How businesses are using loyalty to combat inflation
With global inflation reaching a decades-long high, a focus on customer loyalty can improve retention in a time of crisis
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Recent research from Antavo has revealed that 88.5 percent of brands are putting their faith in customer loyalty programs as a solution for the global inflation crisis.
The study draws on behavioural data from more than 290 million loyalty member actions, over 600 minutes of qualitative interview and data from more than 260 industry professionals. The aim of the research is to inform CX decision makers of the potential investment opportunities in the customer loyalty space.
In many countries, inflation has reached its highest point in recent decades and entered double digits in some. With this in mind, brands are gaining awareness that a focus on customer loyalty is critical in order to retain customers that may be looking to cut down on their expenses.
With brands showing confidence in customer loyalty initiatives to combat the inflation crisis, it is unsurprising that 67.7 percent revealed plans to increase investment in customer retention and 78.6 percent claim they are looking to revamp or adjust existing loyalty initiatives.
The report goes on to offer some real-world examples of successful customer loyalty programs that show promise in their ability to offset customer churn as a result of the inflation crisis.
Driving customer loyalty at the Virgin Group
British multinational conglomerate, Virgin Group, has recognized the potential for customer churn and is in a good position to overcome the global inflation crisis due to a loyalty program that offers additional value to customers.
According to Phil Shelper, CEO at Loyalty & Reward Co, customer value is the primary reason that loyalty programs keep customers coming back to your brand:
“The evolution of loyalty programs is really one of a search for member value. Consumers join loyalty programs because they believe they will access value and they continue to engage because they perceive they are accessing value.”
Shelper continues: “Thus, the best loyalty programs are continually seeking ways to maximise the accessible value within their programs.”
The Virgin Group loyalty program, called Virgin Red, offers value to customers through an enormous range of business partners. Virgin customers can unlock rewards from the group and its many partners, including major chains like British high-street bakery Greggs and supermarket chain Tesco, through a points system. Customers earn points when spending money on any of the Virgin Group’s products or services and can exchange them for a range of rewards, including a luxury cruise.
Such a program means that customers who do think about churning will have an incentive not to do so if they have accumulated points with the brand. With customers seeking value in a time of global financial crisis, demonstrating a loss of value if customers leave your brand creates excellent prospects for customer retention when it is desperately needed.
Does your business have plans to invest in customer loyalty to combat the inflation crisis? Let us know in the comments below.
