Twice as many organizations plan to increase their spend on customer retention over the next 12 months compared with customer acquisition. As a result, marketers are urged to shift focus as brands recognize the importance of engaging customers in the face of ongoing challenging economic conditions.
The research was carried out by loyalty technology provider Antavo as part of the Global Customer Loyalty Report 2024, which surveyed over 600 business respondents with a connection to their company’s loyalty approach, analyzed more than 30.5 million customer interactions performed on its platform during 2023, and conducted qualitative interviews with 50 experts. The report was written with additional insight from VML (formerly Wunderman Thomspon), EPAM and Frog / Capgemini.
The report also indicates that:
- 8 in 10 (81%) of organizations with a loyalty program felt they have proved helpful throughout the financial crisis
- 9 out of 10 reported a positive ROI, averaging over 40%
- The average annual spend of members who redeem personalized rewards is 4.3 times higher than those who redeem non-personalized rewards
- Only around half of the rewards offered in a loyalty program are redeemed.
Zsuzsa Kecsmar, co-founder and Chief Strategy Officer at Antavo, said: “Sometimes marketers make the mistake of assuming that once a new customer has converted, their job is over. However, as businesses across all sectors continue to fight for market share, marketing and loyalty experts are increasingly recognizing the importance of continued engagement and impressing existing customers.
“Retention plays a major part in overall growth and, in a cost-of-living crisis, the battle for customers is fierce. As we enter 2024, brands are fighting hard to keep their market share and finding new ways to increase customer lifetime value is a priority.”
According to the survey, micro-targeting and diverse reward options are the most noteworthy loyalty trends, while premium programs are a rising trend that causes a lot of discussion. A quarter (26%) of businesses said that they planned to introduce a premium element to their loyalty program in the next two years.
The report also examines what businesses need in loyalty technology, with the ease of technology integration seen as the most important factor for them.
James Baker, Head of Strategy at VML, said: “This compelling research from Antavo shows that companies increasingly recognize the value of investing in retention over acquisition, as loyal customers are more likely to make repeat purchases and refer others to your business. This report reframes the need for loyalty propositions to become the single connected ecosystem for the users of loyalty programs.”
Zsuzsa continued: “Being relevant for customers is critical. We know that consumers expect brands to deliver interactions that resonate with them and are getting increasingly frustrated when this doesn’t happen. There’s no one-size-fits-all approach to customer engagement, and if retention is the objective, then ensuring that offers are personalized and informed by data is key.”
Antavo is a Loyalty Cloud, providing best-in-class technology to manage experience-based, paid, and lifestyle loyalty programs online, in-store, or on mobile.
Antavo’s no-code, API-centric platform makes the loyalty program experience fully customizable and empowers loyalty and marketing teams to run their program internally, without IT help. The company invests 60% of its revenue into its product and issues quarterly product releases.
Antavo is a pure-play loyalty technology vendor recognized by Forrester, Gartner, Loyalty360, and is the preferred choice for loyalty consultants, agencies, and system integrators all over the world. Antavo empowers clients like KFC, La Cage, Kathmandu, Luisaviaroma and BrewDog, as well as global businesses in the travel, pharma and fashion industries. For more information, visit antavo.com.
Eva Bacsi, Marketing Director