2018 saw a lot of disruption and experimentation within the loyalty industry, but unfortunately there was also a lot of customer disillusionment with existing loyalty programs.

The question is no longer whether your business has a loyalty program—it’s whether your loyalty program is realising its potential to meet your business goals whilst also providing meaningful, tangible perceived value to customers.

This forms the basis for my loyalty trend predictions for 2019. So, what will we be seeing more of?

1. Convergence of loyalty & subscription models

Everyone these days wants a reoccurring revenue model, including loyalty program operators. Last year we saw a sprinkling of subscription models emerge including the launch of Shipster by Australia Post and the trial of Flybuys Max by Westfarmers, and throughout 2019 we expect to see many more companies chasing down the dream created by the incredible success of Amazon Prime.

Companies looking at this type of design for their loyalty program need to be very careful with their commercial modelling. One company, MoviePass promised to disrupt the cinema industry with its all-you-can-watch moviegoing subscription for just $10 per month (about $1 more than the average movie ticket) and actually ended up destroying itself due to its unsustainable financials.

 

2. Experiences are everything

Money-can’t-buy experiences provide members with a sense of exclusivity, belonging and an emotional connection to a brand. Those who can successfully drive these positive emotions among their customer base are more likely to earn lasting loyalty throughout 2019 and beyond.

My favourite loyalty program from Mecca Cosmetics have capitalised on the ‘experiences are everything’ mentality to build strong relationships with customers by incorporating free makeup applications and access to VIP events as a benefit of being in the top tiers of their Beauty Loop program. When I get my makeup applied for a special night out by a Mecca makeup professional at no cost, I spend the night feeling confident and connected to the brand (and am more likely to buy the products that have been applied).

3. Paid schemes are on a comeback

Not only do paid loyalty schemes give businesses the potential to deliver more value, as well as instant gratification to customers, it also provides them with more scope to differentiate. Your best customers want the best experience and they’re willing to pay for it!

Brands are also recognising that paid schemes are a great way to make your most valuable customers even more valuable in terms of increased basket size, order frequency and engagement because they want to get the most out of their investment in the program. Customers are also less likely to switch brands if they’ve already paid for your loyalty program.

Before brands rush in, however, the need to consider the additional strategic and operational needs this type of program requires. ‘Only Amazon can have the depth, frequency of transaction and resources to dominate this way,’ David Slavick, President of DAS Loyalty Consulting, recently posted on LinkedIn. ‘Paid programs have significant demand on the organization, it is a multiplier on people and processes that many enterprises must plan for carefully. Content is king. The value proposition must feel like double in benefit to what is paid through subscription fees. Renewal rates in Year 2 are always a challenge. Never lose sight of complimentary membership for Top 1-5%.’

For examples of the best paid loyalty programs on the market today which include Lululemon, Amazon Prime, NRMA Blue and more, read the article here.

4. Real time rewards are non-negotiable

Real-time is now an expectation from customers and those who can’t deliver fast will be left behind. Large loyalty programs often struggle with innovation, slow and expensive processes, program interoperability, earn delays and liability management and this needs to be looked at seriously.

Deloitte explains that a blockchain-based loyalty rewards program can absolutely help here to enhance customer experience by reducing costs, enabling frictionless systems, making the process near real-time, providing a secure environment, and more.

A number of companies are spearheading efforts in the blockchain loyalty technology area including Loyyal, qiibee and Loyela.

5. Authenticity is key

Go the extra mile and build authentic relationships with your customers. People are sick to death, and also more savvy to and sceptical of influencers. Brands have to get real, build real relationships with customers whom they can turn into authentic, positive brand advocates.

Ultimately 2019 will see brands that stand for nothing, brands who don’t differentiate, brands who don’t develop and brands who play it safe, out of business.

We welcome these top trends of 2019 and know this will be an exciting year for loyalty.

Stacey Lyons is the Marketing Director at Loyalty & Reward Co, a leading loyalty management consulting agency based in Sydney. Stacey has years of experience within loyalty, marketing and eCommerce across multiple channels and business models. Most recently, Stacey has been managing the investor, member and retailer communications for blockchain loyalty company EZToken Rewards.

Stacey is a proud pioneer of women in blockchain and regularly contributes to www.blockchainloyalty.io global resource centre for everything blockchain loyalty.

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