LOYALTY AT SCALE: NEVER UNDERESTIMATE THE IMPORTANCE OF OMNICHANNEL
Published on August 03, 2020
Though a large majority have embarked on their digital transformation journey, the coronavirus pandemic has sparked a growing urgency for those lagging behind, forcing marketers and brands to accelerate their pace of digitalisation. As consumer behaviours, habits, and preferences have shifted in favour of online alternatives, conventional forms of marketing such as out-of-home advertising and traditional loyalty programmes have been rendered ineffective.
More than ever, brands need to adapt and reinvent their strategies in order to engage and appeal to customers across a spectrum of channels and platforms or risk being left behind. Faced with a contracting economy that is expected to see global economic output down by $8.5 trillion in the next two years, with cost-efficiency increasingly a priority, it may be prudent to look at retention instead. In fact, increasing customer retention rates by 5 percent can prompt a profit increase of 25 to 95 percent. As companies start cutting costs, customer retention is proving to be a much more appealing and cost-efficient proposition.
And more importantly, what this highlights is the growing importance of customer loyalty in times of crisis. As a core marketing strategy across multiple industries, having a strong loyalty programme across multiple touchpoints can prove to be a powerful factor in not only retaining but also growing a more loyal base of customers.
From traditional to omnichannel, physical to digital
Today, customer centricity should be at the foundation of every marketing strategy with customer experience as a focal point. This means having a deeper understanding and appreciation for your customer’s needs as much as their circumstances to ensure that every engagement with your brand is as relevant, convenient, and valuable to them as much as possible.
Naturally, with the majority of the world’s consumers still largely stuck indoors, a push to adopt an increasingly omnichannel strategy is paramount. In fact, Omnisend’s Omnichannel Marketing Automation Statistics Report found that brands that employed omnichannel strategies saw a 66.12 percent customer retention rate as compared to single-channel marketers who only had a 34.8 percent retention rate. With customer retention and loyalty so critical to surviving in a post-pandemic environment, it’s clear why implementing an omnichannel approach makes perfect sense.
So, what exactly is an omnichannel loyalty strategy and how should brands go about implementation?
At its core, an omnichannel strategy integrates customer engagements into a singular and unified brand experience that leaves customers feeling that it was personalised just for them. As brands move from traditional to omnichannel, their loyalty programmes have to go beyond merely rewarding spend and extend to rewarding engagement. From partnerships across a broad range of platforms to novel opportunities for rewards redemption, brands can reimagine ways to re-engage their customers by creating personalised experiences with customer centricity in mind.
When building an omnichannel strategy, brands should consider:
- Increasing customer touchpoints: Digitalising can help broaden a brand’s range of touchpoints and extend promotions across various channels—whether on a website, in-app, or on social media—to provide maximum convenience and liquidity for customers.
- Rewarding engagements: Going beyond traditional points and rewards, brands should look at rewarding customers for interaction and engagement, which will help to increase brand connection.
- Utilising data for optimal customer experiences: With omnichannel and digital loyalty programmes, brands can collect better data from customers and leverage this data to provide customers with more targeted and personalised rewards based on their preferences.
Today's customers don't just want a transactional loyalty programme, where they earn points for each purchase. Instead, they expect personal and authentic experiences, and this is where omnichannel’s integrated and seamless offering can make every customer feel valued.
Making a necessary pivot
The pandemic has ultimately served to shine the spotlight on the necessity of an all-encompassing loyalty strategy that is both engaging and relevant. In navigating an unprecedented scenario, brands have explored cross-platform opportunities for more innovative ways to garner stronger customer loyalty. At a time when customers transact less, purchase less, and spend less, brands must consider alternative methods to allow customers to derive greater value from their programmes.
This isn’t an entirely surprising scenario and this need to pivot is one that we, at Aqilliz, have equally come to terms with as well, in the second phase of our blockchain-powered loyalty programme pilot, developed as part of the Infocomm Media Development Authority (IMDA) Blockchain Challenge and MyRepublic to explore the applications of blockchain for greater operational efficiency and business model innovation. Conducted in the first quarter of 2020 as Singapore began to enter its “circuit breaker” period, the importance of digital channels cannot be clearer, with customers no longer able to visit MyRepublic’s retail space to redeem their points for physical vouchers—a crucial step to the lifecycle of the loyalty programme. Though unprecedented at the time, it points to a need for greater agility when loyalty programme owners consider avenues for redemption, exchange, and earning rewards.
From crisis-mode to new normal
As we move from new normal to next normal, as an industry, we need to re-evaluate the practices that we have in place across today’s loyalty ecosystem. Even prior to the pandemic, a large majority of pain points stemmed from inflexible redemption policies or complicated redemption processes that deterred users from fully maximising the benefits of a programme. Now is as good a time as any to look at diversifying redemption opportunities, as well as broadening the opportunities for customers to earn more points, which can be helpful in encouraging spend.
From what we’ve seen, customer-first omnichannel strategies that utilise all-encompassing touchpoints from physical to digital can prove to be what makes the difference between one-time customers and long-term loyalty.
For a prime example in how to pivot, look no further than the airline industry. With industries like travel and tourism shuttered for the foreseeable future, we’ve seen airlines tap into bolstering their partner retailer networks to boost the value of their co-branded credit cards. Delta Airlines’ co-branded American Express programme offers four times the usual amount of miles for purchases at US supermarkets.
With consumers increasingly relying on digital infrastructures, a convenient, seamless experience has now become the norm and loyalty programmes are not spared from this expectation. Companies such as American retailer and grocer Kroger have caught on to this by combining checkout, payment, and loyalty in their all-in-one app-based product Kroger Pay. Through the app, shoppers are able to immediately access their digital coupons while checking out. By integrating various offerings and loyalty programmes together, brands can offer an increasingly rich ecosystem of services.
As we start taking tentative steps to emerge from the pandemic in the coming months, we need to reimagine loyalty as a whole and consider a model that’s omnichannel, value-driven, and engagement-based by design. The next normal is now underscored by a reality where customers fundamentally live and behave differently—and brands will do well to remember that the rules of engagement have changed.