Loyalty Programs Haven’t Adapted To The Digital Age

Inspector. All artwork is my design. Thanks.    Up to date points-earned, statement for a Loyalty Card Reward scheme.
SHARE
THIS



Loyalty programs have not evolved for the digital age and are failing to engage consumers, says consulting company Capgemini Consulting in a new report ‘Fixing the Cracks: Reinventing Loyalty Programs for the Digital Age’.

The report lifts the lid on why active participation rates in loyalty programs are often low and why 89% of social media opinions on loyalty programs are negative.

Capgemini researched the loyalty programs of 160 global companies across seven sectors including retail, banking, consumer products, telecom, airlines, hotel chains and consumer electronics. In addition, Capgemini also conducted a scan of 40,000 consumer conversations on social media to gauge customer sentiment towards loyalty programs.

Standalone Infographic Content_Loyalty Programs

The research revealed that most loyalty programs follow a basic transactional philosophy where rewards are based on purchase. Only a small minority of programs recognise and reward consumers for engaging and interacting with the brand in other meaningful ways. Furthermore, most loyalty programs lack personalisation and fail to offer cross-channel redemption services. The negative social media sentiment on loyalty programs stemmed mainly from the lack of reward relevance, rigid reward structures, user experience issues with online channels, and poor customer service quality levels.

Key findings of the study reveal that loyalty programs are not evolving at the same pace as the digital age:

  • Just 11% of loyalty programs offer personalised rewards based on a customer’s purchase history or location data
  • 79% of loyalty programs use the mobile channel, and yet only 24% allow redemption through it
  • 97% of loyalty programs are based primarily on purchases made by consumers

Only 16% of loyalty programs reward customers for activities, such as taking online surveys, rating and reviewing establishments or referring friends to the program. Only 14% employ gamification mechanisms to reward customers.

Loyalty programs need to focus on driving customer engagement.

The report recommends that loyalty programs be seen within the larger context of a marketing strategy that is focused on driving customer engagement. Organisations need to look at each step of the loyalty program, from design to evolution, through the prism of engagement.

Mark Taylor, global lead for customer experience transformation at Capgemini Consulting said, “Brands need to revisit their approach to loyalty. For us, the key is to integrate the loyalty program into the overarching customer experience and to reward engagement as well as the simple transaction. Additionally, since relevance is the highest form of customer intimacy, offering advanced levels of customisation and tailored experiences will enrich loyalty programs and further encourage customer engagement.”

According to the research, fewer than one in ten loyalty programs (9%) offer point redemption across all channels. To be commercially successful, programs must engage customers across every customer touch point.

Seamless purchase experience at Sephora

The study cites Sephora’s “Beauty Insider” loyalty program which matches loyalty accounts with Sephora’s mobile app, as well as the Apple Passbook mobile wallet. This allows Sephora to provide a seamless purchase experience, where customers can track their purchases, view offers, and redeem reward points on the go via their mobile devices. The strategy has worked, with Sephora’s Passbook users purchasing twice as much and twice as frequently as the average Sephora customer.

To deploy successful, customer-engagement focused loyalty programs, Capgemini believes the following strategies should be employed:

  • Integrate loyalty programs with the overall customer experience
  • Deliver personalised customer experiences
  • Conduct “Social Listening” to understand customer needs
  • Reward members for social media engagement and advocacy
  • Use gamification techniques to drive deeper participation
  • Provide value beyond traditional rewards

For the “Fixing the Cracks: Reinventing Loyalty Programs for the Digital Age” report, through web-based research made in November and December 2014, Capgemini analysed current loyalty programs of 160 global companies around the world across seven business sectors (Hotels, Airlines, Telecoms, Banking, Consumer Electronics, Consumer Products and Retail).

In December 2014, it also conducted a scan of 40,000 consumer conversations on social media to gauge sentiment towards loyalty programs. Customer sentiment was analysed using sophisticated sentiment analytics tools. In order to get an accurate view of the sentiment, the scan looked at opinions expressed by users, and not at questions and neutral comments.

Latest News

Women In Media Profile: Kirsty Bloore
  • Media

Women In Media Profile: Kirsty Bloore

Bereft of any Monday motivation? Let today's Women in Media profile be like low-current electric waves to the brain.

by B&T Magazine

B&T Magazine
A golden opportunity! Lucky Numbers For Sale!
  • Marketing
  • Partner Content

A golden opportunity! Lucky Numbers For Sale!

In case you missed it last week, an ultra lucky phone number – 1800 80 80 80 – is up for sale. And it could be all yours!

