, it is clear that, whatever customer loyalty scheme a company chooses to adopt, it must remain innovative in order to stand out among the rest. Digital communities, instant rewards or subscription schemes are just some of the many options out there in 2020 to encourage customers to remain loyal and build a strong brand reputation.



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