Nurturing customer connections through loyalty and reward

In today’s competitive world, loyalty and reward programmes have emerged as powerful tools to foster customer loyalty, increase brand affinity, and drive repeat business. Here, Leonie Titshall, Founder and Director of Rapport Group explores what makes such programmes so successful, the key metrics you should be looking out for and future trends shaping the field.

What are some of the ways partnerships are being used to enhance customer loyalty programmes?

Rapport is focused on leveraging partnerships to deliver highly engaging marketing activities, loyalty and reward programmes. When it comes
to loyalty programmes, we utilise partnerships to either enhance our clients’ existing loyalty offerings or
to build a programme around
partner rewards.

By collaborating with partners, we can offer a broader range of rewards and benefits than what is typically available within our client’s own business. These can include access to exclusive products or services, enticing discounts, unforgettable experiences, or even co-branded offerings that bring together the best of both worlds.

Working with partners who possess content expertise is another way we enhance our customer experience. They bring valuable knowledge and skills to the table, enabling us to take our offerings to new heights.

We’ve looked at how our clients use programmes to redeem their loyalty rewards across multiple complementary brands or businesses. This not only expands their options for rewards but also creates a seamless and interconnected experience across different brands.

Collaborating with partners on joint marketing activities is another effective strategy. Together, we promote specific rewards or the overall loyalty offering, utilising partners’ own channels or sharing the cost of paid media and other activities such as events. It’s a win-win situation that amplifies the reach and impact of our initiatives.

Sharing data between partners can help us gain a deeper understanding of customer behaviours, preferences, and purchasing patterns. However, we are extremely cautious about when and how we utilise this data, ensuring that it aligns with our customers’ consent and privacy expectations.

Leonie Titshall.

What are some of the emerging trends you see in the reward and loyalty space that companies should be aware of? 

There are several emerging trends that have been on marketers’ radars for a while but are now gaining significant traction within loyalty programmes, particularly overseas.

One such trend is the implementation of gamification in loyalty programmes, which is becoming easier due to technological advancements. Gamification can include elements like challenges, leaderboards, interactive features, and rewards for engagement.

Another trend is the offering of unique experiences as rewards. These can range from exclusive events and behind-the-scenes access to upgraded privileges and personalised interactions. Partnerships play a crucial role in sourcing or co-creating these extraordinary experiences.

Subscription-based loyalty programmes are also rising in popularity. These provide businesses with recurring revenue streams and allow them to offer perks, early access to products and services, or curated content to highly valued customers.

Automation and artificial intelligence (AI) are increasingly utilised to deliver more tailored experiences and rewards to customers in real-time. The potential of leveraging AI to provide personalised experiences and communications is tremendously exciting. 

Customers now have higher expectations regarding social responsibility and environmental sustainability, and as a result considered in loyalty offerings. Brands can demonstrate their commitment to these values through partnerships with non-profit organisations, contributions to charitable causes, and the provision of eco-friendly rewards.

What key metrics or indicators should companies consider when evaluating the success of their partnership and loyalty initiatives? 

The choice of metrics and indicators will depend on your business objectives, industry, and the nature of your partnerships. It’s important for your metrics to align with your business challenges and goals.

A great starting point is to identify the desired business outcomes you are aiming for. These may include metrics such as customer acquisition, retention rates, engagement levels, revenue generated, or customer lifetime value.

It’s also valuable to assess the number of people taking desirable actions. These actions can encompass increased programme sign-ups, marketing permissions obtained, and purchases made. Additionally, consider desirable engagement activities such as website or app visits, social media interactions, and email opens.

Measuring partner and reward performance is essential for continuously improving your activities. This involves tracking the number of people interacting with and redeeming rewards. Customer feedback is crucial in this regard, whether obtained through surveys, reviews, or assessing positive versus negative reactions.

We also recommend examining the return on investment (ROI) from two perspectives. Firstly, compare the cost to the business against the revenue generated or the value derived from your customers. Secondly, evaluate the value of the rewards provided to customers in relation to the cost of your product or service for the customer, or the cost to the business.

When establishing key metrics and targets, it’s important to exercise caution. Ensure that you have the necessary tools and capabilities to measure your metrics effectively. Familiarise yourself with benchmarks before commencing your loyalty programmes, as they can have indirect impacts even on customers who do not actively engage with them. Avoid setting yourself up for failure by relying solely on a loyalty programme to remedy underlying issues with your sales process or customer service.

Finally, if you are using partnerships in your loyalty programmes, make sure you are considering the metrics and goals of your partner. In order to continue to recruit and engage partners, you need to deliver on what they need as well. We recommend making sure you collaborate with them to understand their goals, what they’ll measure and what you can report to them. 

How can companies effectively leverage data analytics to optimise their partnership marketing efforts and improve the effectiveness of the programmes? 

To improve business outcomes, it is crucial to establish robust mechanisms for consolidating loyalty data with other customer data points. This integration lets you derive valuable insights from the generated data, leading to personalised communications, more effective cross-selling or upselling, and enhanced customer service.

Remember, data is only valuable if it provides actionable insights. Therefore, ensure that you have the necessary resources and tools to effectively analyse the activity data. This analysis should aid in segmenting customer groups, constructing comprehensive customer profiles, identifying behavioural patterns, and creating more personalised experiences and targeted offers.

Avoid relying solely on the perspective of one internal stakeholder when making decisions – and we see this happen a lot. We’ve also found that what customers say they want differs from what customers respond to in real-life. Therefore, it is essential to test and learn through methods like A/B testing and experimentation. Explore various partnership approaches, messaging strategies, offers, and rewards to identify the most effective strategies. Utilise multiple data points to assess the effectiveness of your activities, including their impact on business outcomes, conversion rates, customer feedback, and engagement. Continuously iterate and refine your approach based on the insights you gather. 

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This article was originally published in the June/July 2023 issue of NZ MarketingClick here to subscribe.

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