Hello there! Are you a loyal customer who enjoys collecting points and rewards from your favorite brands? Or perhaps you’re a business owner looking to improve your customer retention strategies? Either way, you might have noticed that the COVID-19 pandemic has affected the way loyalty rewards programs work. In this blog, we’ll explore the changes and challenges of loyalty programs in the age of COVID-19, and how businesses can adjust their strategies to stay relevant and loyal to their customers.

The Rise of Contactless Payment and Rewards 💳👋

One of the biggest changes brought on by the pandemic is the shift towards contactless payment and rewards systems. With social distancing measures in place, customers are less likely to handle cash or touch physical reward cards. As a result, more businesses are implementing digital and mobile payment options that offer safer and more convenient ways to earn and redeem loyalty rewards.

One example of this is the Starbucks Rewards program, which has seen a surge in mobile app usage and pre-ordering since the pandemic started. Customers can now order and pay for their drinks ahead of time, and earn stars for their purchases that can be redeemed for free drinks and food. This way, customers can avoid physical contact and still enjoy their favorite beverages while earning rewards.

A person paying with their smartphone at a store.

Adapting to Changing Customer Needs 🤝👥

Another challenge faced by loyalty programs during the pandemic is how to cater to changing customer needs. With many people staying home and shopping online, businesses need to find new ways to engage and reward their customers. One solution is to offer personalized rewards that are tailored to a customer’s preferences and shopping habits.

For example, fashion brand ASOS offers a loyalty program called ASOS A-List, which rewards customers with points for each purchase they make. However, unlike traditional rewards programs, ASOS A-List allows customers to choose which rewards they want to redeem, such as free delivery or discounts on future purchases. This not only gives customers more control over their rewards, but also encourages them to keep shopping with ASOS.

A screenshot of the ASOS A-List rewards program page.

Boosting Engagement with Gamification 🕹️🔥💥

Lastly, businesses can use gamification (the application of game-like elements to non-game contexts) to boost customer engagement with their loyalty programs. By adding fun challenges or activities that reward customers with points or prizes, businesses can make their loyalty programs more interactive and entertaining.

An example of this is the Sephora Beauty Insider program, which rewards customers with points that can be redeemed for exclusive beauty perks. Sephora also uses gamification to encourage customers to engage with their loyalty program through their “Rewards Bazaar,” which features limited-edition rewards that can only be redeemed for a limited time or through special challenges. By making it more exciting and competitive, Sephora’s loyalty program has become a popular way for customers to discover and try new beauty products.

A screenshot of the Sephora Rewards Bazaar page.

Conclusion 🎉

In conclusion, loyalty rewards programs have had to adapt and evolve in response to the COVID-19 pandemic. By implementing contactless payment and rewards, adapting to changing customer needs, and using gamification to boost engagement, businesses can continue to offer valuable rewards to their loyal customers. Whether you’re a customer or a business owner, these changes present opportunities to innovate and improve loyalty strategies. So let’s stay loyal, safe, and rewarded!

An image of a customer excitedly showing their phone with a loyalty rewards app open.