The loyalty landscape is constantly shifting as bricks-and-mortar and online retailers try to build deeper engagement with consumers. We’ve got the latest loyalty program news to help you think strategically about your loyalty strategies. Customer Think looks at the liabilities and ROI of accounting for loyalty program points and the challenges of modernizing these popular consumer programs.
Bond Brand Loyalty’s 2017 Loyalty Report reveals a fascinating insight: member satisfaction drops immediately after loyalty redemption. It points to the critical need for ongoing re-engagement. SmartBrief looks ahead to what loyalty programs could look like in a future blockchain world where points and rewards could be exchanged, traded or easily redeemed when applied to other participating programs.
Recent research by Virgin Australia shows that two-thirds of consumers will be influenced in their credit card purchases by whether they may get loyalty points or not. Amazon Shopper Rewards program often allows members to use other company loyalty program points, such as Amex, Citi and Chase, to make purchases on Amazon.com. Analysts in a Benzinga post say McDonald’s rewards program may outperform its competitors because of high-frequency, low-cost purchasing.
Global payments provider Hyerwallet upgraded its free loyalty program interface and rewards catalog, and introduced preferred pricing for program partner services including Intuit, TelaMed Access and LegalZoom. Points International Ltd, owner of Points.com, got positive reviews from Zacks Investment Research.
Modernizing Loyalty: The Liability & ROI of Rewarding Engagement
Accounting for loyalty program points can present a challenge to organizations looking for ways to modernize their program by expanding beyond “spend and get” to reward for engagement. After all, the argument goes, points are a liability and creating more of them can’t be done lightly. This perspective will not only keep you from much-needed transformation, but will also keep your program from reaching its true potential. To understand why, let’s take a look at the logic behind loyalty programs in the first place, how marketers get trapped in accounting-related exercises, and last, how we can collectively break free to modernize our programs for a truly customer-centric rewards experience.
Discount vs. Loyalty Program
Prior to loyalty programs, companies would offer a discount to encourage sales. Discounts are customer neutral, meaning that anyone can redeem them — whether they are a new or existing customer. Intuitively, some customers are worth more to the business than others. However, discounts do not differentiate and are just as easily redeemed by loyal customers as they are by deal seekers.
Now, if an organization applied the same discount via accrued points to loyalty program customers, not only would they ensure a repeat sale, but they would create goodwill and build value in the relationship. The dollars are guaranteed to come back to the business when points are redeemed and even then, not all points will be used. Via customerthink.com
Surprise from 2017 Loyalty Report: Member Satisfaction Drops After Loyalty Program Redemption
While Bond Brand Loyalty’s 2017 Loyalty Report reveals that marketers are still missing opportunities to drive business results, a big surprise rose to the surface.
Loyalty360 caught up with Kyle Davies, director marketing research, Bond Brand Loyalty, to find out what the surprise was and other assessments of the report.
What is your biggest surprise from the study?
Davies: One of the biggest surprises is the fact that member satisfaction drops more quickly than we might have expected immediately after somebody has made a redemption. We would have expected somewhat of a ‘honeymoon period’ where satisfaction remains high because the memory of the redemption is fresh, however, results show that in many cases satisfaction starts to drop almost immediately and continues as the redemption gets further and further into the rear-view mirror. It really speaks to the importance of focusing on post-redemption re-engagement. Via loyalty360.org
Loyalty programs in a blockchain world
In a world of distributed ledgers, there is a shared data layer accessible to everyone. What that means is that, switching costs are essentially zero for the core product. As I shared before, I switched bitcoin wallets in approximately 40 seconds recently. That’s not something you can do with a bank, but you can do when your data is totally portable.
Going back to our airline example, what if I could port my entire travel history, average purchase price, favorite routes from the United app to the Delta app and then, with their intelligent agent, they could immediately assess the potential value of me as a customer and enroll me at the same (or better) level within their program? What if I could do that with every airline at the same time? Then loyalty isn’t what it used to be, is it?
So, my loyalty to an airline becomes a function of best price, best convenience, best experience, best perks/rewards for that immediate next flight. It’s almost as if loyalty gets shrunk down from the annual cycle (at least in the airline case) to the atomic level of the next flight. In a sense, loyalty become a real-time activity in the same way that disciplines like search engine marketing, demand gen, and crisis management have become. Via smartbrief.com
Frequent flyer points shape credit card use
The research revealed that Australian credit card use is motivated by loyalty rewards, with more than two-thirds of respondents saying they will make a decision to buy an item based on whether they will receive points.
It also found that the most appealing loyalty rewards for Australians are frequent flyer points and store vouchers.
The research found:
– 68 per cent of research respondents who have a credit card that earns loyalty points said they are more likely to use a service or purchase a product because they will receive points.
– The main reasons Aussie respondents chose to become members of loyalty rewards programs was to accrue points that they can exchange for store vouchers (64 per cent), and to accrue frequent flyer points they can use towards travel/flights (62 per cent).
– The most appealing loyalty rewards to Aussie respondents were vouchers that can be redeemed in store (71 per cent) and frequent flyer points that can be used for flights and upgrades (66 per cent).
