Consumer behavior has changed significantly over the years. In the past, consumers were more likely to be loyal to a particular brand or store. They would often shop at the same place for years, and be hesitant to try new things. Today’s consumers can be fickle, as they’re constantly bombarded with advertising and marketing messages. Always looking for the best deal, they’re more likely to switch brands or stores on a whim.
In addition, the modern consumer is more informed than ever before. We all have access to a wealth of information online, and it’s easier to compare prices and products. The result? Consumers are less likely to be swayed by advertising or marketing messages.
And they’re more demanding. Consumers today expect high-quality products and services, and they aren’t afraid to speak out if they aren’t satisfied. Businesses need to constantly innovate and improve their products and services in order to keep up with demand.
The One Constant
Vijeta Aluru, who spearheads the multi-million dollar rewards program for a leading car company, says that one constant has remained the same throughout the dynamic landscape of consumer behavior.
“We love rewards!” she shares. “Who doesn’t love a good deal or a good kickback? There’s much more incentive to shop with a brand or remain loyal to a brand that shows you appreciation.”
In the early 20th century, customers collected stamps; now we collect digital loyalty points. Reward programs have continuously adapted to meet the evolving needs of the consumer. And as these programs advance, experts like Vijeta have unique insights into their future trajectory.
The Origins of Reward Programs
Historically, rewards were straightforward – frequent purchases led to discounts or gifts. The primary aim was to ensure repeat business. Simple stamp cards or punch cards were the norm, offering a free product or service after a certain number of purchases.
Digital Changes Bring Personalization
Fast forward to the turn of the century, and the digital age brought a sea of change. Loyalty programs transitioned to online platforms, offering not just transaction-based rewards, but experiences. This shift was instrumental. With the power of data analytics, companies could now personalize rewards, tailoring them to individual customer preferences.
“As I said, we all love rewards,” Vijeta says. “But beyond rewarding a purchase, businesses can take the opportunity to truly understand the customer’s journey, anticipate their needs, and deliver value at every touchpoint.” She highlights the importance of data-driven insights to ensure that reward programs resonate with the target audience.
Integration with Technology
With the proliferation of smartphones and wearable tech, reward programs have become more integrated into daily lives. Collecting points is certainly still a key factor in many reward programs, but these programs have also evolved into holistic ecosystems. For instance, in the automotive sector, app-based rewards can be linked to vehicle maintenance, accessory purchases, or even test drives, making the customer’s interaction with the brand seamless and consistent.
Drawing from her extensive experience, Vijeta notes, “The convergence of technology, especially mobile platforms, with reward programs has opened doors to innovative customer engagement strategies. The idea is to go beyond just offering discounts. We’re trying to enhance the overall user experience, so that every interaction can be truly memorable.”
The Shift Towards Experiential Rewards
The modern consumer, especially the millennial and Gen Z demographic, values experiences over material possessions. Recognizing this shift, forward-thinking companies have begun offering experiential rewards. Instead of just discounts or cashback, customers might receive exclusive event tickets, travel opportunities, or unique brand experiences.
“Experiential rewards create lasting memories,” Vijeta elaborates. “They foster a deeper emotional connection between the brand and the customer. It’s this bond that drives true loyalty, ensuring customers become brand advocates.”
Challenges and Changes
While the evolution of reward programs has largely been positive, it’s not without challenges. Data privacy concerns, the balance between personalization and intrusion, and ensuring consistent value delivery across global markets are areas that brands grapple with.
Vijeta is optimistic but cautious about the future. “As we leverage technology to offer tailored rewards, we really need to prioritize the customer’s trust,” she stresses. “Transparency is crucial, from how we use data to making sure that the customer sees tangible benefits from their loyalty.”
She also emphasizes the importance of adaptability, as the reward program landscape is ever-changing. “Brands need to stay agile,” she says. “They need to continuously iterate and refine their programs based on customer feedback and technological advancements.”
From simple stamp cards to sophisticated digital ecosystems, the trajectory of reward and loyalty programs is a testament to their enduring appeal. As they continue to evolve, the focus remains on delivering value and building lasting relationships.
Learn more: https://www.linkedin.com/in/vijeta-a-67002516a/