2024 will bring uncertainty – investing in loyalty will be key to growth
We are heading into the Year of Loyalty, where businesses that invest in their employees and customers will give themselves a platform for success.
Predicting what 2024 will bring is challenging – with the prospect of a General Election and the constantly shifting sands of economic policy have created a much more uncertain future.
Last year, we knew everyone was in for a rough ride and so it proved, with businesses and employees wrestling with rising costs and interest rates. But while 2024 may not be as clearly-defined, what is certain is that loyalty will be the most influential driver.
The experience of the last 12 months – and in some ways the last three years – has created in consumers and workers a greater sense of their own value – to themselves, the places they work and the businesses and services they use.
The businesses that succeed in 2024 will be the ones that recognise how to build and maintain loyalty in a more meaningful way.
Out with the old – sales and loyalty are changing
From a consumer standpoint, traditional loyalty programmes no longer have the influence they once did. Already we have seen the biggest supermarkets adjust their loyalty programmes so that rather than focusing on accumulating points, members get instant discounts at the checkout instead.
Price remains a strong influence, but that is falling. According to data from customer experience managers Qualtrics, 61% of consumers base their loyalty to a brand on the quality of the service or product and 47% on the customer service support. Only 43% base it on low prices. So the impact of sales – with the possible exception of Black Friday – is diminishing in customers’ eyes.
These significant shifts in consumer behaviour will filter through to all businesses in 2024. Consumers post-Covid have an increasing need to feel looked out for and protected from the unexpected.
Businesses that can offer wraparound care with tangible benefits – service packages for major expenses for example – will see real growth in 2024. But those packages need to offer real value at the right price. Never have consumers been more aware of what they are actually getting when they sign up for value-added services.
Make it too complex, too expensive or pay lip-service to the problem you’re claiming to protect them against and it could be very damaging to your business.
Retention is still king for employers
We’ve seen a lot of recent articles preaching retention for 2024 and we agree, retention is vital. We actually had this as a key point for 2023 and the message has not changed.
Recruitment remains challenging for business, with significant numbers of unfilled vacancies across the economy.
Latest figures from the Office of National Statistics show almost a million unfilled vacancies in the UK right now. So it’s obvious that retaining employees is vital to growth.
Love2shop’s own Employee Value Report, published in September, told us that despite this need to retain staff, 4.4 million UK workers are considering leaving their job as they feel undervalued, with 1.5 million ready to leave without a new role to go to.
When asked why, 41% said they felt their contribution to the business was not acknowledged, 32% cited poor pay and benefits and 29% believed that loyalty is a one-way street and they did not matter to their employer.
That indicates serious disillusionment with employers – and that could become a crisis in 2024.
What’s frustrating is that the UK workforce is not asking employers for a lot. We also found that 90% would feel more valued by receiving a spontaneous gift card at work but 47% said their employer never gifts them anything.
Small regular shows of appreciation beyond the pay packet in 2024 are the key to employee retention. Employee discount schemes can be one solution, but many are complex and not valued by employees.
Consider offering employees discounts they can apply instantly. Everyday Benefits from Love2shop for example is a card employees pre-load funds onto at a 7.5% discount. So for example, if they load £100 on, they only pay £92.50. They then have £100 on the card to spend at more than 140 partner retailers.
Businesses that get it right will be in a strong position when the economy begins to truly grow again.
AI will find its place
This year AI has been the buzzword in business and that is unlikely to stop. However, we believe it will settle down and find its place in the ecosystem in 2024.
The rapid explosion of artificial intelligence in 2023 made it seem a bit like the Wild West, with even Google struggling to keep up!
But 2024 will see more businesses employ AI strategically. Used as a support tool to improve customer experience alongside human interaction it can help businesses manage more enquiries and ease some of the teething troubles growing businesses sometimes have with fulfilment.
According to global research firm Forrester, AI will be used more surgically, particularly by digital businesses, to support customer service delivery, however it also predicts that 40% of buyers aged 25-44 will rate person-to-person interactions as their most meaningful – so if customer loyalty is your goal, invest in people.
Spreading API-ness
APIs are nothing new, but we will see them deployed more by businesses to enhance their user experience.
Businesses working with partners to deliver key employee benefits or customer rewards will move away from engineering their own in-house solutions and instead will expect suppliers to provide seamless APIs that help them to deliver global-quality brand engagement and user experience within their budget.
Critically, the most important investments businesses will make in 2024 will be around experience – the workplace experience, the customer experience, the online experience.
Integrating Love2shop into your reward and recognition systems is a great way to enhance those experiences – opening up a mammoth catalogue of brands for recipients to spend with.
You can find details of how our API integration offers safe, secure real-time integration here: https://business.love2shop.co.uk/api-for-gift-cards.
Whatever happens 2024 will be a year of significant change for business. Attitudes and behaviours may be shifting but by using new insights to focus on what’s really important businesses will thrive.
The primary focus, as ever is on quality of products and services. But invest in your workforce and your customers. Create an eco-system around your brand that people want to engage with and be a part of.
That will make your business resilient, agile and ensure you’re ready to grow whatever surprises 2024 has in store.
61% of retailers cite customer retention as their biggest challenge (Retail Systems Research). In fact, it’s been estimated that companies could increase their profits by nearly 50% by retaining a mere 5% more of their customers.
What you’re ultimately trying to create through your customer loyalty programmes is advocates. By advocates, we mean people who will speak on behalf of your brand.
It’s not possible to give you a step-by-step breakdown of how to build and implement a loyalty programme. Sight-unseen, we don’t know all the factors involved.
Data has changed how every business works, and loyalty programmes are no exception. Analysis plays a vital role in which customers you will choose to target most aggressively, how best to reach and engage them, and how to refine your loyalty programme in the future.
Constant communication is vital to maintaining engagement in customer loyalty schemes.
When we go to events, webinars or seminars about loyalty, a common refrain we hear is “loyalty is about more than points and prizes”. And they’re right.
Patience is a virtue, but it’s not work putting your customers’ to the test. Companies like Amazon have set a near-impossible bar to meet for immediacy and convenience for the public.
When your customers have problems and frustrations, then expect to be able to get in touch and get your help. Not only does that help need to be forthcoming, it has to tick the right boxes. Loyal customers are looking for customer service that demonstrates:
Consumers increasingly make 
Your reputation on review sites like Trustpilot has become as important as word-of-mouth in today’s world. Taking control of that reputation, and having a proactive presence on those review destinations, is vital. We wrote more here on how you can 
Understanding that a customer has made their choice, and allowing it to happen on the best terms possible makes it easier for them to come back.
When customers are leaving, be sure to ask why. If the problem is inside your control, and affecting a sufficient number of people, it has to be fixed. Get back in touch with affected customers once the issue is resolved to let them know.
Sometimes, your service fails beneath where customers think your service level should be. This could be down to a variety of factors, some of them inside and outside of your control.
The findings of the study we cited above and others, unfortunately, found that while they could find evidence of the paradox working, it’s not something you should bank on.
Too often, companies scramble to offer effusive apologise and prostrate themselves on the good will of their customers. They believe that one mistake, even if they recover from it, should be treated as fatal.
Your company needs dissatisfied customers talking to your recovery staff. This is to demonstrate as early as possible that you’re in control, that you can make the problem right, and that you can make repair the problem.
