Our understanding of customer relations has undergone a remarkable transformation in recent years. In the face of the enduring impact caused by the Covid-19 pandemic and the imminent threat of an economic downturn, we are now reassessing the concept of brand loyalty and exploring new avenues to achieve it. To assess the industry condition, we can rely on reports like The Forrester Wave: Loyalty Technology Solutions, Q1 2023 – an overview of the most significant loyalty software vendors on the market. While the primary aim of the Forrester study was to assist buyers in making informed decisions about technology purchases, it also offers valuable perspectives on the current loyalty landscape. Are you ready to explore further?
Economic stability significantly impacts how customers behave – and the past years haven’t made it easy on them. Due to the pandemic and soaring inflation, people are becoming more and more careful with their spending habits. According to Forrester’s July 2022 Consumer Energy Index And Retail Pulse Survey, the majority of online adults in the U.S. (64%), the U.K. (59%) and France (55%) are anxious about the possibility of a recession, and are on the lookout for new ways to save money.
Hence, the increasing importance of discounts. Always efficient in attracting new customers, right now, promotions are even more crucial for drawing a new crowd – but they need to be thought-out and smartly distributed.
What does it mean?
First, companies should focus on giving discounts to clients who actually “deserve it” – e.g., those who stay loyal to their brands and engage in long-term business with them, as they are the ones to invest in. Furthermore, discounts need to be offered adequately to each customer’s profile. By using AI for data analysis at the single customer level and recommendation engines to build individual discount promotions based on their needs, price sensitivity, and value to the company, you can cut out so-called “cherry pickers” and invest in loyal customers. At the same time, allocating the promotional budget effectively to customers with the most significant ROI can aid you in protecting the brand’s margins and profits.
Financial upheaval is one of many challenges the marketing world has to face. With a cookieless future getting closer and closer (Google plans to stop using third-party cookies in Chrome by the end of 2024), marketers are now trying to figure out the most efficient way to gather customer data. Considering how much digital marketing relies on information obtained from cookie tracking to identify customers and hit them with personalized offers, this new-found reality may pose a severe threat to advertisers.
How to deal with it?
Again, the answer lies in customer loyalty. Building strong client relations inspires the trust necessary for people to share information about themselves. And since as much as 92% of clients claim they will trade their personal data for loyalty points, creating engaging loyalty programs is the key to obtaining the most reliable zero-party data, which can later be used to optimize marketing activities.
Furthermore, marketers can now depend on cutting-edge AI tools that efficiently analyze the customer information they have acquired. These advanced solutions streamline data management and offer predictive capabilities, propelling marketing efforts to new heights. By harnessing these tools, businesses can tap into the wealth of accumulated knowledge and access nearly limitless resources. The era of disregarded data is behind us, as we now possess the means to analyze information and generate personalized content simultaneously effectively.
But none of that can’t happen without trust and loyalty imperative for gathering this info in the first place.
The metaverse reality may be the biggest yet among all the challenges and trends surrounding customer loyalty. A vague-sounding concept that took the world by storm in 2021 when Mark Zuckerberg decided to rebrand Facebook to Meta is now on its way to revolutionize all web-based activities as we know them.
But what does metaverse actually mean? Well, that depends on whom you ask.
The metaverse definitions vary from video game settings to virtual workplaces – however, all of them regard online environments providing digital experiences as an alternative to reality accessed via VR, AR, PCs, game consoles or even smartphones.
The potential of this virtual reality parallel to what we see in the actual world is really vast – it’s no surprise that key players have already jumped at the chance to tap it. From Zuckerberg’s Meta, through Microsoft and Apple, to Fortnite and Roblox, there are many iterations of a metaverse in work. Differing by purpose, functionality scope, tech required, and values, those platforms are fighting for supremacy in the market. But to achieve it, they have to attract users for the long haul.
And that can’t happen without loyalty.
Loyalty is crucial to building trust and creating value that will make members share all necessary metaverse data, the significance of which cannot be overestimated. The information obtained directly from clients is thought to become the primary currency of mainstream metaverse commerce. Why? Because zero-party data will be essential to design a space tailored to users’ wants, needs, interests, and preferences, ultimately determining its success or failure.
But the relationship between loyalty and metaverse is a two-way street. As much as loyalty benefits the metaverse, a metaverse can also aid loyalty. With the rise of digital ownership, blockchain and NFTs, loyalty programs are already drawing from the potential of the metaverse. For example, brands like Balenciaga and Adidas have been investing in digital products that are becoming increasingly popular among the youngest generation of consumers. The Obsessar study – “The Metaverse Mindset: Consumer Shopping Insights” – showed that nearly 75% of Gen-Z shoppers had purchased a digital item within a videogame. As much as 60% think brands should sell their products on metaverse platforms.
The research found that most participants perceived the virtual shopping experience as highly engaging, personalized, and immersive – all factors contributing to a boost in customer loyalty. And since the value of the metaverse in ecommerce is growing, marketers need to adapt their strategies to explore the options this new reality presents. Otherwise, they may miss out on countless opportunities to create a mesmerizing experience that takes customer engagement to a new level.
Customer loyalty can grow in various directions, which may be difficult to predict. We can safely assume that AI and the metaverse will play a crucial role in shaping the future of marketing. Still, given the accelerating development in these areas, it’s hard to be sure about their full impact.
There’s still much uncertainty surrounding the subject – the only clear thing is that brands must stay open to new solutions and be willing to incorporate them into ensuing promotional activities. The Forrester Wave: Loyalty Technology Solutions, Q1 2023reportshows who has the best chance to stay on top of those dynamic changes. Recognized as one of the top 5 most significant loyalty vendors on the market, Comarch is proud to be among companies that aptly find their ways in the new reality and provide tools suitable for modern loyalty challenges.