In a survey conducted by Antavo, the loyalty cloud platform, around nine in ten businesses have plans to overhaul their current loyalty programs by 2027, with 65% aiming to replatform within the same timeframe. It was also revealed that loyalty programs constitute an important part of numerous business strategies for customer acquisition and retention. Around 60% of businesses have already made major changes within this realm in the past two years.
The survey found that an overwhelming 89% of businesses are planning to invest in new customer loyalty technology to enhance their customers' experience this year. This decision comes in the wake of a challenging year for customer retention as businesses scrambled to retain customers amidst a spending crunch. Consequently, loyalty marketing technology is set to play a pivotal role in the plans to retain and augment customer spend, with 90% of companies planning a revamp of their current loyalty programs within the next three years. Almost half of these companies - 44% - have expressed dissatisfaction with their existing loyalty program.
In addition, 65% of businesses are considering replatforming their loyalty technology as part of their investment plans. This data was extracted from Antavo's Global Customer Loyalty Report 2024 that surveyed over 600 senior business executives, analysed more than 30.5 million customer interactions on its platform in 2023, and carried out qualitative interviews with 50 industry experts. The report was written with additional insight from VML (formerly Wunderman Thompson), EPAM and Frog / Capgemini.
Zsuzsa Kecsmar, co-founder and Chief Strategy Officer at Antavo, commented, "There has been a marked shift towards customer retention in the past few years over winning new ones. As a result, an overwhelming majority of businesses are actively seeking to evolve from their legacy technology and replatform to one that will enable them to strengthen their relationships with their existing customers."
Crucially, the report disputes the notion that loyalty programs are a cost centre, highlighting that nine out of ten businesses have noted a positive ROI. In fact, the average ROI for these companies is 4.8 times their investment. Zsuzsa added, "Focusing on your most loyal customers is worth it, so it's not surprising that twice as many companies want to invest in retention instead of acquisition."
Around 81% of businesses agreed that their loyalty programs helped them navigate through rising inflation and economic concerns in 2023. Consequently, the decision to invest in customer relations through an overhaul of loyalty technology is considered a key strategic move for 2024. James Baker, Head of Strategy at VML, concurred, saying, "This compelling research from Antavo shows that companies are increasingly recognising the value of investing in retention over acquisition, as loyal customers are more likely to make repeat purchases and refer others to your business."
Zsuzsa emphasised the potential for hyper-personalised loyalty programs as the number of customers redeeming personalised rewards is 4.3 times greater than those redeeming non-personalised rewards. In addition, 67% said that microtargeting delivers a higher financial benefit than the cost involved in its implementation. She concluded, "In light of the rapidly changing technology landscape over the last 12 months, it's not surprising to find that so many businesses are actively looking at how they can replatform and repurpose their loyalty initiatives. The collective investment in new technology will represent a significant economic event in 2024."