Unlocking the Power of Consolidated Loyalty Currencies: Enhancing Customer Engagement and Business Growth

The loyalty sector is thriving, with businesses across various industries increasingly relying on loyalty programs to expand their customer base and deepen relationships. As the landscape evolves, the key to staying competitive lies in embracing a new era of cooperation, creating value for customers, and generating value for all stakeholders involved.

Empowering Consumers and Businesses Through Consolidated Loyalty Currencies

Addressing Consumer Frustrations with Fragmented Loyalty Programs

Consumers today are overwhelmed by the sheer number of loyalty programs they belong to, with two-thirds (65%) being members of at least three programs and 27% belonging to five or more. This fragmentation can lead to confusion, disengagement, and a desire for a more streamlined approach. According to a survey conducted by IAG Loyalty, two-thirds (67%) of consumers favor the idea of combining loyalty programs into a single, unified system.The appeal of consolidated loyalty currencies lies in their ability to simplify the customer experience. By integrating multiple loyalty programs into a single currency, consumers can easily earn and redeem rewards across various brands, products, or services. This flexibility and accessibility are particularly valued by younger generations, with 48% of Gen Z consumers saying they would be more loyal to brands with consolidated currencies.

Bridging the Perception Gap Between Consumers and Businesses

While consumers are increasingly seeking consolidated loyalty currencies, the majority of business leaders (52%) underestimate this demand. This perception gap suggests that many businesses may be missing opportunities to enhance customer satisfaction and engagement by not fully embracing or prioritizing currency consolidation.However, business leaders do seem to acknowledge that current loyalty programs may not be fully meeting evolving consumer needs. In fact, 71% of them believe loyalty programs will change over the next two years, with many anticipating a rise in interconnected loyalty networks.

Unlocking the Dual Benefits of Consolidated Loyalty Currencies

Consolidated loyalty currencies offer dual benefits, providing consumers with the convenience of everyday point collection and leading redemption options, while simultaneously driving growth, increased engagement, and stronger customer loyalty for brands.For consumers, consolidated currencies bring their relationships with various brands under a single loyalty umbrella without diluting the individual brand identities. This simplifies the process and allows them to pool their earnings across different programs, making it easier to attain rewards.From a business perspective, consolidated currencies offer the advantage of scale, attracting more customers and enhancing marketing effectiveness. By tapping into a consolidated currency, brands can cut through the noise and reach new audiences in a cost-effective manner, while retaining control over their program and brand identity.

Expanding the Reach and Relevance of Consolidated Currencies

IAG Loyalty's Avios currency is leading the charge in the consolidation of loyalty programs. By integrating Avios with partners like Qatar Airways and Finnair, IAG Loyalty has seen significant benefits, including a 26% increase in customers, a 50% increase in points collected, and a 75% increase in points redeemed year over year.Beyond the travel sector, IAG Loyalty is exploring partnerships that make Avios more relevant in consumers' daily lives. By collaborating with retail brands like Sainsbury's, the company is facilitating frequent, high-engagement interactions for customers and giving them the ability to convert everyday spending into special travel experiences.According to the survey, six in 10 consumers (61%) want to collect more points from day-to-day shopping to spend on holidays, and they are willing to spend 17% more on their weekly shopping to do so. Avios data from real-world transactions supports these findings, with basket size increasing by 50% after members link Nectar cards to Avios.

Fostering Cross-Category Collaboration for a Thriving Loyalty Ecosystem

As the loyalty landscape becomes more interconnected, companies like IAG Loyalty are leading the way by fostering cross-category collaboration. By remaining open-minded and adaptable, the loyalty industry can continue to thrive and deliver meaningful benefits to customers and partners alike.IAG Loyalty is ambitious in its plans to expand the reach of Avios, actively engaging with global brands in core markets and beyond. This expansion will help further consolidate the use of Avios, allowing customers to accrue and redeem points across multiple categories and regions, making it even more valuable for a diverse customer base.Additionally, IAG Loyalty is investing in the Avios brand to boost awareness, making it easier for partners to market and co-market globally, further extending the impact of the Avios brand.The loyalty industry is still young, and as it continues to evolve, the key will be to listen to customers more effectively, especially the silent majority who quietly engage with loyalty programs. By demonstrating that loyalty can be beneficial for both the customer and the business, companies like IAG Loyalty are paving the way for a thriving, interconnected loyalty ecosystem.