Since 2020, businesses have had faced uncertainty and try to quickly adapt with the pandemic to stay in the market and cater the shift in customer behavior. And 2023 will be another year of uncertainty too with economic downturn and geopolitical tension on the horizon.
The continued macroeconomic exhaustion will naturally scare and distract businesses into tighten their spending. But smart business leaders will persevere through distractions and remaining focused on their long-term business’ goals which include better customer loyalty.
Despite this, there remain opportunities for brands to offer more meaningful interaction to strengthen their relationships with consumers through various initiatives. Customer loyalty program will remain one of successful initiatives in achieving positive outcomes amid the uncertainty in 2023.
Based on the insights of various sources and experts, we have put together the following predictions for customer loyalty trends in 2023.
1. Shifts in consumer spending
In 2022, consumers engage in exuberant spending and near the end year they become more caution in spending in the face of economic gloom. But in 2023, consumers will gravitate towards brands that deliver high value to them.
To put it simply, consumers will still spend their money in 2023 but expect them to be more selective in their spending; seeking out more blended experiences of digital fluidity that similar to old habits before the pandemic. They will abandon brands that can’t stick up to the newly gained digital fluidity during the pandemic and convenience post-pandemic.
In the nutshell, understanding consumer behavior is fundamental for building better customer loyalty in 2023, especially in the face of economic turbulence.
2. Brands that prioritize emotional loyalty and value communication will excel
Today’s customers are internet-savvy and can access to an abundance of product options from their phones. So, providing good quality services or products is no longer enough to make a brand stand out. Given the abundance of brand options on the market, customers will become more attached to brands that shared same values as them.
Many brands have used influencers with aligned values as theirs to build emotional loyalty to the like-minded consumers. For some brands, this will be expressed in product packaging, like green or eco-friendly packaging if their target consumers are environmentally conscious.
And brands who communicate their values directly to their customers through various initiatives will help customers feel a sense of shared values with the brand.
In the nutshell, when a customer feel connected to the brand, that emotional bond will foster loyalty that can turn casual buyers into long-term supporters.
3. Loyalty partnerships will become more crucial
It is expected that customers will have higher expectations for brands, especially in today's economy, for more relevant rewards and benefits. However, not all brands are capable of meeting these expectations.
That’s where loyalty partnerships are necessary. It can bring more value to your own loyal customers as well as reach new audiences.
More brands are predicted to embrace loyalty partnership for their own loyalty programs to enhance brand loyalty and boost better retention by becoming more integrated into members' daily lives.
In order to achieve success in this type of partnerships, brands should seek out partners who share their values, have reliable data, and can complement the brand's strengths.
4. Analytics will be a key factor in the success of a loyalty program in 2023
As the economy struggles and inflation increases, brands will need to heavily rely on analytics to meet customer expectations and needs. Previously seen as a ‘nice-to-have’ feature, analytics will become a key factor in customer loyalty and retention and will differentiate successful brands from their competitors.
Strong analytics will be a fundamental part of a brand's strategy, helping them understand their business and customers as well as making the most of their resources by focusing on efforts that bring in the highest ROI.
With customers become more cautious about their spending due to economic circumstances, brands will need to rely on data and analytics to effectively show their value in customers' everyday lives and demonstrate how they can meet their needs. So that the customers will feel seen, heard, and understood which will strengthen relationships with the brands.
5. Personalization still the key factor and ethical data use will be more important than ever
With rapid advancements in personalization technology, brands will be able to customize digital interactions across entire customer journeys.
Customers increasingly expect these kind of seamless experiences that span across devices and channels and continue throughout their interactions with the brand. This requires brands to develop personalization programs that meet customer expectation.
These personalization initiatives are driven data, and the combination of personalization and loyalty will place a higher emphasis on data privacy.
In the coming year, businesses need to start adopting safer approach for data privacy, such as transparent terms-of-use, opt-out options, and the use of zero-party data
6. Consumers are turning to loyalty programs as inflation puts pressure on their finances
As economic uncertainty continues, loyalty programs become a vital tool for both brands and customers because they provide opportunities for both sides to show their support for one another.
Brands should establish renowned partnerships that can provide extra value, one-of-a-kind experiences, and new way to earn and burn the loyalty points, which can mutually protect and grow their customer bases.
Consumers who are most affected by the economy situation will change their buying behavior and leverage more loyalty program benefits, focusing their spending on brands that prioritize authenticity, personalized benefits, and demonstrate thoughtfulness. These emotional loyalty themes are enduring and will continue to benefit brands in the coming year.
So, how will you build customer loyalty in 2023?
Customer loyalty is essential for businesses to thrive in today's competitive market. In 2023, it will be especially important to have a strong loyalty program in place to weather any challenges that may arise. Tada is here to help you achieve success in this area.
Our game-changing platform is designed to help all industries and has proven to be effective for hundreds of clients. With Tada, you can trust that your customer loyalty program will be in good hands. If you want to build a strong foundation of customer loyalty in 2023, request our demo now to learn more about how we can help.