Loyalty programmes have gained a reputation for driving returns and increasing market share. However, for such initiatives to truly drive brand recognition and customer engagement, they need to go beyond discount-driven rewards.

Consumers — particularly millennials — are actively seeking personalisation and imaginative engagement, and are quite prepared to pay a premium for such services. Seventy-nine per cent of millennials and Gen Xers want a strong loyalty programme, according to the big-data analytics company IRI, while the numbers register at 74 per cent for baby boomers and 66 per cent among seniors.

According to marketing firm HelloWorld’s 2017 Loyalty Barometer Report, 81 per cent of millennials favour loyalty programmes that go beyond offering rewards — indicating opportunities for more innovative approaches in future programmes. In order for business to deliver relevant and effective loyalty programmes, this fresh outlook will be key.

Digital customer engagement, AI and machine learning provide enterprises with a powerful methodology to facilitate the delivery of specific and personalised services. These solutions allow tailored offerings that address the needs of specific individual customers over the entire retail experience.

In addition, mobility and ubiquitous connectivity make true omni-channel engagement possible — driving loyalty programmes that thrive on high customer expectations.

Given its high millennial population and penetration of digital technologies, the UAE is a particularly fertile market for this approach. Truly future-ready loyalty programmes — those that fully exploit the possibilities of expanding digital footprints — are beginning to find their feet.

Existing programmes- such as Shukran, MyClub and Privilege cards — have been implemented with considerable success. Digital tech enhanced loyalty programmes — that deliver true multi-platform personalisation — stand to disrupt markets and achieve transformative results in customer acquisition.

Given the lowered resistance of customers to sharing personal data and purchasing patterns, the expectation is that personalised programmes will be the new standard and technology will be the central facilitator of delivery.

The standout loyalty programmes have focused on deepening the quality of engagement between businesses and customers. Creating communities around products and services is an excellent way to do this.

Not only do such initiatives reinforce loyalty through participative engagement, they also allow enterprises a means to gain real-time feedback that is a lot more forthcoming than that solicited through surveys, which are often perceived to be intrusive and limited in the data gathered.

The French cosmetics multinational Sephora’s “Beauty Insider” loyalty programme is a case in point. Currently with more than 10 million members, the extremely active social media engagement of the multi-tiered programme has contributed significantly to its success.

Creating a bustling platform for their customer’s feedback and interaction has been a defining factor in the growth in market share and customer lifetime value, for the business.

The advent of social media actually reflects a deepening in the engagement. In order to remain relevant and to maximise impact, loyalty programmes — and customer engagement in general — need to reflect this reality. Evolution in customer behaviour means that personalised, interactive and value-added programmes are here to stay.

Emerging technologies will only accentuate this trend even further. Loyalty programmes, those that set businesses apart from their competitors, will have far greater opportunity to introduce redefined standards of service.

With a little attention to detail and through the creation of innovative engagement, enterprises will be able reap significant rewards, even as they ostensibly appear to offer them to their customers.

- Sajid Azmi is the CEO of Yegertek.