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Hit Your Growth Goals with a Smarter Customer Loyalty Strategy

Brands using loyalty programs to drive growth effectively are doing so by embedding them across every part of the customer experience. There’s a growing recognition that long-term customer engagement requires more than just rewards — it demands a strategic, holistic approach that permeates the entire organisation.

Loyalty can’t be siloed into one stage of the customer journey. While traditional approaches to loyalty have focused on the last stage well after the initial transaction, loyalty is better thought of as a persuasive element that spans from acquisition to retention to engagement.  

Done right, loyalty transcends retention – it’s about creating experiences so compelling that leaving is the last thing on a customer’s mind. Transitioning from traditional points and tier-based systems, modern loyalty programs have evolved into rich, experience-based strategies that prioritise personalised experiences over transactions. 

With 80% of customers believing “customer experiences should be better given all the data companies collect,” the pressure is on brands to deliver exceptional, personalised interactions across every touchpoint. Yet, as revealed in the Ninth Edition State of Marketing Report, only 39% of marketers say their customers get full loyalty program functionality across touchpoints. 

All this means that loyalty is no longer just the remit of marketing. Ram Machiraju, Global VP of Loyalty at Salesforce, says, “Customer loyalty is often seen as a marketing initiative but should be an enterprise-wide strategy.” An effective loyalty program is holistic and applied consistently across the customer lifecycle and departments. 

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Advocates and Brand Ambassadors Drive Low Cost Acquisition

By adopting an enterprise-wide strategy for loyalty and using data to understand top customers, brands can drive growth across every stage of the customer funnel — from acquisition to engagement to retention. Data reveals that about 10% of future revenue could come from just the top 1% of customers. These high-value advocates are already used to target advertising and find lookalike audiences. Tapping into the social spheres of these top customers can amplify their advocacy, attracting new customers who are likely to be immediately loyal and enhancing the loyalty of existing ones.

During a recent event, I was joined by a roomful of marketing professionals who are all facing the pressure to do more with less. As brands face tighter budgets with customer acquisition costs increasing by 60% over the last five years, the potential of referral marketing to acquire new customers at a fraction of the cost of other channels was a key talking point. 

Referral marketing is proven to be highly effective, offering twice the ROI compared to traditional paid media and achieving 37% higher retention rates. However, its success is contingent on using real-time customer data to personalise experiences across all touchpoints and having the technology to do so. 

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Transforming Customer Loyalty at Speed with Data and AI

What do customers really want? It varies, but one constant is the desire for personalised experiences, now achievable at scale through the strategic use of data and AI. Rather than a standardised points and rewards tier program, consider the customer loyalty a brand could build if the reward was more tailored to the individual and offered more value than a discount. Free shipping, early access to sales, preferential services, exclusive merchandise, extended warranties, and ‘money-can’t-buy’ experiences are all potential loyalty levers that can be strategically pulled. 

Achieving this degree of personalisation requires a platform capable of harnessing and actioning unified customer data. AI-driven decision-making tools, such as those available in Einstein 1 Sales and Loyalty Management, automate and optimise the delivery of tailored experiences and rewards at scale. By analysing a customer’s interaction history and projected future value, these tools can pinpoint the most effective offers, enhancing the customer’s journey and cementing their loyalty.

Other Loyalty Management AI features like scoring systems, predictive analytics, AI co-pilots, and automated content generation work together to empower teams to deliver personalised experiences efficiently. The right technology can satisfy both the customer’s expectations for personalisation and the marketer’s goal to build deep, lasting customer relationships. 

Recognising the need to keep up with changing customer expectations, IHG Hotels & Resorts is standardising its CRM on the Einstein 1 Platform and is adopting Loyalty Management to enhance its IHG One Reward program, emphasising personalised guest experiences that cater to individual travel needs. 

“Our collaboration with Salesforce will enable us to further enhance the technology, tools, teams, and solutions that power our loyalty program, allowing us to provide personalised content and offerings that ultimately drive a deeper connection to our most valued guests,” says Heather Balsley, Global Chief Commercial & Marketing Officer at IHG Hotels & Resorts.

Keeping Pace with People and Strategy

It’s not just your technology that needs to be ready for the changing nature of loyalty. It’s also necessary to prepare internal teams to embrace a data-driven, customer-first approach that spans the entire customer lifecycle. This approach demands the engagement of every department, beginning with securing buy-in from the C-suite by demonstrating both the value of loyalty and the risks of inaction.

Teams must be equipped with the right tools and capabilities to implement a customer-first strategy effectively. Building agile systems to support this shift — from vision to business case, through validation, prototyping, and implementation — is essential. These systems should include mechanisms for regular feedback to adapt and refine the strategy swiftly.

With a strategic and well-supported approach, launching a new loyalty strategy can be achieved faster than traditional timelines suggest. Properly executed, it’s possible to bring a loyalty launch or rebuild to market within just 6 to 9 months.

Three key principles of a successful customer loyalty strategy

With the current squeeze on marketing teams, there are three core principles to follow as you get started on your new loyalty strategy:

  1. Simplify for efficiency — Integrate loyalty programs with existing technology, using AI and data to boost productivity, so your team can focus on strategy over managing tools.
  1. Brand consistency — Unify all communication channels. A consistent customer interaction approach across all platforms reinforces trust and strengthens your brand identity.
  1. Fast time to value — Speed is crucial. Executive teams expect quick ROI, necessitating technologies that support rapid deployment and swift customer acquisition.

In today’s market, where customer expectations are evolving and acquisition costs are climbing, implementing a dynamic loyalty strategy is vital. By prioritising meaningful interactions and embedding loyalty practices across the organisation, businesses can harness the power of their most effective marketing asset – satisfied customers – to drive sustained growth.

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