The end of loyalty as we know it?

How can we create Rewards 3.0 and tap into the next layer of engagement, asks Related's Rabih Farhat

My choice of hotels is influenced by several factors: loyalty programme generosity, staff friendliness, cleanliness, convenience and price.

This time my experience was taken to a whole new level! I was prompted to download the hotel’s mobile app; I hesitated at the beginning not wanting to go through another app fatigue, and to avoid being bombarded with promotions and notifications.

That day, and 12 hrs before my arrival time, I received a notification on my newly downloaded app, “Dear Rabih, as an Elite customer you can now check in your room and get your digital key card without going through the front office”. I rushed to check in and get hold of my digital access card.

Next day I land at the airport and receive a welcome message from my hotel, informing me that the room is ready. It felt great to skip the long waiting lines on check-in.

An extra perk was seeing that I was automatically upgraded to a higher loyalty status. That was not only delightful, but it also reminded me of the power technology has to drastically enhance customer experience in sectors that were built around human service.

Creating moments of happiness is key to building an exceptional customer journey, yet when coupled with the right technology, the experience and satisfaction are amplified and that’s particularly why this hotel has won me over.

Middle East

Today the Middle East is at the forefront of global digital transformation initiatives. While Dubai leads as one of the world’s top 10 metaverse economies, as well as a global hub for the metaverse community, Saudi Arabia plans to invest more than $6.4 billion in future technologies, including esports and gaming.

Moreover, this market is witnessing an unprecedented rise in investments in loyalty programme upgrades. In Saudi Arabia alone, 65 per cent of banks have revamped and upgraded their loyalty and rewards programmes in the last year.

Brands are doing a deep dive analysis into customer data, from transaction and behaviour to prediction using Machine Learning and AI tools to be more relevant and personalised to meet the new customer needs.

Owning such data, coupled with the fostering of new technology, would allow brands to gamify experiences and reach web3.0 and the metaverse.

We’re not robots

For me, there’s no question about it; humans and machines are evolving to work together, and the results will be remarkable: improved quality of service and optimised personalisation and customer loyalty through frictionless and preventive experiences.

Starbucks, for example, applies the Digital Flywheel programme, which merges digital and physical customer interactions and centers them around rewards, personalisation, payments and orders.

Each interaction with the end user generates qualitative and quantitative information and data to provide insights on where and how to create new value and turn in the next round of innovation.

That’s specifically how the brand is able to drive so much value from a relatively small portion of customers, 13.3 million active reward customers compared to a total of approximately 75 unique customer visits to their stores each month.

Rewards 3.0

A recent survey of more than 200K loyalty and rewards programme members for Related, showed that more than 85 per cent of members are looking for fun, instant and engaging ways to benefit from exclusive rewards and experiences with their brand.

Yet, more than 70 per cent of businesses want to create new revenue streams outside the legacy business, appeal to a younger target audience and want immersion into web3, specifically with the internet moving into a cookie-less future and Web2 solutions quickly becoming ineffective.

Rewards 3.0, as I like to call them, will help both brands and consumers achieve these objectives.

How can we create Rewards 3.0 and tap into the next layer of engagement infrastructure? This is where NFT’s kick in, the latest twist to customer engagement and a favorite crowd-pleaser.

The beauty of non-fungible tokens is that consumers will own a one-of-a-kind digital asset with real life utility that appreciates in value with time, giving the consumer a sense of exclusivity and status.

Brands that capitalise on this opportunity will have a better position to immerse organically into web3. They will also innovate limitlessly with their rewards offering and tap into new levels of customer loyalty by building strong bonds with their community.

While today’s consumers are immersed in a tech-driven world, and tech being the main driver of successful loyalty programs, its early adoption will allow brands to be part of the new future of rewards.

By Rabih Farhat, Founder & Managing Partner at Related