We are heading into the Year of Loyalty, where businesses that invest in their employees and customers will give themselves a platform for success. Predicting what 2024 will bring is challenging – with the prospect of a General Election and the constantly shifting sands of economic policy have created a much more uncertain future.
Last year, we knew everyone was in for a rough ride and so it proved, with businesses and employees wrestling with rising costs and interest rates. But while 2024 may not be as clearly-defined, what is certain is that loyalty will be the most influential driver.
The experience of the last 12 months – and in some ways the last three years – has created in consumers and workers a greater sense of their own value – to themselves, the places they work and the businesses and services they use.
The businesses that succeed in 2024 will be the ones that recognise how to build and maintain loyalty in a more meaningful way.
From a consumer standpoint, traditional loyalty programmes no longer have the influence they once did. Already we have seen the biggest supermarkets adjust their loyalty programmes so that rather than focusing on accumulating points, members get instant discounts at the checkout instead.
Price remains a strong influence, but that is falling. According to data from customer experience managers Qualtrics, 61 per cent of consumers base their loyalty to a brand on the quality of the service or product and 47 per cent on the customer service support. Only 43 per cent base it on low prices. So the impact of sales – with the possible exception of Black Friday – is diminishing in customers’ eyes.
These significant shifts in consumer behaviour will filter through to all businesses in 2024. Consumers post-Covid have an increasing need to feel looked out for and protected from the unexpected.
Businesses that can offer wraparound care with tangible benefits – service packages for major expenses for example – will see real growth in 2024. But those packages need to offer real value at the right price. Never have consumers been more aware of what they are actually getting when they sign up for value-added services.
Make it too complex, too expensive or pay lip-service to the problem you’re claiming to protect them against and it could be very damaging to your business.
We’ve seen a lot of recent articles preaching retention for 2024 and we agree, retention is vital. We actually had this as a key point for 2023 and the message has not changed.
Recruitment remains challenging for business, with significant numbers of unfilled vacancies across the economy.
Latest figures from the Office of National Statistics show almost a million unfilled job vacancies in the UK right now. So it’s obvious that retaining employees is vital to growth.
Love2shop’s own Employee Value Report, published in September, told us that despite this need to retain staff, 4.4 million UK workers are considering leaving their job as they feel undervalued, with 1.5 million ready to leave without a new role to go to.
When asked why, 41 per cent said they felt their contribution to the business was not acknowledged, 32 per cent cited poor pay and benefits and 29 per cent believed that loyalty is a one-way street and they did not matter to their employer.
That indicates serious disillusionment with employers – and that could become a crisis in 2024.
What’s frustrating is that the UK workforce is not asking employers for a lot. We also found that 90% would feel more valued by receiving a spontaneous gift card at work but 47% said their employer never gifts them anything.
Small regular shows of appreciation beyond the pay packet in 2024 are the key to employee retention. Employee discount schemes can be one solution, but many are complex and not valued by employees. Businesses that get it right will be in a strong position when the economy begins to truly grow again.
This year AI has been the buzz phrase in business and that is unlikely to stop. However, we believe it will settle down and find its place in the ecosystem in 2024. The rapid explosion of artificial intelligence in 2023 made it seem a bit like the Wild West, with even Google struggling to keep up!
But 2024 will see more businesses employ AI strategically. Used as a support tool to improve customer experience alongside human interaction it can help businesses manage more enquiries and ease some of the teething troubles growing businesses sometimes have with fulfilment.
According to global research firm Forrester, AI will be used more surgically, particularly by digital businesses, to support customer service delivery, however it also predicts that 40 per cent of buyers aged 25-44 will rate person-to-person interactions as their most meaningful – so if customer loyalty is your goal, invest in people.
APIs are nothing new, but we will see them deployed more by businesses to enhance their user experience. Businesses working with partners to deliver key employee benefits or customer rewards will move away from engineering their own in-house solutions and instead will expect suppliers to provide seamless APIs that help them to deliver global-quality brand engagement and user experience within their budget.
Critically, the most important investments businesses will make in 2024 will be around experience – the workplace experience, the customer experience, the online experience.
Whatever happens 2024 will be a year of significant change for business. Attitudes and behaviours may be shifting but by using new insights to focus on what’s really important businesses will thrive.
The primary focus, as ever is on quality of products and services. But invest in your workforce and your customers. Create an eco-system around your brand that people want to engage with and be a part of.
That will make your business resilient, agile and ensure you’re ready to grow whatever surprises 2024 has in store.
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