Leaders in Customer Loyalty, Powered by Loyalty360
Leaders in Customer Loyalty, Powered by Loyalty360
What We're Seeing and Hearing: September 13, 2024
What we are seeing and hearing for the week ending September 13th, 2024. Today we are going to discuss the top 8 challenges related to customer loyalty.
Loyalty360 has the privilege of being in a unique space in the customer loyalty industry, we hear from the leading brands and technology companies as to the “state” of the industry. We do brand focused research throughout the year based on areas of interest from the brand community.
Loyalty360 also has an advisory board who helps shape the topics, trends and area of focus for the association. It is a very diverse group of senior level experts in the customer loyalty space.
During the 2024 Loyalty Expo, the group met and during a breakfast meeting we went around the table to discuss the challenges and opportunities they are seeing, which led us to this top 8 challenges of customer loyalty.
• Shorter Attention Spans
• Engaging Younger Generations
• Keeping up with Martech
• Increased Pressure on Cost
• Data & Privacy
• Partnerships
• Bringing Focus to Loyalty
• Framing Customer Loyalty - Cost vs. Investment
2024 State of Customer Loyalty Paper
Loyalty Expo Partnership Session
Amy Barnett’s – Lunch and Learn
Next Generation customer Loyalty Paper
Per Jenson’s July Lunch and Learn session on socialization of customer loyalty program
About the series:
Loyalty360’s videocast is “What We're Seeing and Hearing,” a weekly summary of trends, insights, and best practices that our team is hearing directly from leading brands — both member and non-members — as well as from supplier partners.
Many details in “What We Are Hearing” will be high-level and often anonymous to provide an open dialogue for those telling Loyalty360 their story. As a trusted advisor to the customer experience and the customer loyalty market, we see a significant amount of impactful and challenging scenarios in the market. This is Loyalty360’s way of bringing this inside information to the market in a timely and concise manner that others can learn from
Good afternoon, good morning, mark Johnson from Loyalty360. Hope everyone's happy, safe and well. Welcome back to what we're Seeing, what we're Hearing. This is for the week of September 13th 2024. Today we're going to talk about the top eight challenges related to customer loyalty.
Speaker 1:Loyalty360 has a privilege in being a very unique space in the customer loyalty industry. We hear from brands who are members and also technology companies who are members, about what they are seeing in the state of customer loyalty. We do brand-focused research throughout the year based on areas of interest from our brand community. We also have an advisory board of very senior-level individuals within the customer loyalty arena who help advise us on the different topics that we should be focused on throughout the year. During the 2024 Loyalty Expo, this group met and during a breakfast we went around the table tables, should I say to discuss the challenges and opportunities that they are seeing within the industry, which led us to the top eight challenges of customer loyalty, this grouping of challenges and opportunities we actually discuss with brands going forward as part of their membership agreements. Most of the discussions we have close. All of them are very much aligned, as these are the top eight challenges that you're seeing. The top eight challenges are shorter attention spans, engaging younger generations, being able to keep up with MarTech and increased pressure on cost, data and privacy partnerships, bringing focus to customer loyalty, which we'll talk about in a minute, and being able to frame customer loyalty cost versus investment. When you look at the topics that comprise the top eight, the first one is this idea of shorter attention spans. Customers have shorter attention spans now it's believed, and marketers are looking for a way to adapt to that. So being able to serve the right message at the right time, shorter educational videos on TikTok and on YouTube on both the program as well as educating individuals within the organization are very important, and brands are also looking at AI produced content and videos that can be personalized based on level, understanding and the topic as well.
Speaker 1:The next area of interest in the top eight is this idea of engaging younger generations. Brands realize that for the next generation customer loyalty, you're going to have to make sure the program, the product, the service offering is applicable and relevant to the younger generations. Younger generations Gen Z, millennials are looking for lifestyle type products. They're looking for brands that have kind of a social commitment. But marketing to the younger generation is a bit of a challenge and brands are struggling with making sure they have the right cadence, the right product, but also there is an incremental cost associated with this as well, and being able to get enterprise level buy-in from organizations to focus on marketing to and engaging younger generations is a challenge that we see in our community and it was discussed during the advisory board meeting.
Speaker 1:The next challenge brands have is keeping up with MarTech. Earlier this year, loyalty360 pulled together a study and found that there are 26 component pieces regarding customer loyalty. There's a survey below if you wanna take a look. But challenges with integration is a significant challenge for brands. Not only do brands have challenges understanding what the technology does, what it's supposed to do, and invariably we hear from brands that when they bring a product in CDP marketing orchestration platform, it may not have all the functionality that they wanted and invariably, integration can be a significant challenge. It was promised for one month, two months, but it ends up going significantly longer. One thing that's unique about Loyalty360 is we have 100 plus members that are part of Loyalty360 and we understand the different technologies they use because we discuss it with them in open forums. We know what they like, what they don't like, and that will help shape and craft our 2024 State of Customer Loyalty paper on these different technology providers, which will be out this fall.
