Incentives, discounts, loyalty points are all well and good when getting a loyalty app program off the ground. But over the long haul it takes diversification of benefits and deeper kinds of interaction to engage the loyalist and make them feel special outside of direct use of benefits. A veteran of Amazon’s Prime program, Starbucks and currently KFC’s Director of Digital Strategy, Ashley Travis shares the lessons of true loyalty.
5. HISTORY OF LOYALTY
THE BEGINNING:
REWARDS WITH NO DATA
THE TRANSFORMATION:
GIVE US SOME DATA,
WE’LL REWARD YOU
THE SUBSCRIPTION ERA:
ALL EXPERIENCE, NO POINTS
IFC
As Nitin mentioned in opening remarks, we have done a great job laying the foundations, setting up eCommerce, etc in the past two years and we have seen the success of that reflected in our strong earnings. But what is next? Technology alone can’t guarantee engagement.
RED TALKS
there are 2 ways to do this: (1) build more restaurants, and (2) build more channels to access the brand. So we’ve been expanding our access points through opening up our kitchens to everyone, everywhere, through every possible channel...with the main ones being kiosks, C&C and home delivery. And when you add these three channels up, it’s becoming a meaningful part of our business...and the fastest growing part for sure – to the extent that we think online channels will be roughly 1/3 of our business within the next few years.
Take the best from the markets that are working, but have a relevant, local voice
Adapt the plan to the maturity curve and sophistication of the team delivering
Points-based programs have become so common consumers often interact or participate without any real expectation or appreciation.
Of the 3.8 billion current consumer loyalty program accounts approximately 2.1 billion are inactive.*
80 percent of consumers indicate the primary motivation for belonging to a program is saving money.**
Only 41 percent of loyalty program members say the program makes them feel more loyal to the brand.***
Taco Bell Explore – Rewards you for living “mas” – mining social posts to give you rewards (no purchase necessary) to unlock game pieces, puzzles. Was confusing and difficult for customers to connect with.
Chiptopia – Frequency play - After only a few months had 3.6M participants and accounted for 30% of all transactions with an incredibly high return rate (how much you have to spend vs. what you get for free) (33% vs. 8% for Starbucks)- was extremely expensive and did not even change brand perception (which was the hypothesis as to why they did it)
As you are developing hypotheses and potential offers to test, remember that value is only as large as the customer thinks that it is. Their perception of how much discount they are receiving is more important than the actual number you are giving. Why does this matter? Well, perhaps, to your customers, receiving something like a secret menu or free customizations is more important than a free side or even a cookie. The more data we get on our customers, the better chance we have of knowing what content or engagement opportunities will drive behavior beyond merely an offer.
Noone knew this better than the colonel – a couple examples of him tailoring his message to be more personalized.
high frequency category with competitors on every street corner, brands must battle for ever visit.
SBUX uses Rewards, Stars, and Free Drinks as the onramp for deeply personalized offers and high utility applications.
SBUX aggressively promotes their program and has over 17 million members, tracking over 40% of sales to help support nearly double-digit YOY growth.
Without Rewards there are fewer people using the app and they visit less often.
Examples: SOPAC Secret Menu (culturally relevant – video)you can start being more “human” in a mass way through programs and experiences that are deeply relevant, but also allow you to gather more
Always keep your eye on the franchisee’s bottom line
Risk management
Take the best from the markets that are working, but have a relevant, local voice
Adapt the plan to the maturity curve and sophistication of the team delivering
Not going to build a program for every day eating
Reach out and understand your customers’ lives, not just their appetite for chicken
Loyalty does not always mean increased frequency