In today’s digital age, where competition is a click away, loyalty has become a cornerstone of customer retention and satisfaction for both retailers and financial institutions looking to drive and capture lifetime value.
No matter the industry that firms operate within, business goals around keeping customers engaged, satisfied and coming back for more are important growth drivers.
That’s why PYMNTS sat down with Rite Aid’s Chief Marketing Officer Jeanniey Walden and MoneyLion’s Chief Marketing Officer Cynthia Kleinbaum Milner to take a deep dive into the intricacies of loyalty programs and the innovative strategies businesses can use to stay ahead in the digital loyalty game.
“The biggest thing that you can do, in any company of any size, is step back and reassess how you’re defining your customer,” explained Walden.
Rather than segmenting customers by channels, such as in-store or digital, she stressed viewing loyalty through the lens of the customer’s unique journey and understanding that customers interact with brands across various touchpoints. Therefore, engagement needs to be made seamless and effortless, regardless of the platform or channel.
Milner highlighted the significance of creating what she termed “irrational loyalty.” By providing value beyond traditional offerings and fostering a sense of trust and support, firms can cultivate deep connections with customers that transcend mere transactional and “rational” relationships.
Still, the benefits of a winning loyalty program, including increased customer retention, higher margins and amplified brand advocacy, don’t appear for free. Businesses must pay to run these programs, and the desired return on investment can impact the approach they take.
“We talk about our loyalty program not as a cost center, but as a profit center to the business,” explained Walden.
Milner highlighted the importance of striking a balance between hard benefits (those that incur costs) and soft benefits (value-added perks that enhance the customer experience without significant expenses).
“We’re creating a membership that has some very prominent benefits that are expensive to fulfill, but not everybody’s going to take them,” Milner said. “We have a credit-building product, but not everybody’s in the market to build their credit all the time. We have cash back rewards on things like personal loans, a benefit that’s almost unheard of, but how often do people get a personal loan?”
By strategically designing a membership program portfolio with a mix of both types of benefits, it is possible to drive profitability while delivering meaningful value to members, she added.
The two CMOs aren’t without help in designing and delivering their member program initiatives. The ability to use data-driven insights has transformed the ways businesses can stay ahead in the digital loyalty game.
Both Rite Aid and MoneyLion use data to enhance their loyalty programs, albeit in different ways. Rite Aid focuses on understanding customer behavior and preferences to tailor personalized experiences and offers, while MoneyLion uses artificial intelligence to identify eligible products and deliver targeted communications.
“The first thing we did was we took a look using the data that we have access to, non-personally identifiable information, and identified the eight main reasons that anybody will shop at a Rite Aid in-store or online, and used those to help craft our loyalty programs,” explained Walden.
“It helps us not just from a marketing perspective and a technology perspective, but from a merchandiser’s perspective as well,” she added.
Milner highlighted that all of MoneyLion’s interactions with its customers are across digital channels.
“One challenge is that we have too much data … and we use AI just to be able to surface the right product or piece of content, ensuring that it’s relevant to them,” she said, explaining that in financial services there is no purpose in showing a consumer a product they aren’t eligible for or one they may not want or need.
“We use AI to ensure that everything you’re presented with is going to increase your lifetime value … it’s truly personalized,” Milner added.
With consumer preferences and market dynamics constantly evolving, the need for loyalty program strategies that stay fresh and innovative remains paramount.
“You can’t just launch a loyalty program and then let it be,” Milner said. “You always have to be adding new benefits, and those benefits have to be developed based on what you learn from the users.”
“And I wasn’t sure that this worked until I saw it in action, but when you remind people of the value that they’re getting … the more you communicate that value they are getting and what they are able to do with it in return, the more loyal they stay,” she added, noting that many times people in a loyalty program may not even be aware that they’re part of a loyalty program.
Walden stressed the need to focus on education and clear communication of benefits to ensure that both employees and customers understand the value proposition of the loyalty program.
“One of the things we focus on a lot is how do you educate the store associate or employee to get them not just be able to understand what the loyalty program is but be excited about it and communicate it to customers in a way that supports the program’s benefits,” she explained.
By embracing innovation, using data and technology, and prioritizing customer-centricity, businesses can navigate the digital landscape successfully and foster long-lasting relationships with their customers.
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