Loyalty Programs: Going Beyond Transactional Rewards

Lisa Evans

Vice President, Analytic StrategyKBM Group

of CEOs are looking for new ways to stimulate customer demand and loyalty this year.(PWC, Global CEO Survey 2013)

82%

“The actual shopping, interactions and flow…and rewards…all are supported with orchestrated media, providing the stories that people can gather around.” (Forbes, 1/3/13)

27%Enrollment

4%Participation

(COLLOQUY Loyalty Census 2013)

Financial Rewards Emotional Loyalty

Monetary rewards are expected but are not enough to build deeper brand loyalty.

• Maslow was right—people need achievements and respect.

• Behavior-based recognition is rising fast.

Constant Evolution is Required

Engagement has to constantly evolve to stay interesting• Changing reward

types• Surprising with

unexpected rewards

New Level of Customer Expectations

Expectations of experiences are determined by what have now become ubiquitous brands.

Customers are increasingly expecting the same type of experience regardless of their role as an individual (B2C) or organizational buyer (B2B).

Business to People (B2P)

Behavior Drives Loyalty

ProgramRecognizes

Program Rewards

Members Transact

Members Interact

Traditional Programs

Transact & Interact

Members Transact

Members Interact

• Purchase/spend• Save• Recycle

• Social referrals• Retail shop interactions–show

up• Play games• Watch videos• Take a quiz/poll• Social entertainment check ins&

Reward & Recognize

ProgramRecognizes

Program Rewards &

• Travel• Experiential• Merchandise• Gift Cards• Charitable Donations• Discounts• Cash

• Product Influence• Special Content Access• Social Currency• Status Rankings• Virtual Badges• Targeted

Communications• Thank You

Social Connectivity Increases Perceived Value

Source: Badgeville

Set a High Bar

InsightLoyalty

Experience

Online Experienc

e

Design Within the Customer Experience Ecosystem

Insight– • The core of the experience • Drives the insights for each

individual customer

Online Experience – • Tailored to user• Provides the single online

experience for all marketing programs and activities

Loyalty Experience – • Beyond awarding points• Experience associated with

being a loyal customer

Defined by marketing strategy and outlines the foundation for solution-geared

experiences

Experience Ecosystem

Experience Components

Loyalty

Recognize “Best”

Customer

Dialogue is Critical

Give the Customer

Control

Go Beyond

Financial Rewards

Know Your

Customers

Reward Engagement not

just Transacti

ons

Emotion Moves

People to Action

Loyalty Program Best Practices

Tier 1VIP

Tier 2Growth Customer

Tier 3Low Potential Growth Customer

Loyalty PathContentRewards

ConnectivityCommunications

Increasing Program Value

Low

Engagement Level

High

Key Program Pillars1. Content Provisioning (owned, access, earned)1. Content Provisioning (owned, access, earned) 2. Personal/Peer Connectivity2. Personal/Peer Connectivity

3. Surprising Content/Rewards3. Surprising Content/Rewards 4. More Loyal, More Willing to Pay4. More Loyal, More Willing to Pay

Solutions for emerging topics; surprise and delight “rewards”

Facilitate personal/peer connectivity; integrate social sign-on

Traditional Loyalty

Traditional:Give More

Away to BestCustomers

Price ofPerceived

Value

Modern Loyalty

LoyaltyProgram

Be Curious

Transaction

Social

Lifestyle

Digital

Seek and Apply Insight

Social Listening Inspires Program Innovation

Reward Portfolio Optimization

Media Targeting

Program Objectives

Member / Non Member Insights

Program StructureQuantitative Insights

• Hard Benefits / Currency• Social Audit• Engagement (social, mobile, email)

Program Design / ROI

Implementation Planning● Test Design● Communications Plan

Measurement

Concept DesignQualitative Insights

• Soft Benefits / Currency• Enrollment / Redemption Process

Program Design Process

How Does Your Program Stack Up?

Your Market

Your Business

Your Customers

Q & A

Lisa EvansVice President, Analytic StrategyLisa.Evans@kbmg.com