Earn points, get rewards. Today’s loyalty programs have been very transactional, which creates two problems:

1. They promote rational loyalty, not emotional loyalty. This means your customers can be easily swayed by a slightly better competitive offer.
2. They limit the amount of differentiation your program can provide. This makes programs less engaging, leading to apathy and very few incremental sales. 

That makes customer experience (CX) more important than ever. While traditional points-based loyalty programs still have their place, they are no longer enough to keep customers coming back. Today, savvy brands are realizing that creating engaging and memorable experiences are key to winning customer loyalty and driving growth.

What brands are doing to focus on building deeper, more meaningful connections with their customers

There has been a shift from transactions to experiences.  For years, loyalty programs focused primarily on transactional rewards: spend more, earn more points, get a discount. However, as customer expectations have evolved, so too has the concept of loyalty. Today’s customers are looking for more than just rewards; they seek personalized, engaging, and emotionally resonant experiences.

What Brands are seeing and how they are adjusting

1. Customer Expectations Have Changed: Today, customers expect brands to understand their needs and preferences and deliver personalized experiences that go beyond transactions. They want to feel valued and understood. They are drawn to brands that create memorable experiences. This shift in expectations is driving brands to rethink their approach to customer engagement and loyalty.
2. The Rise of Experiential Loyalty: Experiential loyalty goes beyond traditional rewards to create unique, personalized experiences that resonate emotionally with customers. These experiences can range from exclusive access to events and behind-the-scenes content to personalized product recommendations and tailored communications. By focusing on creating meaningful connections with customers, brands can foster deeper loyalty and build lasting relationships.

How Brands Are Creating Experiences Customers Want

Brands are increasingly investing in strategies that prioritize customer experience and engagement. Here’s how they’re doing it:

1. Personalization: Personalization is key to creating a memorable customer experience. By leveraging data and analytics, brands can gain insights into customer preferences and behaviors. This allows them to deliver personalized experiences that resonate. From customized product recommendations to personalized emails and offers, brands are using data to create experiences that feel unique to each customer. Starbucks sends personalized mobile app push notifications to their customers; offering discounts on drinks or food items they think you will like based on past purchase history and purchase history of customers who buy similarly to you. The goal of these offers is to make the customer feel like Starbucks knows their preferences and likes. This also will increase spend and frequency over time.
2. Exclusive Access and VIP Experiences: Offering exclusive access to events, products, or services can create a sense of exclusivity and make customers feel special… These exclusive offerings not only drive customer loyalty but also create buzz and excitement around the brand. Foot Locker’s FLX Rewards has taken their sneaker launches and gated it behind their FLX Rewards program. This allows FLX Members to have first access to these ‘high heat’ sneaker releases. FLX Rewards also offers early access to sales and member-only events.
3. Immersive Brand Experiences: Brands are creating immersive experiences that engage customers on a deeper level. This can include anything from interactive in-store experiences to virtual reality (VR) and augmented reality (AR) campaigns that allow customers to interact with products in new and exciting ways. These immersive experiences create memorable moments that customers are likely to share and talk about, driving brand awareness and loyalty. During the Paris Olympics, Foot Locker EU created an AR campaign around the city that their FLX Rewards Members could earn points for participating in.
4. Emotional Engagement: Brands that tap into customers’ emotions, values, and beliefs are more likely to create lasting relationships. This can be achieved through storytelling, purpose-driven marketing, and by aligning with causes and initiatives that resonate with customers. When customers feel emotionally connected to a brand, they are more likely to remain loyal and become advocates. Rothy’s takes plastic from the ocean and recycles it into cute, stylish, comfortable shoes for women, men and kids. This is something that resonates with customers and keeps them coming back.
5. Seamless Omnichannel Experiences: In today’s digital age, customers expect seamless experiences across all channels—online, in-store, and mobile. Brands that can provide a consistent, seamless experience across all touchpoints are more likely to build customer loyalty. This includes everything from easy navigation on a website to personalized in-store experiences and responsive customer service. By creating an omnichannel experience, brands can ensure that customers have a positive and memorable interaction at every touchpoint. Dick’s Sporting Goods makes shopping across all of their channels easy and provides a great CX. Their Scorecard members are easily able to track points, use rewards and special offers right from the Member dashboard (online or within the mobile app). Dick’s also makes it easy to also have the same experience at in-store checkout.

Key Benefits of Focusing on Customer Experience

Investing in customer experience can have significant benefits for brands. Creating engaging and memorable experiences is a smart strategy that can improve brand perception and increase targeted KPIs:

1. Increased Customer Loyalty: Customers who have positive, memorable experiences with a brand are more likely to remain loyal and are more likely to recommend the brand to others, driving word-of-mouth marketing and new customer acquisition.
2. Higher Customer Lifetime Value: Customers that are engaged and satisfied are likely to spend more over their lifetime. By creating experiences that drive loyalty and engagement, brands can increase customer lifetime value and drive long-term growth.
3. Competitive Advantage: Providing exceptional customer experiences can set a brand apart from the competition. The more brands can differentiate themselves from competitors and build a competitive edge, the more likely customers will stay loyal.
4. Positive Brand Perception: Brands that prioritize customer experience are more likely to be seen as customer-centric and trustworthy. This positive perception can enhance brand reputation and drive customer trust and loyalty.

Summary of how CX is changing

As the customer experience continues to evolve, brands must go beyond traditional points and rewards to create engaging and memorable experiences that resonate with customers. By focusing on personalization, exclusive access, emotional engagement, and seamless omnichannel experiences, brands can build deeper connections with customers, drive loyalty, and gain a competitive edge.

In the end, the brands that succeed will be those that understand the importance of creating meaningful experiences that go beyond transactions. In today’s experience-driven world, it’s not just about earning points—it’s about earning trust, loyalty, and a place in customers’ hearts.