14 Customer Loyalty Trends to Follow in 2022

In today‘s ultra-competitive business landscape, customer loyalty is more important than ever. With countless options at their fingertips, consumers can easily jump ship to a competitor after a single sub-par experience. Meanwhile, the most successful brands are those that cultivate deep, lasting relationships with their customers.

Consider these eye-opening statistics:

• Loyal customers are 5x as likely to repurchase, 5x as likely to forgive, 4x as likely to refer, and 7x as likely to try a new offering. (Temkin Group)
• Increasing customer retention by just 5% boosts profits by 25% to 95%. (Bain & Company)
• 82% of companies agree that retention is cheaper than acquisition. (Invesp)

The takeaway is clear: Companies that prioritize customer loyalty gain a major advantage. And with the accelerating pace of digital transformation, that‘s only becoming more true.

So what does it take to build and sustain customer loyalty in 2022? Let‘s dive into 14 key trends that should be on every brand‘s radar.

Trend 1: Experience Reigns Supreme

In 2022, customer experience (CX) has overtaken price and product as the key brand differentiator. Over two-thirds of companies now compete primarily on the basis of CX – up from only 36% in 2010. (Gartner)

What does great CX entail? It‘s the sum of all interactions a customer has with your brand, across all touchpoints and channels. This includes everything from your website‘s ease of use to the friendliness of your customer service reps to the post-purchase support you provide.

Starbucks is a master of using CX to drive loyalty. Their wildly popular mobile app makes it a breeze for customers to order, pay, earn and redeem rewards. By removing friction from the coffee-buying process, Starbucks keeps their customers coming back daily.

Loyalty Tip: Map your end-to-end customer journey to identify CX improvement opportunities. Even small enhancements can yield big gains in satisfaction and loyalty.

Trend 2: Personalization Becomes Table Stakes

Gone are the days of one-size-fits-all loyalty programs. In an age of Spotify and Netflix, consumers expect deeply personalized experiences from the brands they patronize. 80% of customers are more likely to purchase from a company that offers personalized experiences. (Epsilon)

Nike is at the forefront of data-driven personalization. Their NikePlus membership program gathers extensive data on customers‘ sports, shoe sizes, purchase history and more. Nike uses this data to provide ultra-targeted product recommendations, content and offers that keep members engaged.

Loyalty Tip: Leverage your customer data platform (CDP) to create granular segments and power 1:1 personalization across your loyalty messaging and offerings.

Trend 3: Omnichannel Loyalty Is a Must

The lines between in-store and online shopping have blurred. Customers now expect a seamless, integrated loyalty experience across all channels. 75% of consumers expect consistent experiences wherever they engage (e.g., website, social media, mobile, in person). (Salesforce)

Sephora‘s Beauty Insider program sets the gold standard for omnichannel loyalty. Whether a member shops in-store, online or in-app, their points are automatically credited. Rewards can be redeemed anywhere, and the app provides a digital loyalty card for in-store access.

Loyalty Tip: Break down data silos to create a unified view of your loyalty members across all touchpoints. Use this 360-degree understanding to provide cross-channel perks and experiences.

Trend 4: Paid Loyalty Takes Off

Traditionally, loyalty programs have been free to join. But in a twist, more brands are launching paid loyalty tiers that offer enhanced benefits for a recurring fee. For example, lululemon charges $128/year for its upgraded membership, which includes free shipping, exclusive products and events.

These VIP tiers create an even more loyal segment of your best customers. 62% of consumers say they‘d consider joining a paid loyalty program if their favorite retailer offered one. (McKinsey) The key is ensuring that the value of the benefits far exceeds the membership cost.

Loyalty Tip: Survey your customers to assess their appetite for a paid loyalty offering. Test and learn with different fee tiers and benefit bundles to optimize your program.

Trend 5: Mobile Apps Become Mainstream

The smartphone is consumers‘ preferred tool for engaging with loyalty programs. Over half of loyalty memberships are now digital. (Bond) Brands are responding with dedicated loyalty apps that put earning and redeeming rewards at customers‘ fingertips 24/7.

