89% of businesses are planning to invest in new customer loyalty technology and approaches to improve their customers’ experience in 2024, following a turbulent year for customer retention as brands battled to retain customers amidst a spending crunch.
Loyalty marketing technology will form a key part of plans to retain and grow customer spend, with 9 in 10 companies planning to revamp their existing loyalty programmes within the next three years. Almost half – 44% – said that they were not happy with their current loyalty programme.
Meanwhile, two-thirds (65%) of businesses are looking to replatform their loyalty technology as part of their investment plans.
The figures are revealed in loyalty cloud platform Antavo’s Global Customer Loyalty Report 2024, which surveyed over 600 senior business respondents with a connection to their company’s loyalty approach, analysed 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.
Among its key findings are:
- 81% of businesses said their loyalty programmes helped them navigate rising inflation and other economic concerns in 2023
- 60% of loyalty programme owners have made significant changes to their programmes in the last two years
- 90% of businesses with a loyalty programme report a positive return on investment – the average ROI is 4.8 greater than their investment.
Zsuzsa Kecsmar, co-founder and Chief Strategy Officer at Antavo, said: “There has been a marked shift towards customer retention in the past few years over winning new ones. As a result, an overwhelming majority of businesses are actively seeking to evolve from their legacy technology and replatform to one that will enable them to strengthen their relationships with their existing customers.
“It’s a myth that loyalty programs are a cost centre. Our report proves this: nine out of 10 companies have measured a positive ROI. Even better, the average ROI for them is 4.8 times their investment. Focusing on your most loyal customers is worth it, so it’s not surprising that twice as many companies want to invest in retention instead of acquisition.
“With around 81% saying that their loyalty programmes had helped them navigate the rise in inflation and economic concerns in 2023, it’s clear to see that investing in customer relations by way of refreshing loyalty technology is a highly strategic step for 2024,” she added.
James Baker, Head of Strategy at VML, said: “This compelling research from Antavo shows that companies are increasingly recognising 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.”
“A renewed focus on customer loyalty requires investment in technology,” added Zsuzsa. There is a huge amount of potential today for hyper-personalised loyalty programmes, considering that the number of members who redeem personalised rewards is 4.3 times greater than those who redeem non-personalised rewards. Almost seven in 10 (67%) said that microtargeting, which is the process of targeting small segments of customers with tailored messages, content and loyalty offers, delivers a greater financial benefit than it costs to perform.
“In light of the rapidly changing technology landscape over the last 12 months, it’s not altogether surprising to find that so many businesses are actively looking at how they can replatform and repurpose their loyalty initiatives,” she added. “The collective investment in new technology will represent a significant economic event in 2024.”