Technology has made it easier for customers to get what they want, but it has also raised the bar for service. Can your loyalty program keep up?
If contextual commerce is about letting consumers buy products anywhere at any time—whether they're in a store or scrolling through social media in the backseat of a ride share—then contextual loyalty is its logical extension. Contextual loyalty means providing consumers personalized rewards and offers in the channels they prefer. It means fully understanding customers' in-the-moment needs and complementing their life stage and customer journey.
Step 1: Personalize Your Program
Nearly 70% of cardholders value bundled benefits that align with their priorities, and a Mastercard-sponsored Harvard Business Review study found that personalized product offerings increased ROI by 38%. A busy executive might prefer airlines miles or travel offers, while rewards points for buying exercise equipment may appeal to a fitness enthusiast. By focusing on personalized rewards, you're signaling to customers that you're committed to maximizing value for them.
However, consumers' ever-changing priorities make personalization challenging. Milestones such as a new child or new home—or even something as simple as a new diet—can cause an abrupt shift in spending habits. That's why allowing customers to change their preferences over time drives longer term loyalty. Loyalty programs should either anticipate customers' needs or they should adapt with customers' changing habits.
Step 2: Meet the Consumer Where They Are
Because consumers live and shop in a world that is made smaller by technology, they expect their loyalty programs and credit cards to keep up as well. Loyalty programs need to meet the customer where they are, rather than trying to push them into existing interaction channels. It's not enough to have a digital option — you need to have a digital-first approach. For example, Pay With Rewards is a turnkey digital solution that gives cardholders the freedom to spend points like cash at the moment of purchase at millions of eligible locations. Digital solutions allow you to be ubiquitous but invisible—to seamlessly fit in to the customer's life without interrupting their experience.
Going global will also drive loyalty. Customers want to access perks not just in their regular routines, but also on business trips and vacations. Global card issuers need to provide a seamless rewards experience whether their customers are in big-box stores and boutiques back home or on ski slopes all over the world. Mastercard Traveler Rewards, for example, unlocks discounts at dozens of international retailers, driving increased engagement from cardholders while they are traveling.
Step 3: Invest Now
Companies that invest in contextual loyalty now will reap the rewards. By offering personalized benefits and simplifying discovery and redemption channels, card issuers will make customers forget they're even using technology and will instead rely on your program by default.
Keep in mind that technology is the critical behind-the-scenes linchpin that drives any personalization efforts at scale. Seventy percent of respondents from the Harvard Business Review and Mastercard study said that data analytics is the most critical technology they'll need to succeed with personalization efforts. Additionally, partnering with a proven loyalty technology platform will allow you to achieve scale, speed up your time-to-market, and quickly adapt as new innovations arrive. Leverage technology to translate your personalization initiatives into profit.
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