Loyalty programs are undoubtedly one of the longest-running customer retention initiatives, and reasonably so — they’re not only incredibly effective but continue to become even more impactful as consumer behavior evolves. As it stands, consumers consider a brand’s loyalty program as more impactful than its website, digital presence, and likelihood for recommendations combined.
Now that these programs occupy such a critical role in customer retention, many business leaders are looking to emerging loyalty program trends to inform their strategies for the year ahead. So, how are loyalty programs changing, and what is the future of loyalty programs? From gamification in loyalty programs to technology-driven loyalty trends, here’s what to anticipate for 2024.
Loyalty Program Trends: Personalization
Artificial intelligence (AI) technology is everywhere. While it’s been around for several decades, modern iterations of AI and advanced statistical models have now catapulted technology like machine learning (ML) and predictive analytics into the collective consciousness. Today, brands are deploying AI to enhance business loyalty initiatives with personalized rewards programs.
As a prominent loyalty program trend, AI-powered technology gathers and interprets customer data, including purchase history and rewards redemption, to create personalized rewards that resonate on a deeper level. As per a 2023 personalization report, nine in 10 businesses already use AI-driven personalization, and another 69% of business leaders are increasing their investment.
Whether customizing travel itineraries, offering exclusive experiences, or tailoring rewards based on past interactions, personalization is critical to fostering meaningful connections with participants. 80% of members are more likely to purchase from a brand that offers personalized experiences, and members who redeem personalized offers spend 4.5× more annually.
Loyalty Program Trends: Integration of Gamification Elements
Gamification in loyalty is another trend that’s been years, if not decades, in the making. However, in 2024, gamification will no longer be a novelty but will be integral to loyalty program design. A vast number of customer retention strategies now incorporate game-like elements to enhance user engagement and create a more enjoyable and interactive loyalty program experience for members.
Points, badges, and leaderboard systems have become seamlessly integrated into white-label travel rewards, making earning and redeeming points a more entertaining and rewarding journey. This popular trend not only motivates participants but also adds an element of fun to the overall loyalty program experience, regardless of the type of program structure.
Even more importantly, statistics show that gamification in loyalty programs garners impressive results. Brands that leverage gamification report a whopping 47% increase in member engagement, a 22% improvement in brand loyalty, and, as a bonus, a 15% boost in brand awareness. More than two-thirds of the world’s top companies have already incorporated gamification.
Loyalty Program Trends: Sustainability as a Key Driver
Sustainability as a retention driver is one of the newer loyalty program trends; however, it’s also one of the more innovative loyalty solutions. With an increasing focus on environmental consciousness worldwide, sustainable loyalty practices appeal to a broad range of demographics. Recent reports indicate that sustainability-focused consumers make up almost 20% of the buying population.
However, it’s not just eco-conscious consumers who prefer sustainable practices. Regarding brand loyalty, 63% of consumers agree that sustainability — in the shape of ethically-focused brands and zero carbon emissions — is crucial. When loyalty programs can deliver on this promise, customers are 9.9× times as likely to spend more with a brand and 3.4× as likely to become brand advocates.
In the travel vertical, loyalty programs aligned with sustainability goals often include eco-friendly white-label travel rewards, such as carbon-neutral travel choices, sustainable accommodations, or the option to donate loyalty points to environmental causes. This trend contributes to a more positive brand image for those incorporating sustainable practices into their loyalty programs.
Loyalty Program Trends: Seamless Integration of Technology
Technology will continue to shape loyalty program trends in 2024. From mobile loyalty apps to AI-driven chatbots, businesses use technology to create seamless and user-friendly loyalty program experiences. For white-label travel rewards, this means streamlined booking processes, real-time updates on rewards, and personalized notifications based on user preferences.
“In today’s economic environment, brands across the spectrum are under pressure to generate more revenue from customers, and the travel industry is no exception,” says Jeff Zotara, arrivia Chief Marketing Officer.
“The most obvious way for travel loyalty programs to drive more revenue from existing customers is by taking a member-centric approach to value, leveraging technology — like big data, machine learning, and AI — to gather data and develop personalized offers that speak to member preferences.”
Integrating technology and white-label loyalty program trends enhances the membership experience and provides businesses with valuable data for further customization and optimization. Since 60% of consumers already expect brands to anticipate their individual service needs, technology helps identify and improve challenges in the member experience.
Loyalty Program Trends: Multi-Channel Accessibility
Multi-channel loyalty strategies are undeniably the future of loyalty programs. In 2023, loyalty programs broke free from traditional constraints and expanded across multiple channels. Whether through mobile apps, websites, social media platforms, or even in-store interactions, brands now ensure that members can engage with and benefit from loyalty programs wherever they are.
For white-label travel rewards, multi-channel loyalty means the flexibility to book and redeem rewards seamlessly across various platforms, making the entire experience more convenient and accessible for participants. By offering the ease and ubiquity of mobile wallet solutions, loyalty members are 3× as likely to make repeat purchases and produce 3.5× more revenue.
Even more, businesses that implement a multi-channel loyalty strategy experience a “significantly higher” customer retention rate. One report found that businesses that embrace omnichannel loyalty program trends retain a shocking 89% of their customers, compared to a 33% retention rate for businesses that lack an omnichannel approach. In other words, multi-channel is the future.
Using arrivia to Stay Current with Loyalty Program Trends
The start of a new year will always bring about new loyalty program trends, whether it’s the personalization and gamification of loyalty rewards or the shift to sustainable loyalty practices. The start of 2024 is certainly no exception. Various digital loyalty trends have swept across the business landscape in recent weeks, bringing newfound travel rewards trends in their wake.
Fortunately, the experts at arrivia are known to keep pace with the trends in travel rewards and remain one step ahead. If you’re looking to stay current with loyalty program trends, explore our white label travel rewards today.