Reinventing Loyalty Programs for the Digital Age

Loyalty programs are failing to engage consumers, according to a new Capgemini Consulting report “Fixing the Cracks: Reinventing Loyalty Programs for the Digital Age”.

Reinventing Loyalty Programs for the Digital AgeThe report outlines how many programs lack personalization and multi-channel functionality – key elements for driving business value among digitally-enabled consumers.

The influence of e-commerce is growing (according to eMarketer, global B2C e-commerce revenues will grow 17.75%, to $1.77 trillion in 2015). According to a Nielsen study , digital natives (aka millennials) are at the vanguard of the shift online, but they are also the most fickle. This ‘flippant’ generation lacks brand loyalty, is most likely to browse before buying, and make channel-agnostic purchases on mobile, online and in-store, sharing customer experiences and canvassing opinions of influencers via social media.

The rise in digital purchasing means companies have more opportunity to track and analyze their most important customers, incentivizing the behavior that drives business value. But despite companies investing heavily in loyalty programs ($2billion a year in the US), digital natives in particular are rejecting them. According to the “Fixing the Cracks: Reinventing Loyalty Programs for the Digital Age” report, 85% of millennial social media sentiment towards loyalty programs is currently negative.

Five ways to make your loyalty program a success

  • Focus less on loyalty and more on engagement. Obsessing about loyalty can come at the expense of healthy customer interaction – interaction that should make a customer feel important and valued, not like a stepping stone to revenue. Loyalty is a by-product of engagement. Focus on engagement and brand loyalty will follow.
  • You can’t reward customers you don’t know. Organizations must build profiles that provide a rigorous understanding of the needs, attitudes and behaviors of their most valuable customers. These profiles must be enriched with data from customer interactions across every touchpoint, from point-of-sale to mobile app.
  • Incentivize the behaviors that support your marketing initiatives. Instead of simply rewarding transactions, incentivize customers for engaging and interacting with the brand in other meaningful ways, such as writing reviews, or participating in game-based campaigns – especially when these open up your brand to valued customers’ social networks.
  • Define metrics that relate to your campaign goals. Traditional operational metrics such as enrolment and redemption rates offer useful insights on the health of a loyalty program, but organizations must also measure the level of customer engagement generated by these programs. Choose engagement-based metrics such as time spent online or in-store, social media sentiment and purchase recency.
  • Integrate the technology. A multi-channel, personalized loyalty program requires a technology platform that is fully integrated with internal systems such as Point-of-Sale, e-commerce, and ERP. The platform must support cross-channel rewards redemption, and enable insight-driven advanced analytics for real-time reward management and personalization.


Click here to download the full report: Reinventing Loyalty Programs for the Digital Age

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  • Andreas Sjöström
    Andreas Sjöström
    Digitala kanaler-expert
    070-609 85 13
  • Therese Sinter
    Therese Sinter
    Nordisk och global kommunikations- och marknadsdirektör, Sogeti
    +46 70 361 46 21