Get the Loyal Treatment: Why Companies Should Replace Loyalty Rewards With Loyalty Management.


Most retailers are well aware of the importance of customer loyalty. While it is always important to bring in new business, your stable, returning customers are the ones who keep a business afloat — and the stats show it. It is 6 to 7 times more expensive to acquire a new customer than to keep one. Furthermore, existing customers are more valuable — they spend an average of 67% more than new customers.

It is no surprise then, that retailers are constantly looking for ways to inspire loyalty in their customers. However, customer loyalty is becoming increasingly important, yet more difficult to foster — 70% of consumers agree that technology has made it easier than ever to take their business elsewhere. So in a time when clients are constantly having their heads turned by better reviews and unmeasurable social “buzz,” how do companies continue to woo their existing customers?

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Customer Loyalty is Evolving.

In order to piece together current best practices, it is important to first understand what the idea of customer loyalty is, and where it came from. What is customer loyalty? It is more than just a customer that returns to buy something from your company a second or third time; it is a customer essentially making a conscious decision to spend a higher amount of their retail spending at one retailer over its competitors, often based on something unique that that retailer does.

That something unique is at the crux of what fosters customer loyalty, but the vagary often makes it difficult to pinpoint. Eventually businesses sought to tempt customers into repeat visits using certain loyalty programs that were either points based, price level based, or transaction based. And indeed, these practices are prevalent even today. However, they are becoming increasingly ineffective at keeping customers loyal. In fact, eMarketer found that active participation and reward redemption rates are below 50% for most brands. Furthermore, 77% of rewards based loyalty programs fail within the first two years, and 89% have negative social media sentiment.

So what is the problem? It stems from the attempted commodification of loyalty. Loyalty was no longer differentiated or strategic, just another box to check. Too often, companies instigate a loyalty program, and then neglect their customers on the more personal level that they crave in this modern environment — 66% of consumers say they are likely to switch brands if they are treated like a number instead of an individual. Even if a rewards-based system offers customers something tangible, it does not make them feel wanted.

Furthermore, these kinds of systems soon become laborious. Customers become fed up with having to keep track of their own points or status, and many are tied to a single channel —  in-store.

For the past few years then, we have seen a rise in more points-based rewards programs that function across multiple channels, such as in an app, in-store, and online. But even with these possibilities, the aforementioned problems with personalization exist.


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Loyalty Needs to Be Reimagined.

To keep up with the wants and needs of customers then, the idea of loyalty must continue to evolve. Rather than points-centric reward models, companies need to leverage data and technology to improve communications in marketing, service, sales, and more. In short, loyalty programs must be replaced by loyalty management.

Loyalty management means evolving from providing an activity that motivates a purchase, to a comprehensive, immersive program that accompanies a shopper throughout the entire lifecycle. It means creating personalized, one-to-one customer journeys. The most effective loyalty programs of today are ones that focus on experience personalization and relevancy. These programs can be implemented across many channels and are easy to use.

So how do you achieve this level of loyalty management? It comes back to using data and technology efficiently. With more customers than ever online, and more channels to reach them, the information required to get to know your customers is readily available, but difficult to access when companies are forced to spread themselves so thin. That is where CRM (customer relationship management) comes in.

Salesforce Drives Loyalty Through Relevance.

CRM platforms like Salesforce are the most important tool in effective loyalty management. Using a CRM, companies are able to achieve full multi-channel campaign management from one place, tracking interactions with the brand, points accumulation, customer analytics, conversion rates, real time offers, and more.

But what really makes Salesforce special is what it does to empower companies with everything necessary to grant those all-important customer journeys. In essence, an effective loyalty program needs three things:

  • A single view of the customer: the ability to understand who the customer is, across all touchpoints.

  • Personalization: enabling one-to-one engagement across any channel and across every step in the shopper’s path to purchase, and then beyond — after all, customer service is an essential factor in encouraging customers to return.

Proactivity: driving engagement with predictive analytics and recommendations. 57% of consumers agree they’re willing to share data with companies that send personalized offers and discounts.

Salesforce is the best platform to facilitate each of these key sectors of loyalty management. Marketing Cloud allows companies to use relevant data to create personalized, scalable journeys across email, mobile, social web, and more. Commerce Cloud provides the tools to create a seamless shopping experience, with omnichannel capabilities — allowing retailers to sell and fulfill anywhere. Service Cloud allows for more thorough management of customer service, extending each customer’s journey beyond purchase and encouraging loyalty in the process. Furthermore, through connecting two or more Salesforce solutions, brands are able achieve a full 360 degree view of each customer, and present them with exactly what they need, when they need it.

Long gone are the days when companies could simply hand out punch cards to their clients, and rest easy that that was enough to keep them coming back for more. Modern customers want brands that that they know, and more importantly, that know them. Loyalty management is necessary to achieve that understanding, and aCRM is the best tool to help you do it.

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