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12 BANDT.COM.AU FEBRUARY 05 2010 Loyalty programs are part of the direct marketing establishment. Many of these are household names: FlyBuys, Everyday Rewards, Frequent Flyer, Velocity, Myer One, Priceline Clubcard to name just a few. But do loyalty programs actually create “loyalty” in customers? To try and answer this, it probably helps if we have a definition of loyalty first. And here lies the problem. In the marketing world there does not seem to be one clear and uni- versal definition of customer loyalty. Instead, it’s something of a loose concept. On the one hand it can refer to regular behaviour – repeat purchase and “share of category” spending. But on the other hand, it can also refer to emo- tional connection – often expressed as brand “advocacy” and the degree to which a brand is loved. The truth is, loyalty is probably an uneven sprinkle of both, the mix of each dependent on the nature of the individual program. On this note, I asked Bernie Brooks, chief exec- utive officer of Myer, how he saw their loyalty card program Myer One working. He says: “Loyalty for Myer is expressed through customers' repeat purchases, irrespective of the marketing pressure generated by the competing brands. “We firmly believe Myer One reinforces and promotes increased loyalty in our customers – it encourages repeat patronage and attachment to the Myer brand through relevant offers and rewards. Our research shows that our loyal Myer One members are the most engaged with the Myer brand.” But one thing is certain – loyalty is complex and can have little to do with plastic cards, accu- mulated points and special member offers. The big question as I see it is what would hap- pen to customer loyalty if these hugely expensive loyalty programs ceased to exist? Would there be massive churn from a sudden rush of unfaithfulness, would brand equity suffer due to outbursts from brand detractors? Or would business carry on as usual, providing of course that a company had all the other mar- keting basics right, ie good products, good serv- ice, competitive prices, effective distribution etc. When it comes to true, deep, sustainable brand loyalty it may be that some loyalty programs are not worth the plastic cards they’re printed on. I know it seems like a long time ago, but only a few weeks ago we kicked off a new decade and with it lots of people took some time to reflect. I didn’t really get to it last year, so here are a few points of reflection from me with a distinct eye on the future – which should make up for the fact that I am running a bit late. Ten years ago planners were still obsessing over the now infamous single-minded proposition and I know that at my place of employment (BBH), we were regularly scrutinised over the cleverness of our propositions. Interestingly, we were also spending a great deal of time back then debating the possibilities for planning, but not a great deal of time talking about the future of advertising. To put it into context, Napster hadn’t been sued by Metallica, the iPod didn’t exist, YouTube wasn’t born yet and social media consisted of sending text messages to multiple contacts. What a difference ten years makes. Our entire industry has been revolutionised by the advent of new technology and all we talk about is the future. Anyway, let’s talk about what the future could have in store for the planning community and, on a broader scale, the communications cohort at large. As Stephen King (the godfather of planning, not the scary story guy) wrote “…in the end, the only constant thing may be the need for change.” Firstly, I think a greater breadth of solutions is definitely on the cards – I have talked about the need for interestingness previously, but it is now both a strategic imperative and a consumer demand to create genuine cut through. Don’t get me wrong: book-smart planners are definitely not going anywhere, but their scarcer multi-dimen- sional brethren will be in even higher demand. Secondly, the ability for more randomness will become a hallmark of the smartest thinkers and the most surprising brands. While we may have valued consistency and reliability in days gone by, our new ADHD brains don’t seem to cope with those traits very well anymore. Thirdly, I think we will all work a lot harder. Rigour is good enough’ culture we find ourselves in can’t possibly lead to the best work. Where we used to spend time interrogating a brand or prod- uct simply to find a compelling brand truth, perhaps now we need to spend more time pushing harder and harder to find the best solution possible. comment A QUESTION OF LOYALTY WHAT HAVE WE LEARNT? TO MAKE A COMMENT EMAIL [email protected] Adam Joseph Readership director, Herald Sun Melbourne Sudeep Gohil Strategic planning director and partner, Droga5 Sydney BT.FEB05.PG0012.pdf Page 12 28/1/10, 3:45 PM
