Top 10 Customer Loyalty Trends for 2024

This list is curated by- Anjali Pillai, Trevor Antley, Megan Fiorendino and Jubin Mehta. Graphics credit to Muhammed Shafi.

The landscape of customer loyalty is rapidly evolving, and 2024 is set to witness some significant trends driven by advancements in AI and changing consumer behaviors. At Capillary, we’ve played a role in designing or redesigning 500+ loyalty programs for 400+ brands over the last 15 years. Through this blog, we bring you the top 10 trends to keep an eye out for in 2024:

1. Generative Loyalty and AI’s Impact

Generative AI has changed the paradigm in technology over the course of 2023. A truly watershed moment for the world, 2023 will be remembered as the year when AI went mainstream with ChatGPT. At Capillary, we’ve been at the forefront of AI in the customer loyalty space with the Nudge Framework and now, we’re incorporating generative AI towards building a loyalty LLM. Read more on how is generative AI changing the customer loyalty landscape.

2. Hyper-Personalization through AI

AI is elevating the personalization of customer experiences to unprecedented levels. It is enabling brands to tailor experiences precisely to customer preferences, from product recommendations to marketing communications.

Highly effective customer segmentation through predictive analytics helps in communicating the right message at the right time. Through Capillary’s partnership with Yawye, deliver real-time emotional sentiment to clients at every touchpoint of the customer journey.

3. CPG Brands will double down on loyalty programs

The Consumer Packaged Goods (CPG) industry is expected to focus more intensively on loyalty programs, leveraging AI to better understand and engage customers. The entire D2C wave has shifted the landscape for CPG brands and with the need to connect directly coming in, more and more CPG brands will focus on doubling down on loyalty marketing. Learn more about the industry here.

4. Rise of SaaS in Loyalty Management

Software as a Service (SaaS) platforms are disrupting the loyalty management space, offering scalable and sophisticated solutions for personalizing and managing loyalty programs. At Capillary, we offer Managed SaaS solutions where a brand gets end to end loyalty management- right from expert consultancy to begin with, a highly advanced tech platform that powers the loyalty program and downstream digital services to complete the loop.

5. Regulatory Changes with AI

Earlier this month, The Times sued OpenAI and Microsoft over AI use of copyrighted work.

There will be several such concerns with fine tuning LLMs and usage of data in general. AI is marching forth and regulations are playing catchup at the moment but it’s inevitable for regulatory forces to come in more strongly as we move towards policies defining ethical usage of AI. It is a superpower which the world needs to safeguard and use for the good.

6. AI/ML in Prescriptive Models continue to develop

AI and Machine Learning (ML) are advancing towards more prescriptive models, predicting customer behavior and preferences to enhance loyalty and personalization strategies. AI has been a key part of our product roadmap at Capillary from 2016 and before generative AI, the primary focus and benefit has been on prescriptive models through the Nudge Framework. Developments in this direction will continue in parallel with Generative loyalty over the couse of 2024.

7. Younger Generation’s Influence in B2B buying

The buying persona is quickly shifting in the B2B software space as a younger generation takes up leadership roles in the new technology environment.

According to Forrester, buyers aged 25 to 44 will make up three-fourths of business buying teams in 2024. As per this Forbes article, when engaged in face-to-face buying, Forrester’s data shows that these buyers find personal interactions with product experts more meaningful than all other in-person activities. What are the implications for B2B marketers? “Millennials find that when they get to talk to the experts sooner, they can make the decisions faster,” said Ramos.

8. Gamification and Experiential Rewards

We all know the power of gamification- increased engagement and stronger brand recollection are two aspects that immediately come to mind. If we look at data- brands have seen upto 47% rise in engagement and a 22% rise in brand loyalty through gamification tactics. Here’s a comprehensive guide on incorporating gamification into your loyalty strategies.

9. Role of UGC in Customer Service and Loyalty Metrics

Brands increasingly use user-generated content (UGC) in loyalty programs, and this trend is expected to continue into 2024. UGC could include customer reviews, photos, social media posts, and more, which can be key to the brand’s loyalty marketing and customer engagement strategy. UGC can grant the brand a greater sense of authenticity for new customers.

10. Metaverse in Loyalty Experience

While AI is changing the narrative, the metaverse continues to play a significant role in expanding the loyalty experience, offering immersive and interactive platforms for customer engagement. Progressive brands are testing waters with Metaverse in the form of NFTs like Lufthansa’s recently launched Web3 NFT loyalty program.

We expect this trend to continue in 2024 but we’re still some distance from reaching a point where Metaverse starts showing up in early discussion stages when considering a loyalty program.

That rounds up the top 10 trends in customer loyalty that we foresee and as a follow up, later in the month, we’d also be launching a 50 Trends report which will go into the granularities and unlock insights for loyalty marketers across the globe, stay tuned!

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Capillary Marcomm is a team of loyalty and customer engagement experts bringing you valuable loyalty insights from around the world, enriching your knowledge in the customer loyalty space.