How the Internet of Things will impact customer loyalty in 2018

The Internet of Things (IoT) has shifted from a trend to something all marketers need to consider.

But how are marketers leveraging the IoT and how will it impact loyalty in the coming year? Marketers are using connected devices like wearables, beacons and wireless sensors to drive loyalty through relevance, personalization and timeliness. Wearables, such as smart watches and fitness bands, point not only to the increasing number of wallets and payment options, but also to the potential of loyalty programs to reward ideal behaviors (for example, Walgreens’ Balance® Rewards members are rewarded for going for a run, or walking 10K steps; etc.). Beacons and other geo-locational devices highlight the IoT’s power to encourage store visits and enhance the in-store shopping experience through personalized communication. And, wireless sensors within consumer appliances and in automobiles allow companies to reward good behavior and to predict, diagnose and prevent devices from malfunctioning. Similarly, utility companies are designing loyalty programs around smart home appliances such as the Nest Thermostat by offering incentives to consumers who reduce energy loads during peak hours. Additionally, loyalty programs will continue to get ‘smarter’ in 2018 and beyond as more marketers incorporate voice enabled assistances (like Amazon or Google) in to their programs to enable frictionless transactions and redemptions.

Brands in action in 2018

Home Depot connected its online loyalty program with mobile and in-store by integrating loyalty members’ online shopping carts and wish lists with its mobile app. When a contractor—one of Home Depot’s primary shoppers— enters the store, not only will they receive a personalized greeting, but the most efficient route to navigate the store based on the items in their shopping cart, based on inventory.

Additionally, guests at the Walt Disney World Resort are given a MagicBand wristband, integrated with the My Disney Experience app, which facilitates planning activities such as dining, rides, attending parades, and more. Disney can use the information and send its guests personalized messages like what rides they might skip if they are running behind, or, if they are heading toward a congested area, it suggests a better route to take. Customers can also tap the MagicBand to pay for food and souvenirs (no cash needed) and scanners detect the bands for authorization for rides, etc.

So where does the loyalty program fit in the connected world? It’s about ensuring your program offers the ‘must have’ technology advancements that provide convenience and ease; additionally, it’s preparing your program to achieve success on the emotional level, and getting your members to trust you.

Building customer trust in 2018

Research has found that customer loyalty is primarily founded on trust and positive emotional connections. Loyalty as a discipline has evolved from rewarding customer behaviors; it’s now recognized and indicated that the number one motivator for consumers to engage with their loyalty program is they love the brand, love the service and love the merchant – it’s the emotional connection that they feel. When a brand engages in a meaningful way with a consumer, it instantly delivers value. Understanding the message you’re receiving from the device and what the consumer is doing is essential. Connected devices make it easier to share contextual data with the customer’s approved organizations automatically, through apps and API connections. Combined with predictive (and prescriptive) analytics, this information enables marketers to respond with – or even initiate – hyper-relevant conversations. This may or may not be specifically in the context of the loyalty scheme – even without a formal program in place, personalized, relevant interactions go a long way towards cultivating loyalty.

Engendering loyalty and building trust is all about making sure your brand has a personal connection with each customer, and delivers relevant and timely messaging to help them on whatever journey or path-to-purchase they are on. The IoT will give marketers an increasing number of opportunities to make these connections with consumers, and to really turn them into brand loyalists, you’ll need to be sure you have the right partners who can help you recognize the customer, determine the right message in the moment, and deliver it via whatever channel the consumer chooses to engage in.

Epsilon is uniquely prepared to embrace the IoT marketing and deliver on the ‘right message in the moment’ with our Momentum technology capability.