Chipotle has seen massive success with its loyalty app. Introduced in 2019, it now boasts over 18 million members who can order ahead, rack up points and cash in for free food. Digital orders from loyalty members made up over 50% of Chipotle‘s Q2 2020 revenue.

Loyalty Tip: A loyalty app is table stakes for 2022 and beyond. Focus your app on delivering an intuitive user experience and valuable, exclusive offers that will drive repeat engagement.

Trend 6: Rewarding Non-Purchase Behaviors

Points for purchases will always be the core of loyalty programs. But forward-thinking brands are also finding ways to incentivize other high-value behaviors. These include writing reviews, participating in surveys, engaging with social posts and more.

Beauty brand Glossier has created a thriving referral program. For each successful referral, both the referrer and the new customer get $10 off. This turns loyal customers into brand advocates, helping Glossier reach new audiences while deepening existing relationships.

Loyalty Tip: Identify the non-purchase behaviors that matter most for your business objectives. Then build these into your loyalty ecosystem alongside transaction-based rewards.

Trend 7: Gamification Drives Participation

To stand out in a sea of bland loyalty programs, brands are using gamification to make earning rewards more fun and engaging. Think progress bars, badges, leaderboards and challenges that motivate members to level up. Over half of consumers say game mechanics would make them more likely to engage with a loyalty program. (KPMG)

Nike has mastered the art of gamification. Its NikeFuel program allows members to earn points for all their physical activities, not just workouts. Members can compete, share achievements and unlock special rewards. NikeFuel‘s success has helped the Nike Training Club app grow to 185 million members.

Loyalty Tip: Use gamification selectively to boost targeted behaviors like social sharing or purchase frequency. But avoid making your loyalty program feel like an arcade game.

Trend 8: Partnerships Expand Loyalty Value

No brand is an island. That‘s why so many companies are teaming up to offer expanded loyalty benefits to their collective customer bases. These symbiotic partnerships allow brands to pool their expertise and rewards to create more value for members.

American Express has long been the leader in loyalty partnerships. Eligible cardholders can earn points with the likes of Marriott and Hilton and transfer points to over a dozen airlines. These benefits make Amex a go-to card for travelers and keep members engaged across many aspects of their lives.

Loyalty Tip: Seek out complementary partners who share your customer base. Brainstorm how you can collaborate to enhance each other‘s loyalty proposition.

Trend 9: Corporate Social Responsibility Meets Loyalty

Consumers increasingly expect the brands they support to take a stand on social and environmental issues. 87% of consumers‘ purchase decisions are influenced by whether a company advocated for an issue they cared about. (Cone)

Some brands are responding by integrating corporate social responsibility (CSR) initiatives into their loyalty programs. When REI launched its REI Co-op membership, it pledged to donate $0.10 per transaction to the National Forest Foundation. In 3 years, members funded the planting of over 1 million trees.

Loyalty Tip: Survey your customers to understand which CSR causes resonate with them. Then build loyalty-based giving campaigns around those issues to forge deeper emotional connections.

Trend 10: AI Gets Smarter Than Ever

Artificial intelligence (AI) is a true game-changer for loyalty programs. It allows for unprecedented levels of personalization, prediction and automation at scale. By 2024, AI will enable over $100 billion in annual loyalty program revenue increases. (Bond)

Starbucks has been a trailblazer in AI-powered loyalty through its Deep Brew platform. Deep Brew crunches massive amounts of customer data to predict what offers an individual member will respond to. These insights also inform menu updates, store design and hiring needs.

Loyalty Tip: Lean on AI-based tools to unlock granular customer insights and surface next-best actions. But don‘t fully abdicate your loyalty strategy to the algorithms.

Trend 11: Instant Gratification Drives Results

We live in an on-demand world of same-day delivery and at-your-fingertips entertainment. Loyalty programs must keep pace with consumers‘ desire for instant gratification. 79% of consumers look for instant discounts or offers when shopping online. (Inmar Intelligence)

Amazon Prime is the ultimate manifestation of instant loyalty benefits. For $119/year, members get unlimited free 1-2 day shipping on over 100 million items. This perk has been wildly successful in driving loyalty: Prime members spend $1,400 per year on average, compared to $600 for non-members. (Consumer Intelligence Research Partners)

Loyalty Tip: Make at least a portion of your rewards portfolio redeemable right away. Use bonus perks and first-purchase incentives to deliver gratification from day one.

