Voice Tech Could Transform Loyalty Programs. Here’s How

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This post is the latest in our “Beyond the Screen” series. It will be an editorial focus for the month of February, and you can see the rest of the series here

Artificial intelligence-powered smart speakers are quickly evolving from techie gadgets to standard household appliances. As more brands look at how they can encourage interactions across these devices, they’re exploiting their loyalty programs to accelerate voice adoption.

Within the hospitality industry, a growing number of hotels are using voice technology to improve personalization with experiences like virtual concierges. Virtual concierges use voice technology to personalize a guest’s stay by offering experiences based on past behavior. For example, virtual concierges can adjust thermostats or place room service orders based on a traveler’s previous preferences. When hotels and other hospitality brands take action based on the insights gathered about guests through their loyalty programs, they improve the overall guest experience.

Outside of the hospitality industry, brands are also offering discounts and special rewards to loyalty members who interact with their programs through smart speakers. Brands can easily engage with customers after they’ve placed orders through voice devices by asking them to answer trivia questions for extra rewards. Brands could also offer to give loyal customers free items for every five or 10 purchases made through voice devices.

“At the moment, voice technology is not playing a big role in loyalty programs. However, [as] more and more consumers own voice devices, they will become accustomed to voice as a channel through which they can actually make purchases. At that point, I think we’ll see voice assistants and devices start to play a bigger role in loyalty,” says Nicole Amsler, vice president of marketing at Formation, a company that uses AI and machine learning to learn about customer preferences and develop scalable solutions for individualized offers.

Investment in rewards programs is growing. US consumers hold more than 3 billion memberships across loyalty programs. Although the industry already underwent major change over the past decade—when paper punch cards were replaced by mobile wallets—some experts believe that the rise in voice technology could lead to the next major renaissance.

Amsler recommends that brands interested in this kind of strategy move away from one-size-fits-all offers and focus on personalized engagement instead.

“With those personalized offers, companies also need to be constantly testing and iterating to adapt to changing customer preferences and be flexible enough to adjust in order to connect with customers as individuals,” Amsler says.

If this approach takes off, loyalty tiers could disappear from popular programs. Amsler says loyalty tiers are both demotivating for shoppers and economically challenging for brands. Brands can appeal to different customer motivations and create promotions better suited to each customer by instead creating a diversity of goals and experiences, and offering a variety of rewards based on money, time, exclusive access, and other benefits.

“This avoids treating all shoppers within the same tiers with the same requirements,” she says.

From a business perspective, Amsler says brands need to ensure that newer voice technologies don’t shift too much focus onto customer acquisition. Even without flashy technology investments, customer acquisition is expensive, so new technology needs to also be valuable for customer retention in order for it to be worthwhile in the long term.

“Brands looking to integrate new technologies into their loyalty strategy … need to be customer-centric,” she says. “[And they need to] ensure the new technology is actually improving the experience and bringing value to customers.”

Stephanie Miles is a senior editor at Street Fight.Rainbow over Montclair

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.