Len Covello commented that the traditional concept of loyalty, where individuals accumulate a specific currency like air miles over time and then redeem them, has shifted in recent years. Loyalty programs have increasingly embraced personalization.
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GLOIn its recent inteview to PYMNTS, Len Covello, CTO of Engage People, dived into discussion of how loyalty programs are adapting to align with the evolving values of consumers.
He commented that the traditional concept of loyalty, where individuals accumulate a specific currency like air miles over time and then redeem them, has shifted in recent years. Loyalty programs have increasingly embraced personalization.
Covello noted that loyalty programs are now more about delivering value for services, rather than rewarding specific actions. The days of collecting stamps and redeeming them at a merchant’s counter, or browsing through catalogs sent in the mail, are long gone. Gift cards are also becoming less popular, as they restrict consumers to a specific merchant’s ecosystem of stores and their website.
Covello emphasized that this shift indicates a need for more meaningful and relevant interactions in loyalty programs. “Pay with points” is an innovation that facilitates real-time interactions and transactions, enhancing the overall engagement between consumers and loyalty programs.
He also pointed out that loyalty programs can elevate these interactions across a variety of online and offline channels, blurring the lines between digital and brick-and-mortar commerce. Retailers, as they update their systems and embrace modern technology, have the opportunity to gain a holistic view of how individual consumers interact with their brands across various channels. This comprehensive view allows merchants to tailor rewards in a personalized and real-time manner.
Covello explained that while the data for these insights has existed for some time, retailers are now more open to embracing and leveraging it. Advanced technologies like AI and machine learning play a crucial role in synthesizing this data into actionable insights. Engage People and similar companies help retailers create targeted and personalized loyalty programs that offer specific rewards to consumers as they interact with the brand, such as double points, through their mobile devices while shopping in stores.
This approach leads to a significant improvement in the effectiveness of personalized offers, with click-through rates increasing by as much as 100%, according to Covello.
In today’s economic climate, where everyday essentials are more expensive, the ability to pay with loyalty points becomes even more valuable. Covello stressed that loyalty transactions should seamlessly occur during everyday interactions with a merchant, such as buying morning coffee or groceries, and should be easily completed using the consumer’s preferred brand.
Ultimately, the goal is to provide immediate gratification and strengthen brand loyalty, which Covello referred to as the “holy grail of loyalty.”
Source: PYMNTS
