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Loyalty—it’s in your customers’ pockets and at their fingertips. Smart brands are acquiring, engaging, and retaining customers with a loyalty strategy that harnesses the simplicity and readily-adopted nature of mobile. Here are some ideas on how leverage new integrations in mobile technology to personalize and enrich your customers’ journey.
Back in 1997 when I began to lead a loyalty project for Shoppers Drug Mart with the code name “ASA” (an acronym for Acetylsalicylic acid), little did I know that 20 years later we would be witnessing the evolution of Canada’s favorite and most successful loyalty program. This past week’s announcement of the merger of these two iconic loyalty programs makes great business sense for the brands and their customers. The Shoppers Optimum program was originally tested in Kingston, Halifax and Calgary over a 16-month period. Towards the end of the pilot in 1999, approval was granted to launch the Shoppers Optimum Program nationally.
Loyalty Programs are critical to fostering effective Customer Engagement strategies for brands. They enable Customer acquisition, onboarding, engagement, retention, and even win back a brand’s Customers. Many strategic brand marketers have made their Loyalty Programs a key business imperative and have invested significant financial and human capital against this important endeavor. We often see many Loyalty Programs underperform or even fail because of poor Program design and planning. When designing or renovating your Loyalty Program, marketers should avoid:
Yes, brands are dazzling customers with virtual and augmented reality, interactive screens and AI-powered everything, yet this provides an opportunity for brands to differentiate through the emotional value customers gain from their entire purchase experience.
It means brands need to get better at being emotional. Customers want “emotional luxury” derived from feeling recognized, special, and known; yet, only 20% of consumers say they feel special and recognized by a brand representative. This is a massive, untapped opportunity for brands to better engage with consumers.
Almost all currency-based consumer loyalty Program designs inherently house a financial liability, which in many cases has a material impact on a brand’s balance sheet. Generally speaking, a brand incurs liability for a future loyalty Program reward as soon as it issues the Program’s currency (e.g., points, miles, credits, stars, etc.) to a Program Member. From an income statement perspective, there is a reduction in revenue as soon as the currency is issued to a Program Member. As such, the brand cannot account for the full sale, since a percentage will need to be remunerated in the form of a reward (or dividend) back to the Program Member upon redemption. The accounting principles which govern financial liability management are not for the faint of heart, and they more than often create an ongoing level of tension between a brand’s CFO and CMO. CFOs wish to minimize their currency liability and resulting financial exposure, while CMOs wish to issue currency to incent incremental transactional behaviors with the aspiration of maximizing Member redemptions.
In today’s mobile-driven marketplace, and with the rise of the Millennial “always on” consumer, having an app complement a retailer’s marketing strategy has become table stakes. Apps have evolved from simply being an extension of the digital ecosystem to leading the way for brand innovation, campaign awareness, and deeper loyalty engagement.
Never before has a brand had the opportunity to be part of such a personal customer connection—your customers’ mobile device is more than just a communication channel; it’s their hub to connect to all things, all people, and interact with your brand in more personal ways than ever before. The challenge this brings is for retailers to truly understand how users want to connect with their brand, and to develop features that enable those interactions in innovative, creative, relevant, and simple ways. The opportunity is to retain top-of-mind awareness for your brand, create habit-forming engagements, and obtain a higher reach of brand advocacy, especially when a formal loyalty program exists for your brand. Surprisingly, Bond Brand Loyalty’s 2016 Loyalty Report shows that almost 50% of consumers aren’t even aware if the loyalty program they engage with has an app, which is a lost opportunity for many retailers.
Over the past 15 years, loyalty programs have enjoyed a relatively low level of fraudulent activities. However, in recent months we have seen the level of loyalty program and loyalty card fraud increase. As “Chip & Pin” credit cards continue to become prevalent, specific industries whose business models include transactions where the physical card does not need to be present, have become the target of fraudsters. One of these in particular is the travel booking industry.
Lately, fraudulent activities have propagated to loyalty programs where the travel components of the program are the primary target. However, as there often is with fraud schemes, there’s a twist. The loyalty program is not the actual target of the fraud, but rather a means to facilitate the scheme.
Your dentist has a file on you. One that includes your name, birthdate, address and other personal details. You visit your dentist regularly, and tell your friends about your experiences with him. What if your dentist never used your first name? What if he never referred back to your visit history or dental records?
Apply this concept to a brand’s loyalty Program. When you enroll and participate in a loyalty Program, you’ve likely given up a good amount of personal information—and it’s not always put to good use, or at least not overtly. Consumers have noted this disconnect. The sixth annual survey by Bond Brand Loyalty has found that only 22 percent of loyalty program members are very satisfied with the level of personalization they’re receiving from brands. This highlights a tremendous opportunity for brands as satisfaction is 8X higher when programs are highly personalized. The thing is, personalization does not have to be complicated to yield this kind of payoff in satisfaction. Here are three steps to improve your personalization efforts today:
Make no mistake: Building authentic relationships with consumers is hard work—and getting harder by the day. Consumer expectations continue to rise. The pace of change continues to increase. The need to stay relevant is more important than ever.
Our latest research from the 2016 Bond Loyalty Report, shows that consumers continue to value Loyalty programs—programs that pay dividends back to brands in the form of loyalty, advocacy and increased spend. It’s time for marketers to start paying closer attention.
If you’ve taken a “set it and forget it” approach you’ve likely overlooked what matters most to your program Members. Taking a closer look now might land some relatively quick wins.