– Generation Y, or 20-35 year olds, were the most point-hungry generation with 80 per cent of Gen Y respondents stating they are motivated to buy a product or service to earn rewards points versus 69 per cent of Gen X respondents and only 57 per cent of Baby Boomer respondents.
– Generation Y were also the most active users of their points, where one in four Gen Y respondents said they redeem their points more than six times a year, versus only 18 per cent for both Gen X respondents and Baby Boomer respondents. Via travelweekly.com.au
Amazon Rewards Shoppers With New Payment Option, But Is It Easy Enough?
If Amazon’s latest payment option makes one thing clear, it’s that the path to greater sales is reached not by following the dollar, but by following the shopper.
Make that the loyal shopper, or, at least, the loyalty-enrolled. Amazon recently invited shoppers who hold American Express Membership Rewards cards to use their accumulated points to pay for purchases at Amazon.com. And in doing so, it has ushered in a completely new way to sell products.
Actually, make that ways. Amazon has similar partnerships with Chase Ultimate Rewards and ThankYou from Citi. In the case of American Express, the feature automatically enrolls a cardholder’s card to the service, called Shop with Points at Amazon.com. The elegance of such a feature is its seeming seamlessness. If the shopper has been eying a new iPhone but couldn’t afford it, she can now offset the price or pay for it in full with her points. Via customerthink.com
Will McDonald’s Loyalty Program Fare Better Than Some of Its Peers?
According to Bond Brand Loyalty, the average individual owned 13.4 loyalty cards in 2016. However, a large portion of these cards are inactive. This highlights the importance of ensuring the program is a strong fit for the company.
Specifically, Senatore said loyalty programs work well “for products/services that are high frequency and where consumption is flexible.”
The analyst added, “We think MCD fits this bill better than some other concepts that have launched loyalty. This tends to mean that loyalty works best for concepts where [the] average check is relatively small (and/or customer income is high).” Via benzinga.com
Loyalty Program a Key Customer Trust Point for Abercrombie & Fitch
Although Abercrombie & Fitch is characterized as a work in progress, CEO Fran Horowitz believes that customer loyalty is at the heart of the company’s future.
“We leverage customer insights from our loyalty program and in-store research to engage with and respond to customers,” she said during the company’s recent first-quarter earnings call. “We have a fast-growing, highly engaging loyalty program. This full omnichannel offering has been successfully rolled out in the U.S., Canada, and the U.K. across both brands. We are now planning to roll it out internationally, including local language app throughout the remainder of 2017.”
Horowitz noted that a new ranking of 10 publicly traded retailers that have omnichannel capabilities from Total Retail, in conjunction with Radial, Abercrombie & Fitch tied for fourth place overall.
“In a constantly evolving environment, we are confident we have invested in the right foundation and capabilities to allow us to stay ahead of the curve and to deliver the frictionless omnichannel experience that consumers demand,” Horowitz said. “Loyalty programs have been a particularly important customer trust point for us. The successful rollout across the Hollister and Abercrombie brands provide timely customer insights, drive customer engagement and a meaningfully higher average level of customer spend.” Via loyalty360.org
Hyperwallet Boosts Its Loyalty Program
Hyperwallet, a leading global payouts provider to millions of independent workers, revealed today enhancements to its popular loyalty program, an integrated feature designed to improve payee engagement and offered to Hyperwallet clients free of charge.
According to a press release, the loyalty program will include an expanded rewards catalog and refined user interface, as well as providing payees with preferred pricing on several independent business services through partners Intuit, TelaMed Access and LegalZoom.
Introduced at the end of 2015, the program has been adopted by a number of Hyperwallet clients to increase brand awareness, boost payee retention and accelerate revenue drivers. Via pymnts.com
Zacks Investment Research Upgrades Points International Ltd (PCOM) to “Hold”
Points International Ltd (NASDAQ:PCOM) (TSE:PTS) was upgraded by Zacks Investment Research from a “sell” rating to a “hold” rating in a research note issued to investors on Saturday, May 6th. The brokerage currently has a $12.00 price objective on the information services provider’s stock. Zacks Investment Research‘s target price would indicate a potential upside of 24.35% from the company’s current price.
According to Zacks, “Points International Ltd. provides a range of e-commerce and technology services to loyalty program operators. It is the owner and operator of Points.com, the world’s leading reward program management Web site. Points.com is an online loyalty program management portal, where consumers can earn, buy, gift, share, swap and redeem miles and points with some of the loyalty programs and retail partners. Developed in partnership with Travelocity, Book with Points is a service, which allows consumers to search for, book and then directly pay for travel reservations using a mix of loyalty currency and cash with no blackout dates or capacity controls. The company has client or strategic operating relationships with the world’s leading loyalty programs. Participating programs include American Airlines AAdvantage program, Aeroplan, AsiaMiles, British Airways Executive Club, Wyndham Rewards, Delta SkyMiles and InterContinental Hotels Group’s Priority Club Rewards. Redemption partners include Amazon.com and Starbucks. “ Via thecerbatgem.com
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