Investing in Loyalty Programs


In a time when customers are jumping ship faster than ever before, a great loyalty program can do a lot to keep them on board—and inspire new people to join you. A recent Connected Shopper Report found that 78% of consumers are more likely to buy from a brand with a loyalty program. However, only 22% say they are satisfied with the level of personalization these programs offer. We know how to fix that.

Loyalty programs are a crucial part of customer retention and brand success, said Vitor Barros, Multi-cloud Project Director at OSF Digital. Increasing customer retention by just 5% boosts profits by 25%-95% (Bain & Company). Loyal customers also spend more overall than new ones. So, these programs are not only driving sales, but they also increase lifetime customer value. Seventy-five percent of consumers say they favor companies that offer rewards (Wirecard).

And loyalty programs play a critical part in keeping the customer engaged with the brand. The probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is only 5%-20% (Marketing Metrics).

At OSF Digital, we believe personalization is the key to your success for loyalty programs. If you treat your best friends like casual acquaintances, you won’t be very popular. The same is true with customers. Getting the same offer as everyone else or just earning points after you’ve purchased several times from the company is not as compelling as an experience tailored to your shopping history, preferences, customer journey, and value you represent as a lifetime customer. This kind of personalization and attention to detail for each customer that speaks to them as an individual is exactly what builds brand trust and loyalty.

Why do some companies fail when it comes to loyalty?

Businesses need to take the behavioral data they’re gathering from loyalty programs and combine it with other information they have about their customers to deliver personalization at scale. The problem is that the data needed is often siloed in different departments running on different systems, including ecommerce shopping carts, customer service teams, inventory management, and post-sale support. This data can be difficult and time-consuming to unify. For example, it can create long delays when siloed departments need to find a way to get marketing data on customer demographics to meet information about their past sales or opinions they’ve shared with service agents. Or a company might offer a simple point and discount program at a time when their customers prefer personalized, experience-based rewards.

The secrets of making a loyalty program successful

A loyalty solution needs hyper-personalization. According to McKinsey, 80% of customers are more likely to do business with a company that provides personalized experiences. Personalization should be integrated with the entire customer experience, including loyalty programs, to deliver relevant communication and meaningful experiences that drive loyalty and sales.

Personalization of loyalty programs leads to the second key factor: emotional loyalty. Many loyalty programs are purely transactional, but loyalty can’t be only about points and rewards anymore. Customers need to feel valued, and they need to trust the brand. When they have positive experiences, they feel that emotional loyalty that builds a sense of commitment toward a brand that will keep them coming back. Ninety-three percent of customers are likely to make repeat purchases with companies who offer excellent customer service (HubSpot Research).

Data is another key factor. With customer data, you can deliver the personalization and meaningful experiences that will lead to customer retention. It could be sending the right offer with the right product at the right time. Or it could be having all the customer’s data in the hands of the service agent helping that customer for faster, personalized service.

How Loyalty Management from Salesforce makes loyalty programs better for businesses and their customers

Because an effective loyalty program is a “must-have” for more companies than ever before, Salesforce has released a new Loyalty Management solution. This complex loyalty management program brings transparency, meaningful and outstanding experiences, personalization, and AI-driven insights.

Loyalty Management allows brands to configure a unique program that meets the industry needs of the client. Analytics provides a valuable component with easy-to-use dashboards. With the customer data and analytics, you can provide the personalization to your loyalty members that will lead to continuous engagement.

For example, service agents can access customer data on the Loyalty Program Member Profile to provide faster, better service. And the member feels miles away feeling valued with this more personalized interaction. The business runs more efficiently, while customers get the seamless service they want. And with analytics on program performance, you can adjust your loyalty program as needed to maximize the program’s success. Programs can be configured to fit a brand’s needs but can change as trends change.

  • “Customers want more than points and rewards. They don’t just want savings; they want special benefits too. They want extra perks and privileges. They want to feel valued with special VIP treatment. They want to be part of an exclusive community. Businesses are adding that emotional loyalty component to their loyalty programs, focusing on building relationships and trust rather than only offering shopping rewards.”
    Vitor Barros,Multi-cloud Project Director at OSF Digital

Loyalty Management makes the process of setting up a program even easier, faster, and more cost-effective than ever before. It’s an end-to-end solution that empowers businesses to create intelligent, differentiated experiences that grow relationships and increase customer lifetime value.

More loyalty means better relationships and more revenue

These programs will lead to stronger relationships between consumers and brands.

Most companies are either not implementing loyalty programs or have loyalty programs that are mostly transactional with fixed rewards, which may not be effective. In addition to that, customer behavioral data is often unavailable or is scattered.

The next generation of loyalty programs focuses on understanding the client better to provide unique and meaningful experiences that turn customers into brand advocates. Partnering with external entities and brands is also opening new possibilities for engaging customers.

This raises exciting challenges on customer data analysis and insights, defining personalized offers at the right time via the customer’s preferred channel, and engaging the customer on brand initiatives, experiences, and partnerships.

