Do’s And Don’ts For A Best-in-Class Loyalty Program

Do’s And Don’ts For A Best-in-Class Loyalty Program
SHARE
THIS



Brands are reinventing loyalty programs and turning them from cost centres into invaluable tools for collecting consumer data, driving customer engagement, and building brand equity. Digital – especially mobile – will be at the core of leading loyalty programs: Professor Scott Galloway argues one of the prime factors separating winning and losing brands going forward will be loyalty programs that use digital as connective tissue to learn about customers and provide them with satisfying consumer experiences.

DO: Use loyalty programs to incentivise engagement and product discovery.

 

DON’T: View loyalty a purely transactional.

Loyalty need not centre on transactions. In addition to purchase behaviour, brands can reward actions that directly and indirectly contribute to sales. Program members who write reviews, interact with the brand on social media, and post user-generated content prime the pump for online retail by enhancing the environment for other potential customers. Brands can also reward activities that drive product discovery.

Brand examples: Lancôme’s Elite Rewards program gives points for watching video tutorials on the brand site (which can help drive conversions further down the purchase funnel) and for connecting a loyalty account to Lancôme’s social media profiles. Lancôme has indicated that writing product reviews will earn loyalty points in the future. Brands already rewarding this activity include South Korea’s Galleria Department Store. Kimpton’s Karma Rewards Program, which rolled out last year, offers perks for social media shoutouts. Walgreens’ rewards program lets shoppers earn points for visiting different store sections.

lancome 1

DO: Use rewards to preserve and enhance brand equity

 

DON’T: Limit incentives to freebies and discounts – and participate in a race to the bottom for rewards.

With an abundance of loyalty programs to choose from and a lack of benefit differentiation, customers become loyal to programs rather than brands. Instead of limiting membership benefits to free or discounted goods and services, which do little to foster meaningful customer relationships, brands can reward members in ways that encourage customer interaction without the intent of driving immediate conversion. Product exploration as a form of redemption can include consultation with stylists, samples, or early access to products. Exclusive experiences and enhanced customer service can help to deepen emotion connections to a brand.

Brand examples: Sephora provides pre-release access to specialty products, while Neiman Marcus gives wardrobe consultations. Hotels and airlines tend toward enhanced customer service rewards, leveraging technology to upgrade experiences —expedited check-in or priority boarding, for instance. Best Buy is among the retailers that lower spending thresholds for free shipping. The North Face VIPeak program provides climbing clinics and lift tickets, and Nordstrom offers invitations to fashion shows and intimate access to designer teams.

loyalty 2DO: Make mobile a cornerstone of loyalty programs

 

DON’T: Neglect to link myriad functionalities for loyalty members within the mobile hub.

Many brands are missing enormous opportunities to harness mobile apps to push loyalty programs to the next level. Brand apps can serve as a hub to integrate loyalty with couponing, for example, and enable seamless omni-channel shopping. Nearly three-quarters of mobile consumers report wanting to use their mobile devices to interact with their loyalty programs, but just 56% of studied retailers with transactional loyalty programs invested in consumer-facing, commerce-oriented mobile apps in 2014.

Brand examples: Starwood’s loyalty app integrates basic functionalities — including member profiles, stay and reservation history, and the ability to view point accruals and book using reward points — with elegant solutions such as keyless room entry and native geo-local functionality that lets users avoid data entry while completing local bookings. Walgreens’ best-in-class app effectively integrates its Balance Rewards loyalty program. Mobile coupons can be added and removed in a click; when a mobile “card” is scanned at register, any applicable clipped coupons are automatically applied. And Sears’ Shop Your Way app lets loyalty members complete purchases with points and coupons and discover nearby deals and events, which can be sent as “Surprise Points” via push notification. The app can also coordinate online purchase and in-store or curbside pickup at Sears stores.

loyalty 3

DO: Make surrender inevitable for frequent customers

 

DON’T: Discourage consumers by making enrolment and benefits time-consuming and difficult to understand.

The best loyalty programs put customers who opt out at a distinct disadvantage. Mobile apps in particular are helping to make loyalty participation irresistible, as best-in-class apps serve as a gateway to seamless customer experiences — automatically applying coupons at point of purchase or faster and easier room booking or use of points as currency. In the hotel sector, loyalty programs should not only provide tangible rewards and discounts but also ease planning and booking, improve access to customer service and enhance the in-stay experience.

