Marketers are facing a consumer landscape that is significantly different than the one just two years ago. Today’s inflationary pressures are influencing consumer preferences and expectations in every aspect of the customer experience. Loyalty programs are no exception. And because of this, relying on pre-pandemic loyalty strategies won’t be enough to meet customers’ rational and emotional needs.

So, the question is: how should brands adjust to shifting customer expectations? We surveyed consumers from across the U.S. for Merkle’s fifth annual Loyalty Barometer Report to hear what brands should bring to the table, what kind of rewards consumers want, and how brands can maintain loyalty in a volatile economy. Below are our top three insights into loyalty program expectations from the report.

Provide tangible value but don’t overlook emotional needs

It’s no surprise that 49% of consumers said that discounts on products are the main reason they participate in loyalty programs. It’s clear that brands need to provide tangible value as part of the loyalty value exchange, especially as consumers’ economic concerns remain at the forefront.

But while discounts through a loyalty program build trust with tangible incentives, they aren’t enough to maintain a long-term customer relationship on their own. Brands need to reinforce earned trust and strengthen long-term loyalty by building emotional connections throughout the entire customer experience through excellent customer service, effective support, and relevant messaging.

Reward preferences reflect today’s economic climate

Perhaps as a result of the state of the economy, in this year’s Loyalty Barometer, we saw a subtle shift in consumers’ mindsets showing higher preference for discounts and free products than in previous years. Surprise rewards are still relevant but less compelling as consumers want more immediate value from brands. But to keep your program from becoming too transactional and to inject fun into your loyalty experiences, consider using both chance-to-win prizes and surprise rewards as features in promotional campaigns to activate engagement with the program. With this strategy, you can test and learn what will drive desired loyalty behaviors.

It’s also important to note that different generations want different things from loyalty programs. Download our infographics to learn how you can interact with Gen Z, millennials, Gen X, and baby boomers in their own way.

Invest in promotion-based loyalty campaigns to retain customers in a volatile economy

You don’t need to overhaul your loyalty program to adjust to changing customer needs. Short-term, gamified, campaigns that we call promotions offer a way to engage with consumers and learn more about them at the same time. This is where chance-to-win features can come in to play. Once you draw loyalty members in with tangible offers that appeal to customers’ rational side, use chance-based promotions to create the emotional connection that consumers want with a brand. Winning customers’ hearts by building emotional loyalty is the key to maintaining and increasing customer retention during economic downturns.

Get the full picture

Dive deeper into how consumers feel about loyalty programs, brand experiences, and emerging approaches such as paid loyalty, values-based loyalty, and non-fungible tokens (NFTs) in our full report. Download the 2022 Loyalty Barometer Report for insights, inspiration, and loyalty must-haves for your brand experience.