The widening gap of loyalty programs

Mind The GapTravel and other loyalty programs are going through challenging times. Programs that floated along for decades, blissfully counting up points based on spend, transactions, nights or miles are suddenly finding themselves in an increasingly mobile, connected world that allows for something more.

The problem isn’t that traditional loyalty programs haven’t answered the call. The real challenge arrives unexpectedly when smarter companies come up to speed quickly with modern platforms and programs that are more engaging and effective.

The North Face

Look no further than The North Face, where the VIPeak program rewrites the way customers are engaged around their passions and not just their purchases. The North Face knew that staying competitive in the changing landscape of business required taking a new look at the customer and what creates for them a more enjoyable and meaningful experience. This is ultimately the only way to create a greater lifetime customer value for the brand.

Who’s next?

Companies that understand this will change course, but it won’t be an easy thing to recognize. Existing loyalty programs are self-reinforcing and continue to deliver value to brands even as customers shift to more engaging experiences elsewhere. The temptation is to double down on existing programs with the theory that more effort will deliver more value—but it won’t.

As consumers experience programs like that of The North Face, the luster of simply earning points based on purchases goes away. New and innovative programs are opening the customers’ eyes and setting new expectations. Loyalty is the new field of competition and no longer a place where each brand matches the next step for step.

This means loyalty has become something much more dynamic than in the past. It has to evolve with the consumer and the competition. It stops being a hard-coded application, implemented and changed with teams of technology people, and becomes a platform that faces the business—flexible, nimble and cloud-based. It looks a lot like Loyalty Lab Reward.

To learn more, sign up for our webinar on Tuesday, April 30, Customer Loyalty Management: Marrying the Art and Science of Loyalty.

This article first appeared on the Loyalty Lab blog.

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Categories: Loyalty, Marketing

Author:Jeanne Roué-Taylor

I'm fascinated by disruptive technology and its impact on our world. I manage sales operations for an excellent startup with a unique team of highly experienced data scientists.

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3 Comments on “The widening gap of loyalty programs”

  1. April 25, 2013 at 9:50 am #

    Loyalty schemes as they are (the majority) are in for a big shock in the next few years. Not so much because they no longer work, rather consumer expectations and demands change and increase, especially when technology gets thrown into the mix.

    For me the keys to a good loyalty program will include delivery that works best for consumers, making loyalty more personal while also facilitating more social aspects. Its also important to remember that your loyalty program wont necessarily demand “space” on a consumers mobile in the form of an app. So partnerships with others who do have apps on consumers devices are a far more sensible approach.

    Offerings like Zync Wallet (digital wallet for smart phones) really are disruptive in terms of loyalty, payments and what consumers will come to expect. BUT there is a massive opportunity for businesses to get involved and not get left behind.

    Smart businesses will see the potential and value of digital wallets, especially those that offer added value, and added opportunities to deliver new forms of loyalty, customer expectations and retention.

    • April 25, 2013 at 9:54 am #

      Excellent comments, Andrew. What would you recommend smart businesses do in the next 30 days, 90 days and over the next year?

  2. April 25, 2013 at 10:10 am #

    In the next 30 days, I would start to look at what offerings are coming to the market that they can partner with to deliver their loyalty schemes through. I mention Zync Wallet as one example, but there will be others out there (not necessarily even digital wallets).

    Start to investigate how current loyalty scheme investments can be leveraged and integrated with – so that they can evolve. In todays world of web services, there are real powerful integration possibilities out there. You should also be talking to guys like Zync Wallet, see what they can provide for you, how they will help your loyalty evolve, how it will become more personal and how they add value to your current loyalty investments.

    Within 90 days, I would hope the business has identified modifications they need to make to enable their loyalty schemes to be partnered with. Then its a matter of mind set, understanding how to administer your loyalty scheme, how to leverage the data you get back to start making smarter decisions in terms of marketing, personalisation etc.

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