The New York Times recently published “Cultivating Brand Loyalty in Even the Toughest Customer” which discusses how customer loyalty is evolving. Here are some key points from the piece:

  • Households, on average, hold membership in 29 loyalty programs across the retail, financial services, travel and other industries — that’s a total of 3.3 billion nationwide, up 26 percent from 2013, according to a 2015 report by Colloquy, a loyalty marketing research company. But most households use only 12 of those cards, a proportion that has dropped 4.5 percent from 2013.
  • Loyalty programs do attract customers, according to a report to be issued on Tuesday by Bond Brand Loyalty in collaboration with Visa. About 80 percent of the roughly 19,000 consumers in the United States and Canada who responded to an online survey said they were more likely to continue doing business with brands that offered loyalty programs. But to be successful, the programs can no longer offer just a discount or a free dessert.

  • Research also shows that while people say discounts are important, they also “overwhelmingly say they want special treatment and offers not available to others in a loyalty program,” Ms. Collins said. “They come for the perks, but they stay for the experience.”
  • Sephora, the cosmetics retailer, is a great example of that dynamic, said Scott Robinson, vice president for design and strategy at Bond Brand Loyalty. Sephora’s rewards program offers free samples and tutorials to loyal customers. It has three tiers, and the top spenders are invited to free closed-door events like Beauty Before Brunch, where they receive makeup lessons, discounts and a goody bag.

The takeaway? Points alone won’t cut it anymore. Customers expect personalization and unique experiences from the brands that they engage with regularly. The good news for brands is that it’s not difficult to deliver this type of service. The wide use of smartphones opens up many innovative opportunities to interact with customers in a meaningful way. Here’s an example of how our client, Gotstyle, is doing that.