Fierce Loyalty

Nov 23, 2011

To the casual observer, Loyalty Marketing has progressed from ground-breaking concept to “table stakes” over the past decade. The programs are seemingly everywhere and with the proliferation of social media tools and new payment products, it’s not as much how you can earn points, it’s how many you can earn.

Just this week, Shopkick, a mobile, location based rewards scheme targeted to the retail industry, announced that Shopkick members can now earn points while shopping with participating merchants while paying with a Visa card. Double dipping of this type is becoming more common throughout the business world. Hotel chains Hilton and Marriott pioneered the idea but today even making a reservation at and paying for the stay with a rewards credit card will earn a double dip.

Competition among loyalty programs is indeed becoming “fierce” and this was the title of a story in the most recent DM News which covered the landscape of loyalty programs in market today.

Noting the rapid pace of change in the industry today, industry leaders agree that loyalty is less about points for purchase and much more about engaging customers over a lifecycle and building loyalty by demonstrating that brands are listening to them.

Some brands have been listening to their customers indeed with JetBlue highlighted in the article for bringing together a panel of 15,000 members of its TrueBlue frequent flyer program to discuss and recommend improvements. GameStop also factored in voice of the customer heavily to create that program design.

Some of the best practices mentioned for loyalty programs to compete well today are unchanged from those at the core of the business, created over 20 years ago:

  • Listen to your customer, create dialogue
  • Use the data you are collecting for more intelligent marketing
  • Pay attention to how quickly consumers can earn rewards, too slow means they disconnect

The one factor which rises to the top of the list today is choice. Consumers are less patient than ever, have shortening attention span, and want to have more control over their reward options as well as ways to earn in a program. Social media is at the root of the invigorated need for choice as the world has been brought to our doorstep via our favorite browser.

Kobie’s work with Hawaiian Airlines was highlighted in the article as well, introduced as an example of how create of a 1,000 plus merchant network has given FFP members choice and flexibility as to how they can earn miles. The results, we can tell you, are outstanding and FFP members are highly engaged and showing increasing satisfaction rates as a result.

Yes, competition in Loyalty is fierce, but the sense of urgency that comes as a result of increasingly demanding consumers means that innovation abounds. As you will see in the DMA News article and if you look around a bit, you’ll agree that there is more innovation taking place at the intersection of loyalty and payments than ever before.