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The Future of Loyalty Insights from Discussions Building on an Ini4al Perspec4ve by: Christopher Evans | Director | Collinson Group
Context The ini4al perspec4ve on the Future of Loyalty kicked off the
Future Agenda 2.0 global discussions taking place through 2015. This summary builds on the ini4al view and is updated as we progress.
Ini4al Perspec4ves Q4 2014
Global Discussions Q1/2 2015
Insight Synthesis Q3 2015
Sharing Output Q4 2015
Loyalty Experiences For brands that aspire to crea4ng customer loyalty in this disorderly world, there is a fundamental ques4on that needs to be addressed.
Quite simply, what will ‘loyalty’ be?
Beyond Loyalty Brands may have been mistaken in assuming that ‘loyalty’ behaviour was
ever more than ephemeral. The challenge lies in understanding the consumer of the future, and their redefined needs and expecta4ons.
The Personal Data Dilemma Lurking ominously in the background there is also the ques4on of to
what extent consumers will allow us to collect and use their personal informa4on, and what they will expect in return?
Diluted Value of Loyalty Consumers will increasingly face the problem of having a wallet fat with loyalty cards. In this scenario, the value of loyalty may become diluted, the consumer may become overloaded, eventually disengaging from loyalty altogether.
Pointless Points Will the ability to make prices dynamic, rewards instant, and responses to consumer demands individually relevant, all mean that tradi4onal loyalty models become meaningless or (to use an excrucia4ng pun) pointless?
Brand Alliances We will see a set of consumer expecta4ons that brands will no longer be able to deliver alone. Strategic brand alliances, designed to deliver sophis4cated
choice and content, to complex consumer needs, are likely to emerge.
Consumer Power The consumer is likely to gain the upper hand in terms of
the power dynamic and principles such as ‘great customer service’ will no longer be a nego4able.
Extreme Customer Centricity Customer engagement will become a core func4on that cuts across tradi4onal silos, and helps to focus en4re businesses on the contextual needs and value opportuni4es for different audiences at different stages of a customer journey.
Dynamic Experiences Consumers ideas of u4lity value and expecta4ons of loyalty move from a
recogni4on of the value in standard loyalty proposi4ons to dynamic, exci4ng, changing and variable experiences that are ‘here today’ and ‘gone tomorrow’.
New Value, Different Models In the coming years, brands will need to be disrup4ve in their thinking about loyalty, seeking new kinds of value proposi4on, exploring different models
and redefining the very ways in which loyalty is conceived.
Device is King, Consumer is Queen Whether on devices or in the cloud, our digital repositories will know who we are, where we are and what we redeem. Businesses need to understand these new intermediaries and how they define our rela4onships with their brands.
Rewarding B2B Loyalty Leveraging high-‐value rela4onships between corporates means going beyond ‘more savings’ for loyal customers. B2B rela4onships come to resemble the more qualita4ve interac4ons already found between customers and brands.
PredicIve Not RetrospecIve Tradi4onal loyalty rewards and schemes involve measuring past customer behaviours and transac4ons. In the future reward could be linked to the predic4on or presump4on of ways customers might behave in the future.
Tension with RegulaIon Some regional regulatory interven4ons protect consumers whilst others prevent innova4on by limi4ng use of new technologies. A power struggle
between brands and government emerges around wider data sharing and use.
ConInuous Proof of Loyalty Brands have to consistently demonstrate their loyalty to consumers
as customer mobility and switching between brands increases. Global, regional and local affilia4ons blur and drive wider brand consolida4on.
The Voice of Youth Younger consumers are more difficult to pin down but they are more willing to share. Brands can speak to the youth in these terms, crea4ng opportuni4es for interac4on, but also more personal, human, experiences and rela4onships.
The Composite Consumer Flexible digital iden44es allow consumers to connect with each other even as they connect with brands. Loyal rela4onships will be made not just with individual customers but also with families, couples, and groups of friends.
10 Seconds of ANenIon Increased consumer choices and channels leave brands figh4ng for 10 seconds of a`en4on. A new paradigm will emerge, based on dynamic, fast-‐moving, calls to ac4on rather than long-‐term rela4onships with delayed rewards.
CounIng the Costs of Loyalty Keeping customers loyal is increasingly expensive. Brands will learn to
differen4ate between the ‘truly’ loyal and the merely ‘conveniently’ loyal, in order to maximise the value in maintaining costly long-‐term rela4onships.
Loyalty from Top to BoNom Driving an authen4c loyalty offer will require companies to address the rising promiscuity of employees. Organisa4ons will have to make a choice between facilita4ng increasingly flexible career-‐paths, or nurturing internal loyalty.
