In the modern age, it is not enough that you produce a cutting-edge product or service that caters for everybody’s needs and desires, companies have to offer something more. And loyalty programs are the way to do this.

But are they everybody’s cup of tea? This is the question that needs to be answered.

A recent report on pointed out that Loyalty programs are hardly new, and most of us are members of more than one loyalty programs. But do they really work? Speaking at the company’s Forrester Predictions 2019 Singapore breakfast event held on Tuesday, Tom Mouhsian of Forrester APAC explained to why loyalty systems are due for an overhaul.

A wrong focus

The article adds that to illustrate his point, the principal analyst for customer experience drew attention to how loyalty points are traditionally recorded as a liability. For instance, airlines only recognize revenue when members of their loyalty programs fly, or when awarded miles expire without use. This turns loyalty into a short-term liability rather than the long-term asset they represent, he argues.

“Traditional [loyalty] programs that rely on deal tactics, discounts, promotions. All they are trying to do is push a product. This is about creating behavior from customers that is about instant gratification.” Such a focus diminishes real customer loyalty, said Mouhsian.

Importantly, research suggests that traditional loyalty programs don’t work: 77% of consumers retract their loyalty more quickly than three years ago. 71% don’t think loyalty programs improve loyalty, while 23% say they have negative reactions or no reaction to loyalty offers.

The allure of platforms

Exacerbating the issue is how rapidly growing third-party platforms threaten to make traditional loyalty strategies irrelevant. The wider choice, convenience, and price are making consumers increasingly loyal to platforms, observed Mouhsian.

As consumers are attracted to platforms and use them more, their loyalty will be drawn to these platforms – and away from brands. In this new paradigm, consumers can easily compare products and prices on their marketplaces of choice, effectively commoditizing brands.

Indeed, global marketplaces and platforms such as Amazon, Google, Netflix, and Facebook have already established a strong ecosystem peddling products and services they don’t have to make our own,  Mouhsian told

As the growth of platforms and marketplaces force a substantial redistribution of customer interactions involving alliances with third-party channels, individual brands seeking to remain relevant will need to partner with leading platform businesses and extend their capability features to partner platforms.

Moving ahead

As the number of unclaimed loyalty points rises and consumers disengage with individual brands, Mouhsian called on brands to rethink traditional assumptions to innovate with their loyalty programs. A repeat purchase is not loyalty and cannot be guaranteed by the issuance and accumulation of reward points or miles, while unclaimed points should be viewed as an indication of ‘disloyalty’.

Already, subscription models are on the rise to displace conventional loyalty points program with an easy opt-in and family sharing options. Mouhsian cited examples such as LiveUp by Lazada, Score by Grab and Amazon Prime as examples. A subscription-based approach will offer greater value, fairness, flexibility while ensuring the longevity of ongoing customer relationships, he says.

“Bring customers back to the brand if you want to keep them. Make sure they are married to your brand, not to your product. Loyalty programs that push products don’t work,” said Mouhsian. “Get on your customers’ favorite platforms through new partnerships. If you are not on the platforms that your customers use, you may not be visible to them.”

Moving ahead

Is it all doom and gloom when it comes to customer loyalty? Another article on suggests not.

Technology adoption is imperative to maintaining a competitive edge, but many organizations rely too heavily on it without understanding technology’s impact on the customer experience, says a new study.

Titled “Are You Listening? The Truth About What Customers Want in a Digital World,” the study of more than 3,000 customers in the U.S and U.K was commissioned by Calabrio, a provider of customer engagement and analytics software.

The human touch

The article questioned what exactly that motivates customer behavior in an increasingly digital world? Findings from the study suggests that it is a blend of human nature and meaningful experiences that organizations create with customers that are the drivers to digital behavior and loyalty.

Human nature is how customers think, feel and act, and is what drives their digital behavior. To gain their loyalty, customers should feel heard and have an emotional attachment to the brand, which is something that can only be created through the human connection.

The article adds that while chatbots, virtual assistants and other new communications technology offers increased convenience, most customers (58%) still believe that picking up the phone and talking to a representative is the way to get the best and most efficient service. This means that well-trained agents that are knowledgeable and empathetic can turn interactions into a positive, relevant experience that creates an emotional connection to the company.

“True loyalty doesn’t come because of an app. It doesn’t come because you have a punch card where after ten punches you get a free sandwich. It is about the relationship. Take away those ‘perks’ and would the customer still be loyal?” Shep Hyken, a speaker on customer service told

Making it work

To earn customer loyalty, companies must listen and act to deliver experiences that customers want by finding the right balance of technology and the human touch, notes the report. Customers want to be heard, and they want to create an emotional connection with brands.

