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When it comes to buying behavior, loyalty programs are proven performers.
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Fast-surfing consumers are trying out new brands, stores, products, and websites. Can loyalty programs keep pace?
Making loyalty pay
In this edition:
A quick briefing in five—
or a fifty-minute deeper dive
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One key enabler: lower barriers for reaching consumers.
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Why customer experience is key for loyalty programs
Brand new
But consumers are more willing than ever to try new brands, stores, and websites.
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Paid up
One response converts members to paid loyalty plans. Paying members can be worth several times more than nonpaying ones.
Why customer experience is key for loyalty programs
MIT Sloan Management Review
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Responding to the great acceleration requires companies to experiment with and invest in new digital technologies.
The quickening
McKinsey Quarterly Five Fifty
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Customer loyalty: The new generation
Interview
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Coping with the big switch: How paid loyalty programs can help bring consumers back to your brand
Article
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The quickening
McKinsey Quarterly Five Fifty
Customer loyalty: The new generation
Interview
46
26
40
20
32
18
21
11
Choose
brand over
competitors
Increase
frequency of
purchases
Pay higher
prices to stay
with a brand
Intend
to increase
their spend
Top quartile
Bottom quartile
Customer behavior in loyalty programs, by program performance, % of respondents
100%
of US consumers have tried different stores, websites, or brands during the COVID-19 crisis
75%
of these consumers expect to integrate the new brands and stores in their post-COVID-19 lives
60%
—Jess Huang, McKinsey partner
It’s not that consumers are necessarily becoming less loyal, it’s just so much easier to access them and so much easier for them to try something new. So brands are really trying to figure out a way to develop and maintain that relationship with the consumer.”
“
43
59
62
More likely to buy
weekly since joining
More likely to choose
brand over competitors
More likely to spend
more on the brand
Behavior of customers in paid loyalty programs, % of respondents
Ecosystems
Companies can expand the reach of their programs—and how often they’re used—by pooling data with other companies in an ecosystem of brands, using seven design principles:
Preparing for loyalty’s next frontier: Ecosystems
Article
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Ecosystem participants together leverage the full stack of consumer data across brands to offer personalized messages, offers, and experiences.
Every brand must have its role in the ecosystem and provide value to it through its products, services, or both.
Brands should codevelop common features and benefits to reinforce the program’s underlying appeal.
Keeping programs simple for consumers requires integrated sign-ups, usage, and redemption approaches.
Companies must commit to the partnership by allocating adequate marketing spend and having clear agreements about sharing consumer data.
Brands should enter the partnership with aligned strategies and goals, defined roles and responsibilities, and a process for managing risk effectively.
Brands within the ecosystem need to commit to standards and processes for tracking key performance indicators, adhering to regulations, and establishing protocols for connecting technologies and sharing data.
Shared
Synergistic
Unified
Seamless
All in
Aligned
Connected
Coping with the big switch: How paid loyalty programs can help bring consumers back to your brand
Article
Preparing for loyalty’s next frontier: Ecosystems
Article