Partner Content

by Customer Connect

The AppNexus Marketplace Launches Guaranteed Views
  • Technology

The AppNexus Marketplace Launches Guaranteed Views

AppNexus, the world’s leading independent advertising technology company, today announced the launch of Guaranteed Views, a marketplace product that changes the way advertising is bought and sold on the open internet. Guaranteed Views enables marketers and agencies to pay only for ads that are measured as viewable and is the first programmatic product that enables 100% viewable buying at scale outside of Facebook and Google.

Macquarie Media & ABC Score New Six-Year Cricket Broadcast Rights Deals
  • Media

Macquarie Media & ABC Score New Six-Year Cricket Broadcast Rights Deals

Cricket Australia (CA) has announced new six-year radio agreements with Macquarie Media and the ABC. The Macquarie Media deal includes coverage of all men’s international, women’s international and BBL matches in the 2018/2019 to 2023/24 seasons. Under the new agreement, Macquarie Media will broadcast more games on more stations than ever before, including the broadcasting […]

by B&T Magazine

B&T Magazine
Dentsu Aegis Network Predicts Australian Ad Spend Growth Of 2.8%
  • Marketing

Dentsu Aegis Network Predicts Australian Ad Spend Growth Of 2.8%

• Ad spend in Australia forecast to grow by 2.8% in 2018 , with main drivers of growth in Government, Retail, Finance and Gambling sectors. • Global advertising spend to grow by 3.9%, revised up from 3.6% in January 2018. • Digital to overtake TV for the first time, to reach 38.4% of global share (TV 35.5%). In 21 out of the 59 markets tracked, digital will be the leading advertising channel in 2018. • One quarter (25.2%) of global ad spend will be delivered through mobile devices for the first time.

Pac Mags Appoints New Client Strategy Director For Victoria
  • Media

Pac Mags Appoints New Client Strategy Director For Victoria

Seven West Media’s Pacific Magazines has announced the appointment of Emma Baston as client strategy director for Victoria. Baston has worked in senior digital media buying and planning roles at various agencies including UM Australia, Cummins&Partners and MindShare, with exposure across the strategy, communications and creative process. She has also worked at Facebook in a […]

Seamless pattern of a crowd of many different people profile heads. Vector background.
  • Media

SBS Launches Diverse Communities Content Initiative

SBS has launched the Short-Form Content Initiative, a commitment to providing increased opportunities for Australian creatives from diverse communities through the commissioning and production of content for SBS On Demand. SBS has partnered with five of Australia’s screen agencies, including Film Victoria, Create NSW, Screen Queensland, Screenwest and South Australian Film Corporation. The initiative aims […]

BIG W Unveils Toy Mania Via M&C Saatchi
  • Campaigns

BIG W Unveils Toy Mania Via M&C Saatchi

BIG W, the home for families, fun and entertainment, has today launched its annual toy sale campaign – Toy Mania. Running until 11 July, the campaign showcases the frenzy and hysteria that comes with the BIG W toy sale. It also highlights that buying toys can be just as fun as playing with them and […]

Datorama Launches AI-Supported Data Visualisation Tool ‘Data Canvas’
  • Technology

Datorama Launches AI-Supported Data Visualisation Tool ‘Data Canvas’

Datorama, a global technology company, today announced the launch of Data Canvas, a suite of new data visualisation capabilities within its Marketing Intelligence platform. Datorama Data Canvas leverages the power of artificial intelligence (AI) in a brand new way — to help marketers create expert-designed dashboards to tell compelling, data-driven stories. Datorama’s previous AI releases have […]

Who’s Looking The Goods At Cannes Lions 2018
  • Opinion

Who’s Looking The Goods At Cannes Lions 2018

In this opinion, Fjord lead Bronwyn van der Merwe (pictured below) discusses the work to look out for at Cannes Lions 2018. I fully expect there will be some staggering examples of creative brilliance at Cannes Lions this year, and I’d recommend anyone going resists having their attention pulled by projects that are largely based on […]

Opinion

by B&T Magazine

B&T Magazine
We Are Social Acquires Socialize
  • Media

We Are Social Acquires Socialize

We Are Social has acquired Socialize; however, it will not be renamed We Are Socialize or even Margaret for that matter.