Trend 12: Social Media Builds Community

One benefit of loyalty programs is that they allow brands to identify and communicate with their best customers. Increasingly, that communication is happening on social media. 64% of brands now use social media for customer retention. (Hootsuite)

Sephora has built a vibrant social community for its Beauty Insider members. The Beauty Insider Community acts as an online forum where members can ask questions, post reviews and share tips. This user-generated content (UGC) fosters peer-to-peer connections while generating priceless insights and advocacy for Sephora.

Loyalty Tip: Use a branded hashtag to mobilize your loyalty members as social media ambassadors. Encourage UGC and reward members for helpful contributions.

Trend 13: Top-Tier Perks Get More Exclusive

While some loyalty perks are designed for mass appeal, others are reserved for VIP customers only. This exclusivity makes high spenders feel truly special and motivates lower tiers to level up. 60% of loyalty members say their program experience is improved by having a tiered system. (Bond)

Nordstrom‘s Nordy Club exemplifies the power of tiered loyalty done right. While all members earn points, the higher tiers (Influencer and Ambassador) get exclusive perks like spa days, free 2-day shipping and first dibs on new product launches. This model has helped Nordstrom drive 53% of sales from only 20% of customers.

Loyalty Tip: Create a tiered program with clear spending thresholds and escalating benefits. Actively market the higher tiers to create stickiness and aspiration.

Trend 14: Simplicity Earns Engagement

While loyalty program sophistication is on the rise, that doesn‘t mean the user experience has to be complicated. In fact, the opposite is true. 70% of consumers say they‘d be more likely to join a loyalty program if it were easy to understand. (Code Broker)

CVS‘s ExtraCare program boasts 62 million active members thanks in large part to its dead-simple premise. Members get 2% back on every purchase, plus special discounts of up to 50% on featured items. No points to calculate, no tiers to navigate, no expiration dates. That clarity has helped ExtraCare drive 80% of CVS‘s total sales.

Loyalty Tip: Distill your program down to its simplest essence: The actions members take and the benefits they get. Strive for a frictionless experience from sign-up through redemption.

Implementing a Cutting-Edge Loyalty Strategy

As these 14 trends illustrate, expectations for loyalty programs are sky-high and constantly evolving. To keep pace, brands need to rethink their traditional loyalty playbooks. Here are 3 steps to get started:

1. Audit your current loyalty experience. Use customer surveys and feedback to pinpoint your program‘s strengths, weaknesses and opportunities through the lens of these key trends.

2. Prioritize the right trends for your audience. Not every trend will be relevant for every brand. Use your customer insights to zero in on the trends that will create the most delight and value for your unique audience.

3. Take a test-and-learn approach. Select one or two trends to build into your loyalty experience as a minimum viable product (MVP). Track the impact on KPIs and gather feedback. Scale what works and apply lessons learned to your next iterations.

Above all, remember that loyalty is a two-way street. It‘s not just about driving more purchases. It‘s about building a genuine relationship with customers by demonstrating that you understand and appreciate them. When you lead with that customer-centric mindset, the ROI will follow.

In a world where switching brands has never been easier, fostering customer loyalty is both more difficult and more critical than ever. The brands that thrive in the coming years will be those that stay ahead of the curve in adapting their loyalty strategies to the latest trends and technologies.

From hyper-personalization and omnichannel experiences to exclusive benefits and instant rewards, customers‘ expectations for loyalty programs are soaring. Meanwhile, AI and other emerging tech are enabling unprecedented innovation and agility.

To compete in this new era of loyalty, brands must put the customer at the center of everything they do. That means harnessing data to understand consumers‘ unique needs and preferences, and then crafting a seamless end-to-end loyalty experience that exceeds those expectations.

The 14 trends we‘ve highlighted provide a roadmap for building a best-in-class loyalty program. But they‘re just the starting point. The most successful brands will be those that continually experiment, learn and evolve in response to their customers‘ changing behaviors and desires.

Loyalty has never been more important – or more exciting. Is your brand ready to embrace the cutting edge and turn your customers into lifelong fans? The future of your business may depend on it.