Why customer loyalty can be your inflation crisis lifeline

Can you tell us about your experience in customer loyalty and your role at Antavo? 

I’m the chief strategy officer and one of the co-founders of Antavo, the enterprise loyalty programme management software. I started thinking about Antavo’s business plan more than 12 years ago. Eventually, the company was founded in London by myself and three others. Since then, I’ve seen the company grow from a start-up into a scale-up, reaching the point of serving enterprise-level companies from all over the world, including KFC, La Cage restaurant and sports bar, and BrewDog.

How do loyalty initiatives help businesses overcome the current economic climate?

Crisis situations tend to completely disrupt the market and upset customers’ lives, which ends up transforming the way customers interact with brands. On the bright side, these challenging times hold many loyalty programme strategies for brands that are ready to innovate and prioritise customer retention.

A comprehensive, next generation loyalty program can offer financial savings, retain savvy customers, and emotionally engage buyers. It’s no surprise that, according to our Global Customer Loyalty Report of 2023, 88.5% of companies are trusting loyalty programmes to help them overcome the inflation crisis, while eight out of 10 companies are going to revamp their loyalty programmes in the next three years to keep up with the ever growing demand of customers.

Loyalty programmes offer several ways for brands to keep their customers near during times of crisis, for instance, by offering customers financial benefits and ways to save money. Businesses can also modify their loyalty programme to be less about financial benefits and more about emotional loyalty, like sending personalised messages or providing feel-good rewards. If their offer has better benefits, they will even have a chance to attract customers from their competitors.

Why should customer loyalty be prioritised over customer acquisition right now? 

In today’s highly competitive market, customer retention and loyalty are no longer just important for a successful business, but have become a crucial lifeline as people tighten their purses. In times of crisis, brands need a way to encourage customers to keep shopping with you and to make them feel that you care for them. A loyalty programme is a great way to do all of the above. Since acquiring new customers costs five times more than retaining current customers, it’s even more important to focus on your existing clientele during times like these.

Furthermore, the approach to retaining customers has shifted from a purely transactional one to a more emotional one, where both the customer and the business consciously invest in each other for long-term benefits. Therefore, creating a sincere and emotional connection that resonates with customers is the fundamental key to retaining them.

Companies plan to focus much more on their existing customers, as studies from this year forecast that the loyalty management market will grow to $18.2bn (£14.5bn) by 2026. According to our report findings, 67.7% of companies want to increase their investment in customer retention. Our research also found that the average annual spend of members who redeem personalised offers is more than four times higher than those who have never taken advantage of personalised offers.

Considering the uncertainty the global economy is currently facing, these numbers paint a picture that shows how investing in customer loyalty — especially in retention and personalisation — is a worthwhile business move, and can indeed turn out to be the famed lifeline during the inflation crisis.

What are your recommendations for maintaining customer loyalty in hospitality? 

One of the business problems to solve for hospitality brands is how to keep members engaged when loyalty programmes aren’t top-of-mind. Customers expect more these days and options are infinite, so brands must get this right. One way to maintain customer loyalty in hospitality is by focusing on experience, personalisation and rewarding customers outside of the buying cycle as well. 

For instance, utilising gamification or rewards that are experiential in nature makes each interaction memorable and custom-tailored. Companies should shake things up a bit and add elements to their loyalty programme that customers are not expecting – be it challenges and badges, a fun spin the wheel, or rewarding members’ positive lifestyle choices.

Smartphones also offer the gateway to a brand-new form of customer interaction. From reserving tables and ordering in advance, to scanning QR codes for special, members-only treats and playing a mini-game while waiting in a restaurant, the possibilities are endless.

Can you give us some examples of how this has worked for KFC and brasserie La Cage? 

KFC revamped its previous stamp-based loyalty programme and created KFC Rewards Arcade. It works exclusively via the KFC App and puts a fun spin on loyalty programmes with arcade-style gamification and offers customers opportunities to win delicious rewards instantly. Thanks to their loyalty programme, KFC has experienced a 53% increase in the number of app downloads and 31% of customers claim to use the app more frequently. 

The gamified loyalty experience encourages customers to interact with the brand more frequently, and across more channels — most prominently, on mobile. This approach also allows KFC to collect vital customer data in a holistic manner, across a larger pool of touchpoints, and keep experience-driven customers engaged for a long time.

Canadian sports restaurant chain La Cage wanted to revamp its Club Cage loyalty programme to focus on rewarding customers beyond dining. The new Club Cage is a points-based programme with four tiers and elements like rewards for employees and special offers for sport team fans. The programme has an exciting array of offers and rewards, which change depending on the day of the week and special sporting events, which makes every day of the week an exciting one in Club Cage. As members, customers can get special recurring offers depending on the day of the week, like discounts on wine and wings.

Finally, what upcoming trends in (both online and offline) customer loyalty should hospitality businesses pay attention to?

Customers are increasingly interested in sustainability and loyalty programmes are going to play a more important role in making the world a better place, as they can be used to further encourage members to care more about sustainability or live a healthier lifestyle. According to our report, 50.8% of companies plan to reward responsible behaviour. Businesses can do this by offering points and rewards for useful actions, like drinking enough water, supporting a local community, or purchasing eco-friendly products.

Since smartphones have become the standard mobile device, more companies have designed and created their own app, helping them to become a mobile-first business and brand. Hospitality businesses can leverage mobile loyalty programmes to offer seamless and convenient experiences for their customers. For example, offering mobile check-ins, keyless entry, and in-app rewards to their loyal customers.

Gamification continues to be a popular trend in customer loyalty, where hospitality businesses can offer rewards, challenges, and competitions to engage their customers and keep them coming back. For example, restaurants can offer loyalty points for completing challenges such as trying a new menu item, or hotels can reward members for participating in a fitness class, or exploring local attractions.