Growing Loyalty Beyond Traditional Reward Programs
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Transcript of Growing Loyalty Beyond Traditional Reward Programs
TOWARDS REAL LOYALTY12 steps to real customer engagementGROWING LOYALTYBeyond Traditional Reward Programs
2
LOYALTY IS AN EMOTION
…SO WHY DO WE TREAT IT LIKE A TRANSACTION?
WE HAVE BECOME VICTIMS OF HISTORY AND HABIT
1700sCOPPER TOKENS
1800sCOUPONS
1930s - 70sTRADING STAMPS
1980sDEREGULATION
1990sDIGITIZATION
2000sMOBILE TOOLS
WE CONTINUE TO INVEST…
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
-1% revenue growth
DONE WRONG =RISK MARGINS
-10% lower
EBITDA
A DISCOUNT CARD IS NOT ENOUGH
ONE SIZE DOES NOT FIT ALL
LOYALTY NEEDS NURTURING
DOING THE SAME AS OTHERS LEADS TO FAILING IN THE SAME WAY
Customerengagement
ROI over time
SO.. WHAT COULD BE DIFFERENT?
HOW TO SHAPE YOUR FUTURE?
WHERE DID IT GO WRONG?
HOWWHAT WHEN
HOW DO YOU USE WHAT YOU KNOW
ABOUT ME?
ENTERTAINEDUCATE
ENGAGE
WHAT IF, INSTEAD OF BUYING LOYALTY, WE RECLAIMED WHAT CREATES IT?
Quality
Meeting NeedsConsistency
Availability
Enjoyment
Recognition
ValueEXPERIENCE
WHAT WOULD DIFFERENT LOOK LIKE?
Connected
PersonalRelevant
Contextual
Customer Centered
CONTEXTUAL
PLACEPURPOSE
PERSONAL
RELEVANT
EXPERIENCES
SERVICEACCESS
PRESTIGEPRODUCT
PRICE
54%More spend
2xMore referrals
83%More Engaged
CONNECTED
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
29
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CUSTOMER-CENTRED
Big Data
Ubiquitous Touch
Cloud
Insight Engage Anywhere
Responsive Adaptable
Data Ubiquitous Touch
Cloud
SO.. WHAT COULD BE DIFFERENT?
HOW TO SHAPE YOUR FUTURE?
WHERE DID IT GO WRONG?
So how do you break the cycle of
self-abuse?
1. CONTEMPLATE: WHAT IS YOUR WHY?1. CONTEMPLATE: DEFINE YOUR CUSTOMER’s WHY
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2. PREPARE: DESIGN THE EXPERIENCE
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
3. TAKE ACTION: TEST AND EXPERIMENT
TIME
DEG
REE
OF
COM
MIT
MEN
T
Traditional programs
Experimentation Moments of delight
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
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
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