laura mcgill
Laura McGill

The growth of member pricing and the rise in retail media are just two reasons why loyalty schemes have been front of mind recently for many marketers.

We caught up with Laura McGill, Head of Marketing at global promotions and loyalty firm Benamic, and self-professed “data-driven person” to ask what customers want from loyalty schemes.

Econsultancy: What do customers want from loyalty schemes today? And where do brands typically go wrong?

Laura McGill: Customers want easy, seamless experiences that are engaging. This is achieved by deeply understanding the audience and taking into consideration everything from how they interact with the program or offer, to aligning rewards and incentives with their values and aspirations.

Simplicity is also paramount in a successful loyalty scheme. This involves providing an experience that’s easy to participate in and ensuring that the core message and value of the program are abundantly clear. Customers shouldn’t have to unravel complicated rules or requirements.

Beyond this, customers are also seeking loyalty schemes that demonstrate they are more than a mere transaction, with experiences that express genuine appreciation and create a sense of community and belonging.

Brands often falter when they focus too much on the transactional or financial aspect. The aim of the loyalty program should be to go beyond transactions, creating those longer-term relationships by making customers feel genuinely valued and appreciated.

Simplicity is… paramount in a successful loyalty scheme. … Customers shouldn’t have to unravel complicated rules or requirements.

E: Can you give us any examples of particularly effective customer loyalty schemes?

LM: I think Starbucks have really nailed it. Their program is easy to understand and use, but the standout is really how smooth they’ve made everything. It’s a prime example of seamless customer experience.

Boots Advantage is another one. It’s super simple. Their value proposition is crystal clear and super easy to understand, which customers love.

Then there’s Pets at Home’s VIP program. They’ve got the usual exclusive deals, but what I love is the ‘Lifelines’ part. You actually get to choose a charity that benefits each time you shop. This not only adds that socially conscious dimension to the rewards, but it also personalises the whole experience. In my case, I got to select the charity where I adopted my dog, Bronson.

And this might seem like a small detail, but they even address their VIP post to ‘Mr. Bronson’! It’s this kind of attention to detail that makes a huge difference, turning a simple rewards program into something that feels a bit more special and personal to the individual. It’s these little things that can really solidify that connection between a customer and a brand.

E: What KPIs are important? How should brands be measuring success?

LM: Brands should be measuring the usual metrics such as customer retention rates, customer lifetime value, and conversion rates.

Additionally, they should track engagement and redemption rates. Redemptions indicate that customers are actively engaged and deriving value from the program, which can accelerate the loyalty loop, leading to higher spend and loyalty.

Collecting and analysing customer feedback is also important. This helps understand the customer sentiment and can provide valuable insights into what is working and what needs to be improved.

E: What trends or innovations do you predict will come to the forefront of your industry in the next 12 months?

LM: Obviously the marketing industry is going to see increased integration of AI technology, so we will absolutely see this in loyalty and promotional marketing to further personalise and improve customer experiences.

One major goal for Benamic is to invest in our machine learning and AI capabilities for customer experience in particular. By leveraging technology, we aim to provide more personalised, efficient, and intuitive customer interactions, ultimately improving the overall customer experience.

Then there is also the rise in sustainable and socially responsible rewards – reflecting consumer demand for brands to exhibit more environmentally and socially conscious behaviour.