Next Stage Loyalty Depends on Elevating CX Throughout the Customer Journey

Next Stage Loyalty Depends on Elevating CX Throughout the Customer Journey

Retailers have innovated impressively with their loyalty programmes and online channels. But a greater focus on lower-funnel CX will amplify the impact of these initiatives.

Winning the loyalty of customers has never been more important in retail. Not only for the supermarkets, which are competing ferociously for market share as shoppers look for value, but increasingly across the category.

The potential of loyalty programmes throughout the UK retail industry is demonstrated by rising levels of investment. In value terms, the UK loyalty market will increase from US$8.18 billion in 2023 to reach US$12.67 billion by 2028.

A revolution in data analytics has also helped retailers to create revenue streams from the information that they hold on customers in the shape of retail media platforms. Meanwhile, their digital platforms provide ways to enhance the customer experience while selling online.

And there's no hiding that customers want a strong customer experience from retailers. While price is vitally important, loyalty programme-enabled CX is an important differentiator in terms of delivering for shoppers on brand, improving the shopping experience across channels, and making this experience personal.

Before looking at how to realise this stronger CX by blending loyalty programmes with stronger support for customers at the bottom of the funnel, it's worth considering the fundamentals of customer experience.

The "Three Cs" for CX success

The crucial role of CX in retail is highlighted in Merkle's latest report - 2024 CX Imperatives: From Customer Engagement to Customer Empowerment - based on the findings of our latest consumer study that reveals six critical imperatives for CX professionals.

Alongside other key findings, the report highlights some clear goals for CX professionals in the retail space with its "Three Cs for CX Success" - the principles of cost effectiveness, convenience and consistency that consumers expect from their brand experiences. 

Let's take these in turn from the customer's point of view. 

Cost effectiveness

Delivering cost effectiveness means offering value. Consumers in general want a good deal – they don’t want to pay more than they have to, especially with inflation running higher than usual. But “value” doesn’t necessarily mean “cheap.” A person in the market for a luxury watch may not be looking for an inexpensive product, per se, but they do want the most value from their purchase. 

Making an experience more affordable or cost effective is a customer's most preferred attribute in their experience of brand, and over-indexes among older audiences. 


Convenience can refer to a consumer’s ability to gather information, purchase in their preferred manner, or use and maintain a product or service with minimal effort. This attribute is all about removing friction and frustration from the customer’s daily life. 


This means delivering on the main promise to consumers but not necessarily through an experience that’s unchanging. The common denominator is that consumers receive what they’ve come to expect. And it's here that a personal experience is vital. The research shows, for instance, that an experience customised to personal need is in the top five of preferred attributes, and over-indexes among 18-34s and 45-55s. 

The report emphasises how loyalty is generated by embracing these principles and also through an understanding of where to balance digital and human interactions throughout the customer journey. For instance, in retail, customer demand for human interaction at the bottom end of the funnel - the purchase and product support stages - is shown to be significantly higher than during top-of-funnel activity such as research and evaluation.  

Investing in the post-purchase experience

This insight leads to the post-purchase experience and its role in developing longer-term relationships with customers. The research shows that the bulk of the experience, and often the most meaningful part, happens after the purchase.

That's an issue because, while the majority of marketers focus on the upper funnel progression from awareness to purchase, consumers have different expectations. When asked where brands could improve their experiences, consumers strongly emphasise the later, post-purchase stages of their journeys. 

The takeaway here is that while loyalty programmes have a central role in fostering and growing relationships, they can’t fully solve the problem of customer churn. Best suited to amplify what customers already like about a brand, these programmes are part of the overall post-purchase experience, but they can’t compensate for subpar service, support, or a bad product. 

Boosting the power of loyalty programmes involves creating and capturing value above and beyond the moment of purchase. For marketing professionals, this means placing a greater emphasis on measuring the success of their CX initiatives through customer lifetime value alongside short-term metrics such as clicks or conversions. 

Uncover more compelling retail experience insights by downloading our report, 2024 CX Imperatives: From Customer Engagement to Customer Empowerment. Or if you’d like to discuss your brand’s needs in this space, please do get in touch.

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