Speaker 1:The next topic, topic number four, is this idea of an increased pressure on cost. Brands are being asked to do more with less Right now, in this challenging economic environment, customers are in search of value and brands want to find ways to decrease cost. They also want to find ways to increase customer member satisfaction and ensure that the customers understand and appreciate the value of the program. Many brands are looking at their customer value proposition. We saw in the State of Customer Loyalty paper as well that brands are looking for ways to create different behaviors. They're looking for new reward opportunities and they're also looking for new personalization opportunities. A link to the 2024 State of Customer Loyalty paper is below. Also, it's starting to frame another challenge, which will be the last one we talk about. Is this how the cost of a customer loyalty endeavor are being framed. Is it an investment or is it a cost? We'll talk about that in a minute.
Speaker 1:The next one data and privacy very significant issue. We have a discussion coming up, going to be led by Cracker Barrel, which you can see in the notes as well, where they're going to talk about privacy and data, how they're looking at internally. We did a research paper last year on data and privacy that you can download below as well, but this is an update, so we're going to get an update on how they are looking at it, how other brands are looking at it. There's definitely an increased interest in personalization. Customer expectations for personalization from a brand are at an all-time high. But keeping up with changing state regulations, communications and being able to make sure the technology is able to do that is a big challenge. We haven't seen a big opt-out or a push to be forgotten in a number of the privacy discussions that we have with brands, but there is a push right now for digital discrimination. We see that in New Jersey there is a lawsuit. A couple of lawsuits are looking at how brands may discriminate if you don't have a digitally native customer.
Speaker 1:The next challenge is partnerships. Partnerships are another area of interest for Loyalty360. It was definitely discussed in the advisory board meeting at the for Loyalty360. It was definitely discussed in the advisory board meeting at the 2024 Loyalty Expo. Brands no longer want mass affiliate-based partnerships. They want partnerships that work for both of the brands, for customers of both of the brands. They want to make sure they have a line of brand values. They're still challenged with tech integrations and being able to get that tech integration into the queue, and also knowing your customer. At the 2024 Loyalty Expo we had a wonderful session with Campgrounds of America, bank of America and Accor and they talked about the challenges they are seeing with regard to partnerships. There's a link to that session below, but at a high level. Knowing your customer is a big piece of that. Where partnership agreements may have been three, four pages in the past, now they are completely different. Legal engagement there's a financial component, as John Sellers from Bank of America talked about, and they're also Sabrina Lou talked about in being able to know your customer, understanding your customer. So check out that link below. A great session here.
Speaker 1:The pet ultimate topic is this idea of bringing focus to customer loyalty. When it comes to bringing focus to customer loyalty, many brands got away from talking about their program internally. There's a need right now we're seeing to socialize the program internally. Per Jensen from Stop and Shop led a digital round table A couple months back. He talked about how, when he came into Stop and Shop, he wanted to get a level, set of where the customer loyalty program was, what the understanding was, and address any incongruities that may have existed. Now he has a very proactive process where he goes out and speaks with the stakeholders internally to make sure they're continually educated and understand where the program's going vision and how it's performing. So this idea of bringing focus to customer loyalty is something we're seeing a pretty significant rise in interest around. Brands want to know how they should be talking about it internally, how they should be educating their internal and external stakeholders.
Speaker 1:And the last topic that we have from our advisory board meeting in 2024 is this idea of framing customer loyalty, this idea of investment versus cost. Many brands have started to talk about their customer loyalty program as more of a cost right, a cost center, something that should be marginalized or reduced, versus an investment in the program and the customer. What we have and what we see is many brands want to figure out how they can flip that cost. Much of this is due to the challenging economic times we have, and what we see is many brands want to figure out how they can flip that cost. Much of this is due to the challenging economic times we have right now, where some brands are doing exceedingly well and some may not. So this increased pressure on cost has kind of brought this to bear. But there is an interesting discussion within the community of how we can focus on cost. We can maximize the investment in the customer. We can take and make investments that may or may not work, fail, fail fast and move forward.
Speaker 1:We have a session coming up with John Giquinto from Rite Aid. He's going to talk about how he is helping to frame that discussion internally in a very unique organization coming out of bankruptcy but prime for success. The link for that is in the notes as well. Well, so thank you for taking the time to join us today for what we're seeing, what we're hearing, for the week of september 13th 2024. I would love to have your feedback in the comments below if these are eight topics that resonate with you and your brand. If you have any questions or if you'd like to suggest a topic, please feel free to do so in the notes below. Thank you very much again for taking the time to join us this week. Looking forward to seeing you next week as well. Have a wonderful day.