The Changing Rule Book for Customer Loyalty in 2021

Loyalty programmes have long been a way of driving repeat purchases, and fostering long-term relationships between business and customer. Given the extent to which many businesses are reliant on a dependable core of uber-loyal customers, any decline in the effectiveness of the loyalty program is going to be worth paying attention to.

Sure enough, loyalty programmes are getting less effective, thanks to demographic shifts. While generation Z might profess to appreciate loyalty programmes, this isn’t reflected in actual adoption. If your business is predominantly targeted toward younger people, then this will be an acute concern.

So how might you change your approach to better lure in those all-important young customers.

Go Mobile

If you aren’t yet offering your loyalty scheme with the help of a mobile app, then you’re missing an opportunity. Mobile phones are used to make an increasing number of online purchases, with mobile sales set to outstrip desktop ones by 2023. This change is largely being driven by younger people, many of whom might not even have access to a desktop or laptop machine. If you can offer these people an app that’ll do the same job as a loyalty card, then you can be fairly sure they’ll make use of it. 

Digitise your Rewards

Given that your would-be customer base is spending an increasing fraction of their time staring at their smartphone screens, it only makes sense that they be handed digital rewards. This trend might have been accelerated by the Covid-19 pandemic, but it’s been in motion since long before then. The ‘premium delivery’ model pioneered by Amazon’s Prime is one example of a perk being offered to loyal customers – and it’s something that just about everyone appreciates.

Go Woke

The conventional wisdom among many marketing departments is that rewards should contain an activist dimension. Latching onto whatever environmental, social or political issues are captivating your customer base might seem like a smart move – that Ben & Jerry’s is sure to taste all the sweeter when it comes with a hefty, saccharine dose of ethics. 

But it’ll take more than simply posting a black square on the Instagram page and putting out a watered-down statement about generalised oppression to win the support of politically-charged gen-Zers, especially if the company doing the proselytising has a history of less-than-ethical practices themselves. This is something of which Ben & Jerry’s themselves can be accused; their parent company, Unilever, faced allegations last year of having underpaid hundreds of millions of pounds in tax.

The circumstances and ethos of your business should inform your approach to ‘activist’ marketing. If you’re running a vegan food business whose primary audience is environmentally-concerned Green Party members, then it makes sense to offer incentives around tree-planting.