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Growing Loyalty Beyond Traditional Reward Programs
The document outlines a paradigm shift in customer loyalty, emphasizing that loyalty is an emotional connection rather than a transactional one. It critiques traditional reward programs and suggests a more engaging, personalized approach through quality experiences, understanding customer needs, and innovative, iterative testing. By focusing on emotional engagement and continuous improvement, companies can foster deeper loyalty and enhance customer engagement.
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Growing Loyalty Beyond Traditional Reward Programs
- 1. TOWARDS REAL LOYALTY 12steps to real customer engagement GROWING LOYALTY Beyond Traditional Reward Programs
- 2. 2 LOYALTY IS ANEMOTION
- 3. …SO WHY DOWE TREAT IT LIKE A TRANSACTION?
- 4. WE HAVE BECOMEVICTIMS OF HISTORY AND HABIT 1700s COPPER TOKENS 1800s COUPONS 1930s - 70s TRADING STAMPS 1980s DEREGULATION 1990s DIGITIZATION 2000s MOBILE TOOLS
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- 6. IT MATTERS TOTHE 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 = RISKMARGINS -10% lower EBITDA
- 8. A DISCOUNT CARD ISNOT ENOUGH
- 9. ONE SIZE DOES NOTFIT ALL
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- 11. DOING THE SAMEAS OTHERS LEADS TO FAILING IN THE SAME WAY Customer engagement ROI over time
- 12. SO.. WHAT COULD BEDIFFERENT? HOW TO SHAPE YOUR FUTURE? WHERE DID IT GO WRONG?
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- 14. HOW DO YOUUSE WHAT YOU KNOW ABOUT ME?
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- 16. WHAT IF, INSTEADOF BUYING LOYALTY, WE RECLAIMED WHAT CREATES IT? Quality Meeting Needs Consistency Availability Enjoyment Recognition Value EXPERIENCE
- 18. WHAT WOULD DIFFERENTLOOK LIKE? Connected PersonalRelevant Contextual Customer Centered
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- 28. LOYALTY IS ANEMOTION 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
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- 35. SO.. WHAT COULD BEDIFFERENT? HOW TO SHAPE YOUR FUTURE? WHERE DID IT GO WRONG?
- 36. So how doyou break the cycle of self-abuse?
- 37. 1. CONTEMPLATE: WHATIS YOUR WHY?1. CONTEMPLATE: DEFINE YOUR CUSTOMER’s WHY
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- 39. 2. PREPARE: DESIGNTHE EXPERIENCE
- 41. BUILDING PROGRAM ELEMENTSTHAT DELIGHT CUSTOMERS Functional Reliable Usable Pleasurable Meaningful YAY! Convenient Focused on experiences Focused on tasks FEW PROGRAMS CROSS THIS LINE
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- 43. 3. TAKE ACTION:TEST AND EXPERIMENT TIME DEGREEOFCOMMITMENT Traditional programs Experimentation Moments of delight
- 44. Standard, static program Long cycles, thenrelaunch 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 PLATFORMFOR 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 TOCONTINUOUS 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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- 48. • Not allcustomers 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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