Here´s why!

Almost half of Gen Zers (43%) and 41% of Millennials are ditching brands they were once loyal to because they grew ‘bored’ of them. 23% of consumers would stop buying from a brand that ‘spammed’ them with too much marketing outreach. This is result from SAP Emarsys Customer Loyalty Index survey (CLI report).

The Customer Loyalty Index survey covers more than 12,000 consumers across the UK, USA, Germany, Australia and the UAE and has some interesting insights:

Almost 1 in 5 consumers (19%) say they show their loyalty to a brand by agreeing to share their personal data with them. However, a third (32%) also say they will stop buying from a brand they were previously loyal to if it fails to treat their data responsibly.

Build your own zero- and first-party data, being transparent about usage, providing opt-outs and offering a clear value exchange.

I believe an effective personalized loyalty program is fueled by accurate customer data but obtaining first-party and zero party data requires customers to have a level of trust and loyalty towards a particular brand. This is especially true given Google’s recent announcement on abolishing third-party cookies. The only solution here is to build your own zero- and first-party data, being transparent about usage, providing opt-outs and offering a clear value exchange.

Solve the scale challenge with AI

Marketers are increasingly turning to AI to foster long-term loyalty and reach new audiences. According to recent SAP Emarsys research, two-thirds (66%) of marketers agree that AI will be crucial for boosting customer engagement in 2024, and half (50%) have already experienced a rise in engagement after implementing AI-powered personalisation. AI enables brands to stay competitive by quickly adapting to changing customer expectations.

When you invest in an AI marketing solution have these three core principles in mind:

• Relevancy - Each of the AI features and tools should be embedded into marketing workflows. In other words — it’s about real solutions that bring power to the marketer.
• Reliability - Train your AI on the industry’s broadest business datasets and build on a scalable and secure foundation.
• Responsibility – Build your AI solution on the highest ethics and data privacy standards.

Maintain relevance

Ensuring that the data, driving any personalized loyalty program, is accurate and up to date is crucial. Today’s consumers have more power and higher expectations than ever before. If brands fail to meet expectations, customers can switch to a different brand in just a few clicks. Sending irrelevant offers or communications that don’t match customer expectations — in this case too many or those deemed unexciting — can hurt loyalty.

Insights like the ones I mentioned in the beginning of my blog post show that this underscore the importance of AI-powered segmentation, allowing brands to tailor experiences to customer segments in real time.

The shift from transactional to relationship-driven marketing

The nature of customer engagement and customer loyalty is changing and becoming increasingly nuanced. Rather than just repeat purchases and brand recognition, marketers are now looking to foster long-term and deep connections with customers that translate into engagement and lasting loyalty.

It means that truly understanding your customers and delivering a seamless integrated experience across all touchpoints whether that’s online, in-store, via mobile apps, social media, or email, is now a must have. The Emarsys report show that in 2022, consumer loyalty peaked, with 77% of global consumers expressing loyalty to specific brands. With economic challenges globally this dipped to 67% in 2023, before increasing slightly to sit at 69% in 2024.

To create, build, and maintain customer loyalty, brands need to meet their customers in the right place and in the right way. Loyalty is still there to be won, and crucially, recognition is as valued as rewards by loyal customers. 20% of consumers say they are loyal to a particular brand because they feel valued by them in their communication and engagement. 20% say loyalty would be positively impacted by creating memorable experiences with personalized services and unique customer offers. 39% of loyal customers have their favorite retailer's app on their phone (Due to Emarsys CLI report).

Real-time engagement and AI-driven segmentation for proactive loyalty management

Customers want to be addressed individually. Without AI-powered segmentation and GenAI, this would be an overwhelming task. AI-powered segmentation means marketers can speak to customers in real-time. It ensures that when marketers push a campaign live, they’re acting on the most up-to-date information, targeting customers based on what they’re currently thinking and how they’re acting in that moment, rather than insights from three months ago.

Again, from Emarsys global AI research:

• 29% say AI is having a positive impact on their retail experience as it helps to personalize their shopping experience.
• 37% say it’s positive as it helps them find products.
• 25% say it learns their preferences better than a human would.
• 31% say retailers should use AI to make their marketing more accurate and relevant.

I like to end with a quote about AI from Sara Richter, CMO of SAP Emarsys; “Many people worry AI will lead to more formulaic marketing and less human content. I believe the opposite. AI will revolutionize the marketing landscape, empowering marketers to focus on strategic and creative endeavors”.

Check out AI in Retail Report 2024 from Emarsys.

Good luck with your future loyalty endeavours.

Mats