Major brands to boost investment in loyalty programmes

Research conducted by Apadmi indicates a significant trend among major brands to increase investment in customer loyalty programmes over the next year.

Findings from the second annual Digital Customer Loyalty Report show 67% of businesses anticipate increasing investment in digital loyalty initiatives. The report, based on a survey involving over 150 mobile, loyalty, CRM, and product experts from various sectors, highlights the growing importance of digital loyalty in enhancing customer engagement and retention.

According to the survey, 81% of respondents acknowledged the importance of loyalty as central to their business strategies. A key challenge addressed by digital loyalty programmes is improving the frequency of customer purchases. Additionally, 36% of the businesses surveyed are developing a digital loyalty programme, and 35% have already implemented one.

The report reveals that mobile applications are the preferred channel for executing customer loyalty strategies, with 24% of respondents regarding apps as the most responsive CRM channel. Brands indicated that mobile apps offer a personalised and cost-effective way to reach customers, with 40% of respondents prioritising these functions in their loyalty programmes.

Despite the emphasis on personalisation, 25% of respondents admitted to either implementing only basic personalisation or none at all, indicating room for improvement. However, there is a 10% increase in businesses intending to enhance personalisation efforts compared to last year.

Exclusive offers have emerged as the most popular future investment for loyalty strategies, with interest climbing to 49%, compared to 40% the previous year. Conversely, paid membership and scan-and-go tactics have decreased in popularity.

Challenges such as budget constraints, unclear strategies, prioritisation of other business areas, and a lack of internal expertise were identified as barriers to implementing loyalty programmes robustly. To overcome these, brands are encouraged to demonstrate quick value with initiatives like proof of concepts and user research testing.

Jake Sargent, Group Marketing Director at Apadmi, remarked: "Businesses across all sectors are feeling increasing pressure to acquire, engage and retain customers in increasingly competitive markets. Rising living costs for customers and business costs for brands means retaining and engaging loyal customers is essential to safeguarding retention and revenue, with the need to create more efficient and effective loyalty programmes and experiences greater than ever."

Sargent further emphasised: "Our research has highlighted how digital is shaping the world of loyalty, providing a view on the impact these experiences, particularly mobile, are having on loyalty. An increased focus on personalisation, product and programmes to drive customer and business value is what we're likely to see more of in 2025."

Emma Collins, Head of Loyalty and Engagement at Poundland, commented on the advantages of a mobile-first approach: "We had to work really hard to lay the groundwork for our new programme, Poundland Perks. That meant getting buy-in from all internal departments, including our fantastic stores - championing the results of our invaluable testing and learning. Loyalty is about finding a way to create insight, increase personalisation, drive footfall and invite conversations. And the best channel to do all of that at scale is digital, which is why we went mobile-first."

Apadmi, headquartered in Manchester, develops digital products for major brands in the UK, including projects for Asda, Poundland, and the BBC, among others. The company's research provides valuable insights into the evolving landscape of digital customer loyalty strategies and the increasing role of mobile platforms.