Growing Loyalty Beyond Traditional Reward Programs
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Whether you’re a retailer, a bank, or a travel business, everyone is looking for ways to create a deeper sense of connection with customers and gain their loyalty. Somewhere through history we lost our way. Instead of building real loyalty, we became trapped by reward programs founded on the exchange of tokens for transactions. We’ve invested significant time, money, and energy in programs that are increasingly homogeneous and non-differentiating in the eyes of consumers. In this presentation Dianne Inniss, a retail customer experience and strategy leader, provides practical advice for how to move brands towards a differentiated future built on real customer loyalty.
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Growing Loyalty Beyond Traditional Reward Programs
- 1. TOWARDS REAL LOYALTY 12 steps to real customer engagement GROWING LOYALTY Beyond Traditional Reward Programs
- 2. 2 LOYALTY IS AN EMOTION
- 3. …SO WHY DO WE TREAT IT LIKE A TRANSACTION?
- 4. WE HAVE BECOME VICTIMS OF HISTORY AND HABIT 1700s COPPER TOKENS 1800s COUPONS 1930s - 70s TRADING STAMPS 1980s DEREGULATION 1990s DIGITIZATION 2000s MOBILE TOOLS
- 6. IT MATTERS TO THE MARKET S&P 500 High Focus on Loyalty Programs Low Focus on Loyalty Programs Source: McKinsey Corporate Performance Analysis Tool – Returns on 55 major companies with a high/low focus on loyalty programs. Index SHAREHOLDERS HAVE REWARDED COMPANIES FOR HAVING A FOCUS ON LOYALTY
- 7. -1% revenue growth DONE WRONG = RISK MARGINS -10% lower EBITDA
- 8. A DISCOUNT CARD IS NOT ENOUGH
- 9. ONE SIZE DOES NOT FIT ALL
- 11. DOING THE SAME AS OTHERS LEADS TO FAILING IN THE SAME WAY Customer engagement ROI over time
- 12. SO.. WHAT COULD BE DIFFERENT? HOW TO SHAPE YOUR FUTURE? WHERE DID IT GO WRONG?
- 13. HOWWHAT WHEN
- 14. HOW DO YOU USE WHAT YOU KNOW ABOUT ME?
- 16. WHAT IF, INSTEAD OF BUYING LOYALTY, WE RECLAIMED WHAT CREATES IT? Quality Meeting Needs Consistency Availability Enjoyment Recognition Value EXPERIENCE
- 18. WHAT WOULD DIFFERENT LOOK LIKE? Connected PersonalRelevant Contextual Customer Centered
- 19. CONTEXTUAL
- 20. PLACE PURPOSE
- 22. PERSONAL
- 26. 54%More spend 2xMore referrals 83%More Engaged
- 27. CONNECTED
- 28. LOYALTY IS AN EMOTION A crowd is a tribe without a leader. A crowd is a tribe without communication. Most organisations spend their time marketing the crowd. Smart organisations assemble the tribe. SETH GODIN
- 29. 29
- 35. SO.. WHAT COULD BE DIFFERENT? HOW TO SHAPE YOUR FUTURE? WHERE DID IT GO WRONG?
- 36. So how do you break the cycle of self-abuse?
- 37. 1. CONTEMPLATE: WHAT IS YOUR WHY?1. CONTEMPLATE: DEFINE YOUR CUSTOMER’s WHY
- 38. 38
- 39. 2. PREPARE: DESIGN THE EXPERIENCE
- 41. BUILDING PROGRAM ELEMENTS THAT DELIGHT CUSTOMERS Functional Reliable Usable Pleasurable Meaningful YAY! Convenient Focused on experiences Focused on tasks FEW PROGRAMS CROSS THIS LINE
- 43. 3. TAKE ACTION: TEST AND EXPERIMENT TIME DEGREEOFCOMMITMENT Traditional programs Experimentation Moments of delight
- 44. Standard, static program Long cycles, then relaunch 4. MAINTAIN: IT’S NOT JUST “ONE AND DONE” Today Future Vision IDEA STREAMS INNOVATION CAPABILITY BUILD, TEST & LEARN GO STOP PIVOT
- 45. CREATE THE PLATFORM FOR EXPERIMENTATION Concept Ideas and prototypes Explore with customers Pilot Few segments/ sites Continue learning Scale up Refine and expand Manage capacity Rollout Loyal, free and paid Mainstream Evolve Becomes commodity Change the game
- 46. THE PATH TO CONTINUOUS LOYALTY Baking innovation into the mindset and culture of your brand and people Creating a capability that evolves with your customers over time
- 47. 47
- 48. • Not all customers are created equal. Avoid over- investing by being all things to all people • Value is variable. Customers value more than money. Successful programs depend on understanding the right levers • Experience matters. Moments of connection and relevance drive repeat behavior • Test, learn, repeat. Design for iterative tests and take advantage of test data for continuous delivery and refinement TAKE-AWAYS
- 50. Dianne Inniss dinniss@thoughtworks.com THANK YOU Dan McMahon dmcma@thoughtworks.com