Brand examples: Starwood has been particularly savvy about transforming the guest experience. SPG Keyless lets loyalty members bypass the front desk and check in and access the room via mobile phone. With its Apple Watch app, Starwood even lets loyalty members pre-order drinks in advance of visiting the hotel bar. The Hilton HHonors app now allows guests to select a preferred room and request various amenities to be delivered to the room before arrival. For makeup fans who need to keep track of myriad product preferences, Sephora’s exemplary Beauty Insider program enables users to store sample, online, and in-store purchase histories in the “beauty bag,” retrievable across all channels.

DO: Collect and harness data

 

DON’T: Fear a privacy backlash.

Data and targeting capabilities are a loyalty program’s best assets, and the program itself can be used to effectively aggregate customer information that is otherwise untapped and siloed across an organisation. Data capture – both implicit and explicit, tying together online and offline – must therefore be a top priority for loyalty programs. Unfortunately, some marketers have shied away from using this data to create stronger offers, for fear of a privacy backlash. Privacy is overhyped relative to improving the customer experience. When offers are relevant and targeting is done well, negative repercussions will be minimal at best.

Brand examples: In some instances, brands are making the value exchange explicit. Lancôme’s Elite Rewards program gives points to customers who update their profile to include more in-depth personal data, such as address and gender, or those who sign up for a birthday email.

DO: Customise to markets

DON’T: Ignore local consumer behaviours and preferences.

It’s incredibly difficult to make loyalty work on a global scale. Brands must tailor strategy to local nuances while leveraging cross-market learning throughout the organisation.

Brand examples: Starbucks’ loyalty program, a model for all brands, spans 28 countries and is customized for each. In China, for example, Starbucks relies on gamification to drive participation. Starbucks’ U.K. program has the highest threshold to top-tier benefits and many more “soft benefits,” such as free add-ons like shots and flavours.

For more on how brands are raising the bar for loyalty programs, download a copy of L2’s Insight Report on Customer Engagement: Loyalty.

Latest News

Daylight Agency Appoints Shelley Hammond As Director Of Agency Operations
  • Media

Daylight Agency Appoints Shelley Hammond As Director Of Agency Operations

The Daylight Agency’s significant growth has continued with the appointment of Shelley Hammond as Director of Agency Operations. Shelley is a leader in the global communications industry and brings vast experience following senior roles in major corporates as well as the agency environment. Shelley will be responsible for the commercial running of Daylight including client retention and […]

Host/Havas Takes Out Cannes Grand Prix With Palau Pledge
  • Advertising

Host/Havas Takes Out Cannes Grand Prix With Palau Pledge

Host/Havas has secured Australia’s first grand prix award at Cannes overnight, taking out the top gong for the direct lions with its work Palau Pledge. The work, which sees all visitors to the tiny island nation have their passport stamped with a pledge to be a good environmental citizen, which they must sign before entering […]

by B&T Magazine

B&T Magazine
Ridley Scott Unveils New Directors Showcase At Cannes
  • Media

Ridley Scott Unveils New Directors Showcase At Cannes

Curated this year by Ridley Scott, famed director of Alien, The Martian and other classics, The New Directors Showcase at Cannes is now in its 28th year. Acting as a platform for talented new directors to have their work premiered to a global audience, Scott took to the stage in front of a full house […]

by B&T Magazine

B&T Magazine
ANZ, PHD & JCDecaux Harness The Power Of Data
  • Advertising
  • Campaigns

ANZ, PHD & JCDecaux Harness The Power Of Data

ANZ and media agency PHD have partnered with JCDecaux to launch a unique campaign that harnesses the power of data across three cities incorporating actual tram, train and bus timetable information to align with the new ANZ App.

Report: Consumers Are Hitting Play On Mobile Video
  • Technology

Report: Consumers Are Hitting Play On Mobile Video

Ooyala survey finds media companies created and processed nearly three times as much video content in Q1 as Media Companies Created & Processed Nearly Three Times As Much Video Content in Q1 2018 vs. Q1 2017.

MercerBell Calls In Two New Data Hires
  • Marketing
  • Technology

MercerBell Calls In Two New Data Hires

Proving many photos shot on an iPhone so often come out washed-out and grainy comes this article's accompanying pic.

