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REPORT

Loyalty Program Trends 2023

The Loyalty Trends Report 2023 covers everything you need to know about what’s in stock for the industry in 2023. Key trends, goals, challenges and areas of investment. The research is based on a survey completed by 100 high-profile marketers from various industries across the world.

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The Loyalty Trends Report examines the future of loyalty marketing across many different areas. Looking at things such as key challenges, unravelling trends, areas of investment as well as loyalty marketing goals specified by our respondents, we bring you an unvarnished depiction of the future of loyalty in 2023 and beyond. 

Our respondent base is made up of 100 experienced loyalty marketing professionals hailing from all corners of the world and countless industries.

What will you learn from this report?

The 2023 report will provide you with an answer to the following questions:

  • What challenges do loyalty marketers expect to face in 2023?
  • What loyalty marketing goals will be the focus over the following year?
  • What will be the most significant areas of investment in 2023?
  • What will the next 2-3 years look like for loyalty programs?
  • What trends will have the greatest impact in loyalty marketing over the next 2-3 years?
  • What brands are perceived as thought leaders in the loyalty space?

The report starts out by looking at the most common answers to the above questions, accompanied by a comparison between this year’s results and those obtained last year.

The second part shows commentary from loyalty experts, elaborating on their chosen goals, predictions and challenges for the future of the loyalty industry.

Read the executive summary below.

Who are the loyalty experts behind the report?

As with earlier editions of the report, we have made sure to get answers to the above questions from the loyalty industry’s top experts. As such, this year’s report features responses from 100 loyalty marketing professionals working in-house, independently, and at agencies all over the world.

The shared industry experience of our respondents covers companies such as Virgin Atlantic, Visa, Mastercard, British Airways, Disney, P&G, BP, Shell, IKEA, Vodafone, Sephora, P&G, Tesco, L’Orèal, Harrods, Harvey Nichols, Lego, Marriott, and many more. 

Find out what the experts think.

What are the top-line findings for customer loyalty trends?

Challenges

While the usual goals such as improving customer lifetime value, reducing churn and maintaining high levels of customer acquisition and retention feature in the report findings, 2022 seems to have presented loyalty marketers with a whole new set of new ones to contend with.

One of the most frequently cited challenges was that of the looming recession. Due to the crisis, companies are facing dilemmas with regards to their budgets. Many are reducing spend, by pulling back investment in some loyalty initiatives like mobile loyalty applications. At the same time, competition in the loyalty space is fiercer than ever as more companies are choosing to incorporate loyalty programs into their offerings.

With increasingly price-conscious customers, reduced budgets and competitors cropping up left, right and center, it’s become extremely difficult for businesses to retain customers in the current climate.

Another challenge frequently reported is that of a lack of originality in the loyalty space. Many respondents believe that too many brands are doing the same thing and that there is little appetite to be bold and do something interesting. The issue isn’t helped by the living crisis, which is making businesses spend more conservatively. 

Data-driven marketing and an overall better use of data to make programs more personalized and responsive to customer preferences is yet another challenge businesses are facing.

Loyalty program trends matrix 

The graph shows the importance of the chosen trends from two angles: the biggest impact on customer loyalty marketing over the next 2-3 years, and trends with the biggest urgency in terms of investment in 2023.

Loyalty trends 2023 matrix
Loyalty trends 2023 matrix

Trends for next 2-3 years

This year, gamification, experience-based rewards and predictive analytics were identified as some of the key trends to make an impact on the loyalty space over the next 2-3 years. 

The the top three trends that marketers actually plan to invest in in the following year are almost the same with the exception of marketing automation taking the place of predictive analytics.

Experts confirm that gamification and engaging customers in a non-transactional way is becoming a crucial way to stand out from the competition. 

The fact that marketing automation is one of the key trends loyalty marketers plan to invest in is also no surprise given its potential with regards to things such as data collection, personalization and, most importantly, creating memorable customer experiences

Companies’ focus on the collection and use of data to offer more personalized experiences remains a steady concern, especially as customer expectations increase and Gen-Z become a key segment.

The ever-so-stronger relationship between payments and loyalty forges ahead, which will also be key in the upcoming recession.

Some of the biggest surprises this year was the relegation of last year’s key trends such as mobile apps and mobile payments, pointing to either a shift in priorities or changed beliefs with regards to what delivers the best ROI during uncertain times such as these ones. 

Interestingly, the popularity enjoyed by these the two has now been superseded by experience-based rewards, which didn’t fare nearly as well in last year’s report.

The future of customer loyalty programs

As more and more businesses choose to incorporate loyalty schemes into their offerings, competition in the space will become a lot more pronounced. As a result, we’re likely to see providers try to differentiate themselves, by experimenting with a wider range of reward types and new technologies.

With customer experience benchmarks increasing post pandemic and consumer expectations spiking, data-driven marketing and personalization will also become more prevalent in the space. Providing seamless and highly tailored experiences across multiple touch points will gradually become the norm.

What’s not yet clear is the long-term impact of the recession on the loyalty space: will it drive innovation, or make brands invest in loyalty marketing initiatives more conservatively in order to defend margins?

One thing that is sure, however, is that the upcoming years will be challenging for loyalty marketers, requiring them to be more strategic in their action plans and budgets than ever before, as the YoY changes show.

What the experts say

Tom Peace

Managing Director at the Loyalty People

What challenges do you see for loyalty marketing in 2023?

Members expect more from their programmes in terms of positive engagements and experiential rewards, especially CSR, charity, sustainability and provenance.

How do you see the future of loyalty programs over the next 2-3 years?

Rational rewards such as airmiles, points and cashback will still be valuable, but members are now looking for emotional connections with their programme. They want to feel that the brand aligns with how they FEEL about today's issues and that it can provide money can't buy experiences.

Alexa Jachowski

Senior Director, CRM at FreshDirect

What challenges do you see for loyalty marketing in 2023?

In 2023 we will be seeing continued high inflationary costs, and thus customers will be wanting to get more value for their dollar. This means that companies will have to offer higher rewards offerings, a more frequent catalog refresh, and greater incentives to join a program in order to keep customers loyal to a brand.

How do you see the future of loyalty programs over the next 2-3 years?

Personalization is going to be key, as customers want to feel like brands know them and are giving them what they want. We are also likely to see an increase in subscription/pay-to-play models, as companies look to smooth out liabilities while offering greater value for joining the program.