Global Marketing Player adm Appoints Country Manager For Australia & NZ
  • Marketing

Global Marketing Player adm Appoints Country Manager For Australia & NZ

International marketing services business adm Group Ltd has appointed Matt Cave as its country lead for Australia and New Zealand. Cave (pictured above) has more than 25 years of industry experience in the Asia-Pacific region, and will be instrumental in driving adm’s expansion throughout Australia and New Zealand. With 26 offices in 19 countries around […]

Weploy CMO Ben Eatwell: “We Want To Help Businesses Challenge The Status Quo”
  • Media
  • Technology

Weploy CMO Ben Eatwell: “We Want To Help Businesses Challenge The Status Quo”

Weploy began with a shared realisation between two friends that recruiting quality staff had become too complicated and it was high-time so declutter the process. Based in Melbourne, the start-up combines Tinder-style online skills-matching with Australian job market, and in doing so, rids eager employers of the strenuous – and at times incredibly uncomfortable – […]

Nielsen Acquires Sydney-Based Media Analysis Business Landsberry & James
  • Marketing

Nielsen Acquires Sydney-Based Media Analysis Business Landsberry & James

Nielsen has announced it has acquired Landsberry & James (L&J), a leading media analysis and software company based in Sydney, Australia. L&J designs, develops and markets software across the entire media analytics, planning, buying and post analysis process for television, digital, radio, advertising expenditure and advertising creatives. Nielsen’s investment in L&J enables an unparalleled and powerful […]

Pac Mags’ Home Beautiful Partners With Harvey Norman To Launch ‘Cooks Co-Op’
  • Marketing
  • Media

Pac Mags’ Home Beautiful Partners With Harvey Norman To Launch ‘Cooks Co-Op’

Home Beautiful and Harvey Norman have partnered on a new content series which will transform a quintessential Aussie shed into a field-to-fork restaurant whilst showcasing culinary local heroes. In 2012, Martin Boetz (pictured above, right) – the chef behind the cult following of Longrain during his 13-year stint – escaped the bustle of the big smoke […]

Music Feeds & Purple Sneakers Join Forces
  • Media

Music Feeds & Purple Sneakers Join Forces

Music Feeds and Purple Sneakers have unveiled a new strategic partnership that will allow music industry and direct advertisers to extend campaign bookings across all Purple Sneakers digital platforms when booking with Music Feeds. Founded in 2005 by Martin Novosel as a club brand and events company, Purple Sneakers is a key player in the Australian […]

by B&T Magazine

B&T Magazine
Headway & App Annie Get Ready For FIFA 2018
  • Media
  • Technology

Headway & App Annie Get Ready For FIFA 2018

Headway, the leading data-driven media buying company, has teamed up with market data and insights company AppAnnie. Together, the companies have unveiled The App Marketer’s Guide to the World Cup – a whitepaper designed to help app marketers succeed. Every year, flagship sporting events are breaking the internet with increasing viewership and the 2018 FIFA World Cup […]

Twitter Makes In-Stream Video Ads Available To All
  • Advertising
  • Media

Twitter Makes In-Stream Video Ads Available To All

Social media giant Twitter has announced it’s making in-stream video ads available to all advertisers – including self-serve – across 12 markets, including Australia. The popular video format attaches pre-roll content in front of premium publisher videos and highlights. The 12 international markets where Twitter’s in-stream ads will be available are Australia, Brazil, Canada, France, […]

Australian Alliance For Data Leadership Appoints New CEO
  • Advertising
  • Marketing

Australian Alliance For Data Leadership Appoints New CEO

The Australian Alliance for Data Leadership (AADL) has announced the appointment of credentialled senior executive Stephen Porges as its new CEO. Porges currently sits on a number of company boards, has considerable public and private sector listed company management expertise, and has been instrumental in successful data-driven businesses. He also brings CEO skills gained at […]

Business , Nicola Lewis poses for a portrait in Surry Hills. Lewis is being appointed to run WPP's GroupM in Australia and New Zealand.  
Pic Jenny Evans
  • Media

Women In Media Profile: Nicola Lewis

GroupM investment chief Nicola Lewis is grilled in latest Women in Media profile. It's more a gentle simmer, really.

by B&T Magazine

B&T Magazine
Ego Pharmaceuticals Appoints Valtech Australia As Digital Transformation Partner
  • Marketing
  • Technology

Ego Pharmaceuticals Appoints Valtech Australia As Digital Transformation Partner

Australian dermatological skincare products manufacturer Ego Pharmaceuticals has appointed digital agency Valtech Australia as its technology and transformation partner following a competitive pitch. Valtech will design and build Adobe platforms, marketing tools and components that will become a central point for Ego Pharmaceuticals’ global digital marketing activities. The Valtech project will enable Ego to deliver […]

Long Live Our Weird Ideas
  • Advertising
  • Opinion

Long Live Our Weird Ideas

There was a time when weird ideas meant a trip to the priest's confessional and 10 Hail Marys. Thankfully, no longer.

Opinion

by B&T Magazine

B&T Magazine