Intrepid Travel Go Back 30 Years, Posting Classified Adverts In Newspapers
  • Campaigns

Intrepid Travel Go Back 30 Years, Posting Classified Adverts In Newspapers

Intrepid Travel has gone back in time and is placing classified adverts for a new ‘mystery expedition’ to places that yet mapped by Google.  The adverts to be placed in Courier Mail, Herald Sun and Sunday Telegraph are calling for intrepid people to join a journey with “long travel days, intermittent electricity, no Wi-Fi, cold […]

Watching tv and using remote control
  • Advertising
  • Media

GroupM Investment Forecast For Australia: TV On The Rise As Digital Slips

GroupM has updated its 2018 ad investment forecasts and released its initial 2019 outlook. GroupM predicts $24B in net new advertising investment this year, the best annual increment since the bounce back from the global recession in 2010 when $26B was added to investment. GroupM estimates total advertising investment will grow by 4.5 per cent this year […]

Indigenous Campaign Deemed Too Controversial By APN Media To Run
  • Advertising
  • Campaigns

Indigenous Campaign Deemed Too Controversial By APN Media To Run

Aboriginal Victoria’s campaign in support of Australia’s first-ever treaty legislation, Deadly Questions, has been deemed too controversial to run by one of Australia’s leading outdoor media providers, APN Media. Online platform Deadly Questions provides a safe space for people to ask questions and have them answered by Aboriginal Victorians, to learn more about their cultures, […]

Introducing: YouTube Music Australia
  • Technology

Introducing: YouTube Music Australia

The wait is over! Starting today, YouTube Music is available to everyone in Australia, New Zealand, the U.S, Mexico and South Korea in addition to 12 new countries including Austria, Canada, Finland, France, Germany, Ireland, Italy, Norway, Russia, Spain, Sweden, and the United Kingdom. Now fans around the world can find more of the music […]

Will PR Finally Earn Its Stripes At Cannes This Year?
  • Opinion

Will PR Finally Earn Its Stripes At Cannes This Year?

In this guest post, Haystac’s national general manager, Jason Carnew (pictured below), says with all this talk of Cannes at this time of year, it’s a kindly reminder that the PR business needs to get its act together in terms of awards, work and judging… All eyes on are Cannes as some of the best […]

Opinion

by B&T Magazine

B&T Magazine
Ex-DDBer Unveils Designer Headscarves For Cancer Survivors
  • Campaigns

Ex-DDBer Unveils Designer Headscarves For Cancer Survivors

Two-times cancer survivor, Frankie Good Stuff Award Winner, ex-DDBer and founder of Bravery Co. Emily Somers has collaborated with a range of top-notch illustrators to produce Australia’s first range of designer headscarves for young cancer warriors. She is now crowdfunding $40,000 to produce the scarves and donate one to all the young women in their 20’s […]

New Advertising Platform Launches Down Under
  • Advertising

New Advertising Platform Launches Down Under

Following its massive success in Europe, Asia and the UAE, the Polishoe concept, which brings a high-demand shoe polish service and HD digital advertising platform together, has landed in Australia.

Women In Media Profile: Aimee Buchanan
  • Media

Women In Media Profile: Aimee Buchanan

No Women in Media series would be complete without the irrepressible Aimee Buchanan. Read all her pressibles here.

by B&T Magazine

B&T Magazine
Set for blue sky, different clouds icons, cloud shapes, labels, symbols, icons. Flat graphic vector elements
  • Technology

PubMatic Unveils Cloud for Publishers And Tech Companies

PubMatic has launched PubMatic Cloud for publishers and tech companies looking to implement and control their own programmatic technology. By accessing PubMatic’s technology, global infrastructure and demand connections on a platform-as-a-service (PaaS) basis, clients are able to achieve full transparency and achieve greater control over their programmatic monetization. As programmatic trading becomes mainstream, innovations such as […]

Women In Media Profile: Claudine Hall
  • Media

Women In Media Profile: Claudine Hall

The Women in Media Awards are back for 2018! To celebrate this wonderful fact, and to recognise some of the killer women in our industry, we’ve created a women in media series – and have profiled some pretty inspiring women so far. This week, we chat with Bauer Media head of trade marketing Claudine Hall. […]

by B&T Magazine

B&T Magazine
Cancer Council and Target Tradies Tackle On-The-Job Skin Cancer Risks
  • Campaigns

Cancer Council and Target Tradies Tackle On-The-Job Skin Cancer Risks

Workers on construction sites receive five to 10 times more UV exposure every year compared to indoor workers. Target Tradies and Cancer Council have announced the launch of a partnership to help educate Australian construction workers about the importance of being SunSmart at work. With evidence showing that outdoor workers receive five to 10 times […]