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  • Writer's picture Gonca Bengherbia

5 loyalty trends to watch in 2021

Updated: Jan 17, 2021

By Gonca Bengherbia

1. Fee-based loyalty programmes are evolving

Fee-based loyalty programmes deliver customised benefits in exchange for a monthly or yearly fee. Customers who sign-up for paid loyalty programmes are proven to be higher spenders who are emotionally loyal to the brand. The leading example is Amazon Prime, where annual renewal rates are 90% and members spend four times more than non-Prime customers.

Last year we saw more brands enter this space - its an excellent way to identify and reward your best customers, whilst providing an alternative to traditional points-based loyalty programmes.

In the UAE, the fee-based loyalty model has evolved into a hybrid approach. (a leading market-place) gives customers the choice to pay for immediate access to enhanced benefits or become a free member if they reach a certain order/spend threshold.

With the right mix of customisable benefits, a hybrid approach to fee-based loyalty can drive significant increases in customer lifetime value.

2. Less points, more discounts and real time rewards...

The desire for discounting and real time rewards is becoming a key driver as customers navigate the financial impact of the pandemic. Shoppers are openly cost-conscious and loyalty programmes offering cash-back, real time rewards and member discounting will keep continue to keep customers engaged.

3. FMCG brands direct-to-consumer strategy is accelerating

The pandemic has significantly shifted shopping behaviour, as sales of online groceries and other household goods increase. To keep pace, FMCG brands will continue to innovate new ways to mitigate the loss of in-store sales and keep consumers loyal.

4. More use of gamification and instant gifting to create memorable moments

The rapid growth of the gamification market is down to customers wanting new experiences with brands. Gamification helps customers learn about your brand in a fun and engaging way, whilst making them feel included.

With the right use of gamification techniques, brands can develop a deep sense of loyalty with their customers, that results in increased revenue. Additionally, giving customers a free gift when they least expect is a growing trend this year and shows the customer how much you value them. Brands wanting cut-through will need to invest in memorable moments to build more profitable customer relationships.

5. Giving back builds trust

A growing number of customers, especially millennials and Gen X feel it's important that the brands they transact with share their values and have sustainability at the core of their business. Whilst becoming a fully sustainable business is an ongoing process, giving customers the choice to 'give back' by donating a percentage of sale profits or points to charity is growing in popularity among younger customers and helps to build trust.

Gonca Bengherbia is the founder of Vollodigital,com, a digital consultancy specialising in customer acquisition and retention. Email if you would like to discuss loyalty and customer engagement solutions.

#emotionalloyalty #loyaltytrends #loyaltyprogramme #customerengagement #vollodigital

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