Winning in loyalty
August 2, 2022 | Infographic
By Lidiya Chapple, Oren Eizenman, and Jamie Wilkie
3 out of 4 members of top-performing loyalty programs changed their behavior to generate more value for businesses
Why loyalty matters
64%
are more likely to purchase more frequently
31%
are more willing to pay a higher price to stay with a brand
50%
are more likely to recommend to others
35%
are more likely to choose brand over competitors
Source: McKinsey & Company Loyalty Survey, McKinsey, 2021
Source: McKinsey & Company Loyalty Survey, McKinsey, 2021
I have chosen the company over other options because I am a member of its loyalty program
Gap,
% points
20
11
46
26
44
33
2017
2022
20
16
I have increased my frequency of purchases because I am a member of its loyalty program
40
20
41
45
2017
2022
14
11
I have recommended the company to others because I am a member of its loyalty program
26
12
33
45
2017
2022
In the past five years, lagging loyalty programs have narrowed their gap to best-in-class by
in their ability to drive consumer choice
9%
Behaviors changed due to loyalty-program membership, % of respondents
Companies with top-quartile loyalty programs
Companies with bottom-quartile programs
The current state of loyalty: the loyalty gap between the best and the rest is shrinking.
More personalized
More scaled
New monetizable businesses built on top of loyalty
Build new sources of value—services, formats, and journeys—with assets created by loyalty (eg, data, paid/subscription programs, retail media network).
Expanded loyalty value proposition with internal and external assets
Connect company’s own services, offerings and external partnerships in one integrated experience to fulfill customers’ cross-sectoral needs.
Interconnected
designs with customer-level targeting
Introduce advanced features
(eg, surprise and delight, paid) and unlock micro-segmentation / customer-level targeting.
Base functionality
and targeting
Establish loyalty program with basic functionality (eg, earn and burn, offers) with the ability to personalize at a high level.
The loyalty evolution:
from program to platform
More value
6.
Data usage
Maximize the usage of loyalty data internally to accelerate business priorities across the organization, including CRM, marketing, pricing, promo, products, services, and customer service.
5.
Economics
Obsess over program economics, maximize the gap between cost of running loyalty programs and customers’ perceived value, and explore how to build additional revenue streams on top of loyalty assets.
4.
Ecosystem
Harness a network of internal and external assets (eg, partnerships) in one integrated experience to deliver an unbeatable, cross-sectoral value proposition for the customer.
3.
Personalization
Unlock tailored experiences, offers, and customer journeys across touchpoints through advanced data and analytics.
2.
Engagement
Turbocharge customer engagement beyond transactions through gamified design, signature experiences, and a portfolio of compelling benefits.
1.
Target
Deliver business objectives by focusing on specific customer behaviors to drive incrementality among high-value, targeted customer segments.
Considerations to foster loyalty
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ABOUT THE AUTHOR(S)
Lidiya Chapple is an associate partner in McKinsey's Atlanta office, Oren Eizenman is a partner in the Toronto office, and Jamie Wilkie is a partner in the Boston office.
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