There is no “one size fits all” solution for loyalty

A recent Salesforce study found that 53% of customers say they feel an emotional connection with the brands they buy from the most. Loyalty programs can play a key part in building this connection—but only if they show an understanding of who each customer is and what stage they’re at in their journey. While points-based rewards might be appealing at first, brands must find ways to strengthen connections throughout the entire customer experience. This can range from giving extra incentives for repeat purchases to offering access to exclusive events.

Salesforce Loyalty Management can easily integrate with Salesforce Marketing Cloud, Salesforce CDP and your existing systems to create personalized offers and unique experiences throughout the customer journey. Built on the trusted Salesforce platform, Loyalty Management gives businesses the underlying infrastructure to build their programs and the flexibility to fully configure the program to fit their specific needs, decreasing their time to value. The mechanisms of a great program already exist within Loyalty Management. Point accrual and redemption rules, offers, and member management simply needs to be configured to your needs. This allows for a faster time to market and saves on the development costs of building a loyalty program from scratch.

At OSF Digital, we’re seeing several ways Salesforce Loyalty Management can benefit all the industries we work with, and we’re fortunate enough to work with all industries, across both B2B and B2C:

  • Retail: Creating lasting loyalty by meeting customers where they are with personalized rewards they can redeem online or in-store.
  • Consumer Goods: Elevating the consumer experience, driving consistency in demand patterns, and raising awareness and adoption of select products.
  • Communications and Media: Increase loyalty in a fragmented market by offering more relevant content based on a unified view of every subscriber.
  • Travel & Hospitality: Building trust and transparency with travelers by expanding program benefits and connecting loyalty to their entire travel experience.
  • Manufacturing: Incentivizing partners across their lifecycle, delivering immediate and long-term rewards, and increase sharing product lines carried.

Loyalty in each industry

Our clients are looking to improve their customer retention, and they’re using loyalty programs to help do this.

Some examples of loyalty program types are points-based (accumulate points with purchases and redeem points to get rewards), tiered (different benefits available for customers in different tiers), fee-based (immediate and ongoing benefits upon the payment of a fee), value-based (rewards are attributed to causes aligned with customer values), or hybrid.

All types can be applied in loyalty programs across industries. However, different industries tend to lean toward specific loyalty program types. For example, tiered programs are popular in the Travel & Hospitality industry to offer better benefits to their top customers. Telcos extensively use points-based programs that allow customers to buy phones and services at discounted prices. And it’s common to find automotive services brands offering fee-based loyalty programs, including maintenance discounts and other services.

The role of loyalty programs in B2B

When people think of great customer loyalty incentives, B2C brands usually come to mind. But these kinds of programs are equally important for B2B companies. Loyalty Management enables a business to shift from product-centric to customer-centric, helping to better engage partner channels and corporate customers with incentives that improve partner performance and help drive the bottom line.

We partner with both B2C and B2B organizations. Loyalty programs can be beneficial to both types of brands. B2B buyers want a B2C-like shopping experience. They also want to feel valued and have a relationship with the brands they buy from.

The personalized customer engagement strategies used in B2C customers also offer a unique value proposition to B2B customers. Both leverage the knowledge about customers, superior experience, and partnerships to provide added-value offers that encourage them to buy again.

There are, however, some aspects to consider when defining the loyalty strategy for the different contexts:

B2C Customers

  • Short buying cycle
  • Unique transactions
  • Spontaneous, less patient buyers
  • Individual buyers
  • Same prices for all customers
  • Value emotional experiences

B2B Customers

  • Medium/long buying cycle
  • Repeated purchases
  • Highly rationale buyers
  • Several stakeholders
  • Prices vary per customer
  • Focus on added value

B2C customers are more impulsive and sensitive to incentives to justify purchasing. B2B customers have complex buying processes that value long-term relationships that result in clear business benefits.

Loyalty and addressability

The eventual loss of cookies and other third-party identifiers means that companies will need to rely more heavily on first-party customer data to execute personalized marketing campaigns. With privacy being a big concern right now, people are only willing to give up their information if they feel it will be used to give them a better experience. Salesforce Loyalty Management enables companies to go far beyond simple “earn and burn” programs and offer customers real value. Companies and their customers also get the reassurance that Salesforce takes data security very seriously. It’s their number one value. They use some of the most advanced technology for Internet security available today. And you’ll always be 100% in control of all your data.

What’s next?

In the future, we believe more and more companies will be elevating their loyalty programs to stay competitive. Tiered offers, access to special events, and personalized product offerings will become commonplace, and that’s a huge part of our strategies for nearly all of our clients moving forward into 2022. Now is the time to focus on loyalty programs. With Salesforce, you’ll be able to put your ideas into action faster and more cost-effectively than ever before.

Ready to Grow? Let’s Talk!

Contact us today to see how OSF Digital can help you deploy Salesforce Loyalty Management fast.

Oana Dereli

Author: Oana Dereli, Executive Director, UKI

Helped by a strong mix of technical and marketing background, Oana has been advising companies from different sectors on their digital transformation journeys for over a decade. With a passion for Retail, Oana focused in the past years on bringing Loyalty into the Connected Commerce journeys to help companies maximise their technology investment while delivering meaningful experiences for their customers. In her Executive Director - UKI role, Oana leads our new business teams for all industries in the region, and tries to make a positive impact for all women working at OSF in her co-chair role for our Women’s Network.