Shifting Your Retail Loyalty Strategy from Rewards to Outcomes

Loyalty Strategy

Retail loyalty programs have historically offered simple transactional benefits such as free shipping, discounts, rewards, free gifts, point collection, and VIP tiers with first access to products, sales, or experiences. The logic is simple—a customer belonging to a loyalty program has a stronger propensity to spend more and return to the brand again and again. But a simple loyalty strategy focused on rewards programs is not enough anymore. The way customers engage with brands—and how they make their buying decisions—have changed along with the factors influencing loyalty.   

From rewards programs to a loyalty strategy based on a deeper emotional connection and values-based alignment. Customers naturally gravitate towards brands they feel an emotional connection to. Achieving this connection requires a true understanding of your customers and what motivates their behavior. Then you can shift your engagement strategy to develop a personalized, frictionless experience from start to finish. An effective loyalty strategy builds trust and emotional connections, and leverages communication channels and technologies to improve the customer-brand relationship. 

Evolving Your Loyalty Strategy into Outcomes

If your brand has an established, published loyalty program and you are trying to determine what’s next, here are best practices to help you achieve greater maturity in your loyalty strategy:    

1. Measure your loyalty program ROI

Many programs don’t adhere to the most basic rule—ensuring the lifetime value of a customer exceeds the cost needed to acquire them.  This means that you need to understand the ROI of your customer loyalty program and how it impacts your bottom line. Additionally, identifying and consistently measuring outcomes to ensure you deliver on the business objectives for the program is vital to the long-term success of loyalty.  Without these metrics, it is impossible to understand—and socialize—the value of your loyalty program.      

2. Understand your customers 

Long gone are the days when simply inserting your customer’s name at the top of a targeted marketing email is enough. Customers expect you to know and recognize them at every touchpoint—regardless of channel—and for every experience to be frictionless. They want offers, content, and experiences to be customized based on their purchase behavior. To do this requires use of smart data management, segmentation, and analytics to create rich, actionable insights and a personalized engagement strategy. For some brands, poor data management can be particularly problematic when data is scattered across martech silos. Learn more about how a multi-brand athletic apparel giant solved for a disconnected loyalty experience.   

3. Revisit your data management strategy

The degree of personalization possible is largely dependent on the technology and data at your disposal. Many brands have been slow to develop new digital channels that customers now prefer (e.g., apps, conversational virtual assistants, and messaging options). Brands without effective data management strategies—how customer data is captured, stored and centralized—will struggle to achieve effective personalization.    

4. Reimagine customers’ end-to-end journey

The insights you gain into customer touchpoints, preferences, behaviors across interactions, and demographic segmentation should then fuel your business decisions. Ensure you’re using an effective omnichannel engagement model to allow customers to switch seamlessly between channels and experience consistent, personalized interactions. These frictionless experiences help customers feel recognized and valued, which in turn raises their satisfaction and their motivation to deepen their relationship with your brand. It is also by reimagining the end-to-end journey that you can create a proactive, targeted cross-sell/upsell strategy and leverage next-best action tools to capitalize on customer stickiness. The more products a customer purchases, the higher likelihood they will remain more loyal to a brand. 

5. Gather customer feedback

Building an effective voice of the customer (VOC) program to understand member feedback about their experiences and expectations with the program will help you make better decisions. It is also important to gather customer feedback to determine why your program is or is not delivering a positive ROI, incentivizing the intended behaviors or driving advocacy. Too many surveys or feedback requests can be annoying to customers though, so it’s important to understand how you’ll use the insights you gather to improve CX. 

Once you understand the quantitative measures from ROI calculations, it’s time to dig into the qualitative measurements from your members’ voices. While direct feedback, such as member interviews, chat transcripts, and member surveys will always be the most useful, there’s also a place for indirect feedback—social media posts and customer/product reviews.   

Deepening Customer Relationships 

An effective loyalty strategy must be core to how brands and customers interact, building trust and emotional connections, and leveraging communication channels and technologies to improve the customer-brand relationship.  As customers encounter a macroeconomic climate with a rising cost of living plus high inflationary pressures, they are feeling a heightened and continuous pressure to spend consciously. Developing a true, emotional connection with customers who choose to spend with you is perhaps more important today than it has been over the last decade. Not only will a powerful loyalty strategy benefit your customers in a time of financial need, but it will also enable your company to break from the pack and rise above the competition.   

Seeing some gaps in your current loyalty strategies? Learn more about Concentrix’s end-to-end loyalty solutions tailored to retail clients and how we can help you reimagine your loyalty strategy. Concentrix’s Retail Practice will work with you to develop human-centered loyalty strategies, improve digital enablement and omnichannel organization, resulting in rewarding journeys that drive loyalty as an outcome.  


Jodi Rausch

Managing Director, Integrated Loyalty Solutions


Concentrix + Webhelp is now Concentrix. Bringing together integrated technology and services to power your entire business.