growing loyalty beyond traditional reward programs

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TOWARDS REAL LOYALTY 12 steps to real customer engagement GROWING LOYALTY Beyond Traditional Reward Programs

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Page 1: Growing Loyalty Beyond Traditional Reward Programs

TOWARDS REAL LOYALTY12 steps to real customer engagementGROWING LOYALTYBeyond Traditional Reward Programs

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LOYALTY IS AN EMOTION

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…SO WHY DO WE TREAT IT LIKE A TRANSACTION?

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WE HAVE BECOME VICTIMS OF HISTORY AND HABIT

1700sCOPPER TOKENS

1800sCOUPONS

1930s - 70sTRADING STAMPS

1980sDEREGULATION

1990sDIGITIZATION

2000sMOBILE TOOLS

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WE CONTINUE TO INVEST…

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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

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-1% revenue growth

DONE WRONG =RISK MARGINS

-10% lower

EBITDA

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A DISCOUNT CARD IS NOT ENOUGH

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ONE SIZE DOES NOT FIT ALL

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LOYALTY NEEDS NURTURING

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DOING THE SAME AS OTHERS LEADS TO FAILING IN THE SAME WAY

Customerengagement

ROI over time

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SO.. WHAT COULD BE DIFFERENT?

HOW TO SHAPE YOUR FUTURE?

WHERE DID IT GO WRONG?

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HOWWHAT WHEN

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HOW DO YOU USE WHAT YOU KNOW

ABOUT ME?

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ENTERTAINEDUCATE

ENGAGE

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WHAT IF, INSTEAD OF BUYING LOYALTY, WE RECLAIMED WHAT CREATES IT?

Quality

Meeting NeedsConsistency

Availability

Enjoyment

Recognition

ValueEXPERIENCE

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WHAT WOULD DIFFERENT LOOK LIKE?

Connected

PersonalRelevant

Contextual

Customer Centered

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CONTEXTUAL

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PLACEPURPOSE

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PERSONAL

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RELEVANT

EXPERIENCES

SERVICEACCESS

PRESTIGEPRODUCT

PRICE

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54%More spend

2xMore referrals

83%More Engaged

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CONNECTED

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LOYALTY IS AN EMOTIONA 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

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CUSTOMER-CENTRED

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Big Data

Ubiquitous Touch

Cloud

Insight Engage Anywhere

Responsive Adaptable

Data Ubiquitous Touch

Cloud

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SO.. WHAT COULD BE DIFFERENT?

HOW TO SHAPE YOUR FUTURE?

WHERE DID IT GO WRONG?

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So how do you break the cycle of

self-abuse?

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1. CONTEMPLATE: WHAT IS YOUR WHY?1. CONTEMPLATE: DEFINE YOUR CUSTOMER’s WHY

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2. PREPARE: DESIGN THE EXPERIENCE

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BUILDING PROGRAM ELEMENTS THAT DELIGHT CUSTOMERS

Functional

Reliable

Usable

Pleasurable

Meaningful

YAY!

Convenient

Focused on experiences

Focused on tasks

FEW PROGRAMS CROSS THIS LINE

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95% engagement

rate

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3. TAKE ACTION: TEST AND EXPERIMENT

TIME

DEG

REE

OF

COM

MIT

MEN

T

Traditional programs

Experimentation Moments of delight

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Standard, static program

Long cycles, then relaunch

4. MAINTAIN: IT’S NOT JUST “ONE AND DONE”

Today Future Vision

IDEASTREAMS

INNOVATION CAPABILITY

BUILD, TEST & LEARN

GO

STOP

PIVOT

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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

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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

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• 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

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Dianne Inniss [email protected]

THANK YOU

Dan McMahon [email protected]