The power of consumer loyalty: Tactics for success has been saved
The power of consumer loyalty: Tactics for success
Maximizing loyalty program spend amid uncertainty
What can the right consumer loyalty tactics do for companies in today’s uncertain economic environment? Discover the many ways to keep and grow share of wallet with both new and existing customers through the power of loyalty.
Across the United States, forces impacting consumer spend are at play, ranging from pent-up demand stemming from COVID-19 to pressures from inflation. These forces present consumer-facing companies with a challenge and opportunity—how can companies maintain current share of wallet but also capture more during these uncertain economic times? Loyalty programs offer businesses a mechanism to address these scenarios head on.
Coming out of COVID-19, consumer spending patterns in the United States have continued to evolve in the wake of inflationary pressures, rising interest rates, supply chain disruption, and slowing economic growth.1 However, the signals we see today do not mirror the pre-recessionary signals of the past. Coming into 2022, consumers had more cash on hand, $4.2 trillion in total, than at the start of the pandemic.2 Extra savings, combined with pent-up demand and inflation, continue to impact consumer spending patterns, although not all sectors are feeling the same impact. While inflation is causing some sectors to compete more for price-sensitive consumers, others are continuing to benefit from the post-COVID boom.
As the impact of these forces on consumer demand continues to take shape, current conditions may prompt consumers to reexamine their spending habits and brand loyalty. Such changes in spending habits put share of wallet up for grabs—presenting companies with the risk of losing share from existing consumers, as well as the opportunity to capture share of wallet from new consumers. Implementing the right tactics in consumer loyalty programs can be an effective mechanism to address these scenarios by increasing consumer loyalty program spend: 69% of consumers spend more with retailers and brands when they are a member of their loyalty program.3 So, what tactics can consumer-facing companies employ through their loyalty programs to maintain and capture new share of wallet in the current economic environment?
Maintaining and growing share of wallet with existing consumers through loyalty programs
As consumers carefully consider where and how much to spend on their next purchase, retaining valuable loyalty members should remain a top priority for consumer-facing companies. Two tactics in particular stand out, given the current economic environment:
Leveraging loyalty to capture share of wallet with new consumers
While some consumers are shopping around for better value propositions due to tightened spending, or looking to splurge for their next big purchase, consumer-facing companies can leverage their loyalty programs to capture potential spend from new consumers.
While the tactics outlined above can be especially powerful given the shifting patterns of consumer spending, every company must determine the right features to offer based on its loyalty ambition and the desired behaviors it wishes to drive. Interested in exploring which of these consumer loyalty tactics could be right for your program? Let’s connect.
1 Stephen Rogers, Leon Pieters, and Anthony Waelter, “The shape of consumer spending,” Deloitte Insights, August 8, 2022.
2 Alexandre Tanzi, “Americans added $4.2 trillion in pandemic savings skewed to rich,” Bloomberg, March 30, 2022.
3 Deloitte Consumer Loyalty Survey, 2022.
4 In a recent Deloitte survey of loyalty consumers, we found price and value to the be the No. 1 factor in determining consumer loyalty (Deloitte Consumer Loyalty Survey, 2022).
5 Jeffrey M. Jones, “Inflation now causing hardship for majority in US,” Gallup, September 7, 2022
6 European Supermarket Magazine, “E.Leclerc launches ‘anti-inflation shield’,” May 6, 2022.
7 Chris Cracchiolo, “Walmart+ members can now save more with Walmart Rewards,” Walmart, August 24, 2022.
8 Personalization leaders see a 1.5X greater increase in revenue per customer and loyalty metrics compared to brands with low personalization maturity (Embrace Meaningful Personalization to Maximize Growth | Deloitte Digital, July 2022).
9 Deloitte Consumer Loyalty Program Assessment, 2021.
10 AMC Stubs, Discount Tuesdays, accessed January 11, 2023.
11 Deloitte Consumer Loyalty Survey, 2022.
12 “Program simplicity and ease of use” was rated as the second most important loyalty program attribute in a recent Deloitte survey, with 84% of consumers rating the attribute important (Deloitte Consumer Loyalty Survey, 2022).
The authors would like to thank Ali Daily and Lauren Stefenson for their collaboration on this piece.
Annual survey results on loyalty program preferences
Serving up new opportunities to build customer loyalty