Trying to Stand Out

With customers increasingly willing to stray, brands are upping their game on loyalty programs

- MEGHAN GUNN

THE CUSTOMER IS KING Retailers of all kinds are experimenting with a variety of new and different ways to make their most faithful patrons feel special and rewarded.

BRANDS ARE OFFERING MORE than just freebies and cash rewards to get customers to stay put these days. “Probably the biggest trend has been to go from a strict buy this, get that' to a more experiential, lifestyle kind of focus," says Howard Schneider, who has worked in the brand loyalty space for over 20 years and helped pioneer programs at companies like Hilton Hotels and Neiman Marcus.

Over 90 percent of companies now have some type of customer loyalty program, according to a recent Accenture report. The average U.S. household is enrolled in 18 different loyalty programs. Some of those programs are hugely important to company bottom lines. Starbucks Rewards members, for instance, are now responsible for 53 percent of the dollars spent at the coffee chain.

With so many offerings, the question becomes how to stand out and how to engage customers long-term. Jess Huang, a Partner at McKinsey & Company says, “Loyalty has been up for grabs during the pandemic—75 percent of consumers have tried new digital behaviors, channels and brands, and 40 percent switched brands entirely."

Huang and Schneider agree two things are now key for loyalty programs: offering one-of-a-kind experiences and personalization.