Is This the Year Loyalty Programs Achieve Their Potential? Revamping and Replatforming for Continued Growth
In this blog, Andrew Doyle, Head of Growth Proposition Strategy, EPAM Continuum, shares his perspective on findings in the 2024 Global Customer Loyalty Report. Produced by Antavo Loyalty Cloud, with EPAM as a strategic contributor, the report includes results from a survey of more than 600 CMOs and loyalty professionals globally.
In what is likely to be another year of uncertainty, where can businesses invest for continued growth? There’s a compelling case to bet on loyalty propositions: The numbers show that loyalty delivers. But not all companies are satisfied with their loyalty offering. Finding the untapped potential within loyalty programs is shaping up to be a key focus this year.
Loyalty Pays
Today, loyalty programs come in various forms — reward schemes, experience offerings, membership models, subscription programs and more. They uniquely connect brand promise and customer experience through orchestrated activation, which influences consumer behavior. They are designed to help consumers gain more benefit from their relationship with the brand and, of course, to help the business perform better in competitive markets.
They are so prevalent today because of their impact. According to the 2024 Global Customer Loyalty Report, 9 out of 10 observe a positive ROI from their loyalty programs. With an average return of 4.8x, loyalty is high on the board room’s list of priority value opportunities.
As a further proof point, 8 out of 10 say that having a loyalty program in place has helped them to overcome the economic downturn. In a world where growth and resilience are required in equal measure, every organization must ask how best to leverage loyalty programs.
Bridging the ‘Potential Gap’
What’s interesting is that companies aren’t as satisfied with their loyalty programs as headlines would suggest. Many can see room for improvement. It’s not just customers who are demanding, companies themselves are proving to be some of their fiercest critics.
In today’s fast-paced business landscape, it’s common to compare against what others are doing, and this form of benchmarking tends to have significant influence on internal perceptions. Outside-in, what others are doing can often look more innovative and more sophisticated. That would explain why those who recently revamped — and brought their loyalty program more in line with others in the market — are more satisfied: 64.2% of respondents who revamped their loyalty program within the last two years are satisfied, compared with 43% of those who have not revamped.
It makes sense, therefore, that plans to revamp are increasing. A staggering 90% of respondents say their company intends to revamp their loyalty program in the next three years. That’s up 10 percentage points from last year’s high.
Technology Is Key
What’s more surprising, is that nearly 7 out of 10 respondents say their company wants to revamp and replatform their technology.
Revamping alone is a significant undertaking. You need to invest in research, strategy, the business case, organizational change management, customer communications and more. So, to manage a replatforming on top of all that would seem daunting. Doing so adds further demands like new systems integrations, data migration, potential re-consents, cutover and more.
However, we believe these companies have identified the key to realizing the potential of loyalty programs: Be bold and do both.
Replatforming enables the best possible revamp. Not just in terms of features available for the customer proposition, but also in terms of how the business can run it. Replatforming makes future changes quicker and easier to manage, plus no further IT involvement is required to configure new concepts. These factors also weigh heavily on a business’s satisfaction of its loyalty program.
Doing it Right
From the conversations we have with leading brands embarking on the revamp journey and looking at replatforming, we know many want to ensure it is the last major upheaval they must undertake. This makes the coming wave of revamps especially critical. But, can they really be the last?
Well, if a business moves to next-generation SaaS platforms, this could certainly be true — especially if moving from legacy in-house or overly customized solutions. Of course, the real benefit is the continual development of these loyalty cloud solutions. Platform leaders all have exciting innovation roadmaps. As the products develop, they should continue to deliver on the future needs of the businesses with new features to incorporate into their loyalty programs.
It’s also time to shift mindset: From a series of multi-year revamps to a continual evolution. The best companies launch and adapt a set of features within their loyalty program — following a test, learn and scale approach. That means the loyalty program is continually and incrementally optimizing, as opposed to a stepped approach every few years.
Discover more about the loyalty forecast for the year ahead by reading the 2024 Global Customer Loyalty Report produced by Antavo Enterprise Loyalty Cloud, with EPAM as a strategic contributing partner.
For more information on how EPAM can help you identify and close your gap to potential — through our integrated business, experience and technology consulting — please contact us.