Polyamourous Loyalty Brands begin to embrace customer promiscuity, finding ways to recognise their emergent desire to build a patchwork iden4ty
through diverse and conflic4ng choices.
The Human Touch In a world of global and digital marke4ng and consump4on,
consumers will increasingly favour those brands that can offer more emo4onal engagements, and specifically human-‐to-‐human contact.
Love: Warts and All With corporate transparency becoming a necessity, businesses have to
address it as both an opportunity and a threat. Successful brands will find ways to take customers with them -‐ even as they reveal their less a`rac4ve sides.
The Sharing Economy will be RegulaIon-‐light Consumers will become more loyal to business models that connect them to other people. Personal rela4onships will dominate -‐ but within the safety of recognised global networks that act as insurance/reassurance for users.
TransacIonal vs. EmoIonal Seamless payments will distance consumers from understanding
monetary value. Brands will have to reconsider the way they connect to customers providing more holis4c and emo4onal value.
Customers Before Shareholders Driven by changing views of their social value, corpora4ons will
increasingly seek to focus more on real customer needs and so decrease emphasis on short-‐term pressure from shareholders.
Dreaming of Humanity The norm will be automa4on: machines will respond to humans who
respond to machines. Human interac4on will only be used to problem-‐solve and provide more personalised and premium services.
Combining Neuroscience and Big Data Organisa4ons will take the opportunity to exploit innova4ons in
neuroscience, wearable electronics and big data to provide enhanced customisa4on in the design and delivery of new products and services.
Personal Data Store Led by developments in authen4ca4on systems, new personal data pladorms migrate into the world of marke4ng. These lead to seamless and universally accepted creden4als stores that share data with mul4ple brand partners.
Cultural Relevant Conundrum In an increasingly global and diverse world how will brands embrace na4onal consciousness and touch consumers whose na4onal iden4ty is disconnected
to where they live? How will brands reconnect with the diaspora?
Up Close and Personal Consumers are increasingly in the driving seat and aware of the use of their
data. We may see loyalty U-‐turn: With greater transparency in place, brands will have work ensure consumer loyalty not the other way around.
Brand vs. PlaVorm Loyalty Digital pladorms will be both friend and enemy to brands. Pladorm-‐based loyalty may threaten tradi4onal brand loyal4es. Brands will respond in
different ways, with temporary price wars perhaps giving way to new alliances
Loopy ∞ Loyalty Brands will move beyond closed-‐loop transac4ons with individual customers,
and seek to engage with social groups, especially on digital pladorms, enabling con4nuous product and service itera4on based on p2p/c2c sharing.
China: “From Blood to Business” Businesses in China have long operated on the principle of making the kinds of rela4onships with customers that are sought with family. They will bring
this thinking to loyalty, reimagining brand-‐consumer rela4onships.
China: Leapfrogging and Expanding Innova4ons in technology and social media pladorms in China will mean that China leapfrogs tradi4onal loyalty models and creates
loyalty models that are innova4ons for the whole world.
Government IntervenIon With loyalty pladorms increasingly u4lising personal data – and social media pladorms providing private spaces for poten4ally undesirable behaviours –
government interven4on in loyalty models becomes more likely.
Loyalty is Convenience Loyal customer behaviours may be revealed starkly as being nothing more than convenience. In a world where consumers are agile and
empowered – the most convenient op4ons will win.
Rise in Religious Followings There is a rise in the number of conserva4ve religious communi4es – some
genuine, some underground. These heighten regional tensions but also act as a catalyst to open or change viewpoints to pragma4cally suit local needs.
Extreme Faiths Religion con4nues to be a powerful galvanising force defining our values, ac4ons and iden44es -‐ but in some regions is increasingly polarising.
Fana4cism con4nues to rise -‐ amplified by social technologies.
Sport Entertainment Changing consumer life-‐styles and shorter a`en4on spans, linked with more connected and influen4al fan-‐bases, combine to see a more commercial
spor4ng landscape, triggering the birth, evolu4on and destruc4on of sports.
Live Experiences Live sport and fes4vals are put on a pedestal -‐ a`rac4ng cross-‐overs with other industries and greater technical innova4on to enhance
fan interac4vity and audience engagement.
More Niche Groups More alterna2ve groups, niche cults and ideologies bring together like-‐minded people from across tradi2onal boundaries. Brands adapt to this rise by crea2ng
more niche product categories catering for smaller, dispersed 'tribes’.
Trusted Reviews Social peer review data is combined with other qualita4ve insight, to separate
the authen4c reviews from the fake and 'bought’. New regula4on in the review space also helps create equal opportuni4es to compete for trade.
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