Building Brand Loyalty With Programs and Customer Personalization

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Building Brand Loyalty With Programs and Customer Personalization

As the new year approaches, website traffic declines, so customer acquisition is a top priority for brands. One way to optimize your acquisition spending is to invest in loyalty programs and strategies. Yet, some brands often notice that customers don’t return for a second purchase after signing up for a loyalty program. Additionally, when it comes to brand loyalty in general, consumers will switch brands willingly due to factors such as product pricing and availability.

So, how can you augment and expand loyalties to retain new and existing customers in the coming year?

The Most Common Reasons Customers Abandon Loyalty Programs

Customers who utilize loyalty points and redeem earned rewards are more than twice as valuable as those who disregard them. But, according to Brad Macdonald, Vice President of Loyalty Strategy at Epsilon, an average of “28% of consumers are abandoning loyalty programs without ever redeeming any points.” Sometimes, that churn rate can be as high as 50%.

So, why are customers declining these seemingly favorable opportunities?

The reason is delayed gratification, which diminishes the value of a program. With standard loyalty programs, it takes an average of six months — sometimes as long as 16 months — for customers to earn an incentive. For this reason, providing consumers with instant and goal-oriented rewards is imperative to increase purchase rates.

Optimizing Loyalty Programs With Customer Engagement Strategies

With the accumulation of unredeemed points and rewards, brands must develop strategies to maximize program engagement. “70% [of customers] are more likely to recommend a brand if they have a good loyalty program,” states Michael Klein, Global Director of Industry Strategy and Marketing at Adobe.

When creating effective programs, it’s ideal to combine easily attainable rewards with long-term aspirational ones. This requires clearly communicating how the customer can benefit from each reward to enhance its value proposition and relevance.

Case in point, Kohl’s and Old Navy offer cash rewards that require customers to make a second purchase to redeem the reward. This gives consumers a goal to work toward while building loyalty and brand profitability.

Loyalty Program Alternatives: Customer Personalization

While loyalty programs aim to increase ROI for your business, some companies feel these programs are too large of an investment and cannot obtain value from them.

So, what other actions can you take to expand customer retention efforts?

Customer personalization is a viable alternative for generating brand loyalty. This strategy creates meaningful moments customized for specific consumer purchasing habits and preferences. It’s best to communicate with customers during each touchpoint in their journey by following up with a personalized email campaign after every purchase or action.

“The whole purpose of loyalty,” says Ashley Lockridge, Vice President of Strategic Consulting at Epsilon, “is not necessarily to live over here in a silo…which, for many organizations, they have a loyalty program, and they kind of live in their own little world. The beauty of [customer personalization] is that you can combine the two so that with every touchpoint, you have the ability to speak to that person on a one-to-one level.”

No matter the loyalty efforts you leverage, it’s crucial to diversify, personalize, and optimize each strategy.


What is BWG Connect?

BWG Connect provides executive strategy & networking sessions that help brands from any industry with their overall business planning and execution. BWG has built an exclusive network of 125,000+ senior professionals and hosts over 2,000 virtual and in-person networking events on an annual basis.

Guest's Company Profile


Adobe Experience Cloud is the most comprehensive suite of customer experience management tools on the market. With solutions for data, content delivery, commerce, personalization, and more, this marketing stack is created with the world’s first platform designed specifically to create engaging customer experiences. Each product has built-in artificial intelligence and works seamlessly with other Adobe products. And they integrate with your existing technology and future innovations, so you can consistently deliver the right experience every time.

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Epsilon is a global advertising and marketing technology company positioned at the center of Publicis Groupe. They connect advertisers with consumers to drive performance while respecting and protecting consumer privacy and client data. Epsilon accelerates clients’ ability to harness the power of their first-party data in order to enhance, activate and measure campaigns with confidence. They believe in an open, privacy-first advertising ecosystem. Over decades, they’ve built the industry’s most comprehensive identity graph to give brands, agencies and publishers the ability to reach real consumers across all channels and the open web.

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