Loyalty 2.0: building deeper customer relationships.

Siobhan Lynch
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On: 7 Nov 2019
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Loyalty

Siobhan Lynch is loyalty manager at Three’s award-winning 3Plus loyalty programme. Siobhan recently won the Marketing Institute’s All Ireland Marketing Award for 3Plus, which has 750,000 users and over 150 partner businesses across Ireland. For business owners considering establishing a rewards programme or partnering with a third-party loyalty provider, Siobhan shares insights from Three’s programme and from industry best practice.

Research shows that it’s much more cost-effective to keep an existing customer than to acquire a new one. Customers are 84% more likely to stick with a brand that has a loyalty programme, so there’s a strong business case for businesses to operate a reward scheme or loyalty programme. But the concept of a loyalty programme is evolving.

What we’ve found in the Irish market over the past couple of years is that traditional points-based reward programmes are becoming less effective. So, what will the future of loyalty programmes look like?

A big theme in loyalty right now is that some companies are choosing to create a more emotional, personal connection with their customers, rather than merely transactional relationships with them. This is a really interesting concept that came up many times during the recent Loyalty Summit conference that I attended in London. For businesses looking to capitalise on this trend, there is an opportunity to find new ways to connect with customers.

Winning at loyalty.

Now is a perfect time to do something different. The companies that are winning in the loyalty space have got a few basics right. They make it easy for customers to access and use the programme, and to understand what’s in it for them. They keep the content, rewards and offers interesting and relevant. Companies that promote and communicate with their customers on a personal level are yielding greater results.

The big winners will be the companies whose main access point with customers is via an app. This is a great way to reach the 93% of Irish people who own a smartphone. Smartphone usage is highest among young consumers of ‘Generation Z’, so if your target audience is among this group, then it’s worth considering apps as a way to engage with them.

Immediate reward.

From analysing the figures from our own loyalty programme 3Plus, we have found the offers that work best are ones that offer a clear return to the customer, such as an immediate reward like a discounted meal at a nearby restaurant (dining out offers have always been a popular category with our loyalty programmes). Competitions work very well as a way to entice customers to take part in a loyalty programme. Gamification is another way to make loyalty programmes fun and a simple way to reward customers for their tenure. 3Plus offers ‘badges’ that reward customers for tenure and engagement with the programme , and some of those badges unlock rewards.

Location-based rewards.

Geolocation is the newest innovation in loyalty technology to help deliver greater value to customers in their loyalty apps. Because it’s triggered by the customer’s location, this feature can drive increased footfall to a store, restaurant or entertainment venue. For example, while a person is walking down a retail high street, the app can detect their location and automatically update to show local offers; for example, if you are based in Mallow but travel to Galway, offers for Galway will automatically appear.

Personalised offers.

Geolocation helps to make offers highly relevant and personalised to the customer, since they relate to where they are at that moment. It’s all about understanding the customer better and developing a value proposition that resonates with them and meets their needs. From our experience, businesses that communicate with customers on a personal level; that is, providing rewards that relate to the person’s offer redemption history and location ensures higher uptake.

Features like geolocation and push notifications (in app messaging capability) are subject to the customer’s consent, but the beauty of apps is that they allow companies to easily test, experiment and learn as they go. For instance, regularly changing the rewards on offer through this feature is a way to ensure that customers keep checking in on the app.

 Ease of engagement.

At the recent loyalty conference in London I attended, Shell’s new rewards programme was showcased as an example of a simple, easily understood successful loyalty programme. Not only does Shell reward customers every time they refuel (instead of after 10 stops, for example), it also rewards customers who go in-store and make a purchase. The more they buy, the bigger the reward. The app is driving real brand engagement in Shell’s customers, while increasing the chances of repeat purchases.

Simple sells.

The features in apps that are available now, dovetail with the trend in loyalty to keep it simple, interesting and make the value exchange clear, with relevant offers that resonate with the customer on a personal level. The beauty about apps is that they allow companies to “delightfully surprise” customers, like sending push notifications in-app. Ease of use is critical. Cool features like augmented reality (AR) can help to act as a trigger to get the customer to sign up.

 The partnering approach.

Some businesses can be deterred by the technical elements and the cost involved in establishing a loyalty programme. The quickest and most effective way forward can be to partner up with an existing scheme who work with nationwide and local partners to be able to continually refresh offers. Customers gain from having rewards for staying loyal; brands benefit because the rewards drive footfall to their stores. It’s a win-win.

The best, deepest and most lasting relationships are ones that are much more than simply transactional. Leading brands are discovering this as they move away from points-based customer loyalty programmes towards a more meaningful dialogue with consumers. Loyalty works best when it delivers the right message to the right customer at the right time.

If you are interested in learning more about Three’s loyalty programme, visit here.