The article points out that, specifically, it was found that 48% of customers are more loyal if they get a hold of a company quickly and easily. Elsewhere, 74% of customers are more loyal if they can speak to someone; 60% of customers feel like their voices are heard when they speak to a live person

“Innovation is key for businesses to stay competitive, but to build a lasting connection, new technology must meet customers where they are,” Tom Goodmanson, president, and CEO at Calabrio told

“Given the growing volumes of customer interactions in today’s contact centers, companies have a tremendous opportunity to tap into customer preferences, needs and wants by capturing and analyzing interactions across service channels—phone, chat, email, social, etc. Those valuable insights drive the customer journey, and ultimately, brand loyalty,” said Goodmanson.


So what makes a loyalty program successful? An article on gave GTconsult the ABCs.

The article points out that more and more retailers are launching loyalty programs to attract new customers and keep those they already have. However, many of them underestimated the high value that loyalty programs yield when it comes to keeping customers devoted, which is especially important in order to thrive in the age of the empowered customer.

The article adds that loyalty programs are created to help retailers drive customer engagement and retention. However, only 1% of consumers in Hong Kong are “devoted” and express a willingness and desire to forge enduring relationships with their preferred brands. Whether your loyalty program is “official” or “informal”, it is critical for you to think it through thoroughly at inception, and pay close attention to its ongoing execution and profitability.

Here are seven key factors to help you get on the right track for loyalty program success and appeal to your customers’ heart. They are taken from the article.

1. Personalize your data

A recent study by ICLP revealed that 69% of Hong Kong consumers would buy more if retailers used their data to better understand shoppers’ individual needs and requirements. If you are able to use these insights to enhance customers’ experience, you will have a greater chance to develop a “devoted” relationship with your customers.

To generate different shopper personas with richer insights and using these shopper personas to map relevant incentives to drive behavior, you need to move from an exclusive “pay to play” membership based on a set purchase amount to an inclusive approach that invites all customers to your program. With the ability to gather vast amount of consumer data through the growth of the digital landscape, you can harness this data and with this single view of the customer determine your engagement and investment strategy for different consumer segments.

2. Make your program simple and consistent

Your loyalty program must be consistent wherever your customer shops online or in-store. If “published”, your loyalty program should be continually updated with new features added as a way to entice more subscribers.

Members need to clearly understand the value of their participation: how they will be rewarded for their loyalty and how they can reach the next tier. Most importantly, to be successful, your loyalty program should be an extension of your brand and structured using comprehensive loyalty strategies.

3. Surprise your customers

There has been a significant increase in competition with customers enjoying wider access to retailers, local and global, through the many different channels and devices with the convenience of the mobile wallet and ease of delivery. These empowered customers have a higher expectation on receiving more relevant/personalized communications, offers and rewards.

Your loyalty strategies need to surprise and delight your customers in order to keep them coming back and ultimately, to drive deep devotion to your brand. To remain competitive and capture customers’ attention, ensure that your program is markedly different from others on the market – think out of the box and get noticed!

4. Loyal employees drive loyal customers

Your front-line staff are fundamental to driving customer loyalty and devotion and are your brand’s one-to-one marketers. They need to be educated, energised and engaged with your brand and its values so that they, in turn, can engage your customers and maximize the revenue potential.

Equipping your sales associates with the tools to understand your customers and develop relationships can be accomplished by providing access to customer profiles through mobile devices. Your staff need to fully understand how your loyalty program works both in-store and online to drive revenue and offer a superior customer experience. They also need to feel that the program supports them in helping meet their sales targets and other business objectives.

5. Promote your program and its benefits

Obviously, if customers do not know that your program exists, it is not going to drive traffic into your stores or to your website and you can forget about reaching your loyalty program membership targets.

Many retailers are brilliant at promoting their brand and advertising their next season’s collection, however, they fail to tell their customers about the benefits of the loyalty program or how/when they will get rewards. You need to continue to invest in implementing multichannel loyalty strategies and articulating your brand personality through your program.

6. Your program rewards customer behavior

The most common customer complaint with loyalty programs is that it takes too long to accumulate enough points or rewards to see any benefit. Valued customers expect to see rewards and the program working beyond a transactional level from day one. Therefore, a loyalty program should not only reward purchases, but also brand advocacy, event attendance or simply for being a longstanding, valued member.

7. Track the loyalty and set your targets

Many businesses find it difficult to prove the commercial viability of their loyalty programs, partly because these programs are not properly tracked or targets differ from what the program was developed to drive. If you want your loyalty program to succeed, you need to be sure that it is performing and know when to make necessary tweaks.

KPIs should be set across every touchpoint: tracking new sign-ups, repeat purchases, positive reviews, social media activities and brand advocacy such as referrals. It should also be clear how the ROI is going to be measured and improved. To achieve this, you need to ensure your loyalty metrics are set across all areas of your business, from logistics and fulfillment to digital experience teams, product development and sales departments, as well as partner with loyalty specialists such as ICLP to drive your customer devotion.

“Customer loyalty is important to GTconsult. While we may not have a loyalty program, our dedicated staff offers round the clock solutions to our clients. To us, customer loyalty is at the heart of our business,” said Bradly Geldenhuys, Co-Founder and CEO of GTconsult.