Loyalty programs built around “earn points, get rewards” have been the norm for years. However, while this approach has benefits, it creates two significant issues: customers form rational, not emotional, connections with brands, and these programs often lack true engagement. In today’s market, it takes more than points and discounts to inspire loyalty. This places an even greater emphasis on customer experience (CX) when loyalty is offered to valued customers. While traditional points-based loyalty programs still have their place, they are no longer enough to keep customers coming back. Today, savvy brands are realizing that creating engaging and memorable experiences are key to winning customer loyalty and driving growth.
Shifting from Transactional Loyalty to Meaningful Experiences
Historically, loyalty programs focused on rewarding transactions: spend more, earn more points and get a discount. But customers’ expectations have evolved. Today, they want more than just rewards. They seek personalized, engaging experiences that resonate emotionally.
Modern customers expect brands to understand their needs and preferences and deliver more than transactions. Customers want to feel valued and understood and are drawn to brands that create memorable experiences. This shift pushes brands to rethink their loyalty strategies towards deeper, more meaningful engagement.
Moving beyond traditional rewards, experiential loyalty offers unique, personalized experiences that emotionally connect with customers. These experiences can range from exclusive access to events and behind-the-scenes content to tailored product recommendations and communications. By building these meaningful connections with customers, brands foster deeper loyalty and long-lasting relationships.
How Brands Are Enhancing CX
Brands are increasingly investing in strategies that prioritize CX to achieve highly satisfying engagement. Here’s how they’re doing it:
1. Personalization: Personalization is key to creating a memorable customer experience. By leveraging data and analytics, brands gain insights into customer preferences and behaviors. This enables personalized experiences that perpetually resonate. From customized product recommendations to personalized emails and offers, brands are leveraging better data insights to deliver experiences unique to each customer. Starbucks sends personalized mobile app push notifications to their customers; offering discounts or bonus offers on drinks or food items informed by past purchase history or history of similar customers. Starbucks commits to personalization to increase spend and visit frequency. Starbucks
2. Exclusive Access and VIP Experiences: Offering exclusive access to events, products, or services can create a sense of exclusivity and make customers feel special. These exclusive offerings not only drive customer loyalty but also create buzz and excitement around the brand. Foot Locker’s FLX Rewards has taken their sneaker launches and gated it behind their FLX Rewards program. This allows FLX Members to have first access to these ‘high heat’ sneaker releases plus early access to sales and member-only events. FLX Rewards
3. Immersive Brand Experiences: Brands are creating immersive experiences that engage customers on a deeper level. This can include anything from interactive in-store experiences to virtual reality (VR) and augmented reality (AR) campaigns that allow customers to interact with products in new and exciting ways. These immersive experiences create memorable moments that customers are likely to share and talk about. During the Paris Olympics, Foot Locker EU created an AR campaign around the city that their FLX Rewards Members earn points for participation. Foot Locker 2024 Olympic Games
4. Emotional Engagement: Brands that tap into customers’ emotions, values and beliefs are more likely to create lasting relationships. This is achieved through storytelling, purpose-driven marketing and alignment with causes and initiatives that resonate with customers. When customers feel emotionally connected to a brand, they are more likely to remain loyal and even become advocates or influencers. Rothy’s takes plastic from the ocean and recycles it into cute, stylish, comfortable shoes for women, men and kids. Rothy’s Sustainability
5. Seamless Omnichannel Experiences: In today’s digital age, customers, especially loyalty program members expect seamless experiences across all channels—online, in-store and mobile. Brands that can provide a consistent, seamless experience across all touchpoints are more likely to build customer loyalty. This includes everything from easy navigation on a website to personalized in-store experiences and responsive customer service. Dick’s Sporting Goods makes shopping their channels easy and provides a great CX their Scorecard members. Website pages plus Mobile app provide an easy way to track points, use rewards and get special offers right from the Member dashboard. DSG Scorecard Rewards
Key Benefits of Focusing on Customer Experience
Investing in customer experience can have significant benefits for brands. Creating engaging and memorable experiences is a smart strategy that can improve brand perception and increase targeted KPIs:
1. Increased Customer Loyalty: Customers who have positive, memorable experiences with a brand are more likely to remain loyal and are more likely to recommend the brand to others, driving word-of-mouth marketing and new customer acquisition.
2. Higher Customer Lifetime Value: Customers that are engaged and satisfied are likely to spend more over their lifetime. By creating experiences that drive loyalty and engagement, brands can increase customer lifetime value and drive long-term growth.
3. Competitive Advantage: Providing exceptional customer experiences can set a brand apart from the competition. The more brands can differentiate themselves from competitors and build a competitive edge, the more likely customers will stay loyal.
4. Positive Brand Perception: Brands that prioritize customer experience are more likely to be seen as customer-centric and trustworthy. This positive perception can enhance brand reputation and drive customer trust and loyalty.
Summary of How CX Is Changing
As the customer experience continues to evolve, brands must go beyond traditional points and rewards to create engaging and memorable experiences that resonate with customers. By focusing on personalization, exclusive access, emotional engagement and seamless omnichannel experiences, brands can build deeper connections with customers, drive loyalty and gain a competitive edge.
In the end, the brands that succeed will be those that understand the importance of creating meaningful experiences that go beyond transactions. In today’s experience-driven world, it’s not just about earning points—it’s about earning trust, loyalty and a place in customers’ hearts.
Author David Slavick, Ascendant Loyalty Marketing
