It is important to understand consumers and how to assess one’s position relative to competitors, both direct and aspirational. Everyone is facing challenges, and to gain insights brands need to understand what those challenges are and ground themselves in the struggles that they, and consumers, are facing from a day-to-day perspective. Kobie’s Director of Partnerships, Kelli Graf, brings those struggles into the light and gives concrete examples of brands that are surmounting these challenges and doing it well.
Loyalty is a crucial aspect for businesses, and it can be seen through three lenses: behavioral, emotional, and transactional data. Behavioral data is based on customer actions, emotional connection focuses on fostering trust and loyalty, while transactional data analyzes purchase and reward information. Rather than investing equally in all three lenses, businesses should focus on areas that align with their consumers and brand. “If you were focusing your time, energy, and ultimately your money, on over-indexing and all three of these lenses,” says Graf, “you probably wouldn’t be doing any single one of them effectively.”
By monitoring and benchmarking over 200 loyalty programs, Kobie provides businesses with insights into consumer behavior and helps them make informed decisions based on objective analysis. The assessment process is data-driven, and it allows businesses to track and compare their loyalty strategies with competitors across different industries. By understanding these benchmarks, businesses can identify opportunities and optimize their loyalty strategies to better serve their consumers. As Kobie’s data-driven process reveals insights into consumer behavior, businesses can make informed decisions based on objective analysis.
How Does Your Brand Measure Up?
The North Face
To drive consumer behavior, brands must establish an emotional connection with customers by aligning loyalty strategies with consumer expectations. By connecting the emotional aspects of loyalty programs with the value system of consumers, brands can motivate them to change their behavior and become more loyal. North Face is a prime example of a brand that excels in emotional connection and understands the importance of this aspect in their strategy. Focusing on aligning with consumer values establishes a strong emotional connection and drives loyalty.
North Face offers consumers Curated Experiences, Special Access, Personalized Content, and Community Elements.
Mandarin Oriental Hotels
Mandarin Oriental excels in providing soft benefits that enhance the emotional connection and empowerment of its guests. In addition to standard benefits, such as early check-in and elevated Wi-Fi, the brand offers unique options like complimentary clothing pressing services and credits and discounts for spa services. These offerings go beyond the expected, creating a more luxurious and personalized experience for guests. Mandarin Oriental’s success in incorporating soft benefits demonstrates the importance of providing a well-balanced blend of value proposition and benefits to establish an emotional connection with customers.
Mandarin Oriental offers consumers Benefit Optionality, Elevated Choice, Charity, Social and Donation Features, and Gamification.
It is important for brands to not only offer an experience but also bring it to life in a comprehensive manner. As customer expectations continue to rise, it is crucial to prioritize delivering exceptional experiences that cater to individual needs. L’Oréal stands out for its customer-centric approach and personalized experiences. Their app, Prezzo, allows users to upload a selfie and request a custom sample of foundation or lipstick based on personal factors like UV index and skin lesions. The samples are delivered to the user’s home and stored within their profile, eliminating the need for makeup shopping. L’Oréal’s focus on personalization has given them an edge over competitors.
L’Oréal offers consumers VIP Experiences, Experiential Benefits, Consumer Centricity, and Member-only Services.
Transactional data refers to the rewards, value, and tangible benefits that customers receive from a loyalty program and is all about the earn and burn. The data showed that Chase Sapphire is excelling in transactional loyalty and what sets them apart is their comprehensive strategy, which includes features like householding and pooling, as well as a multi-earned structure. This allows them to over-index on transactional loyalty. The implication of these findings is that reward attainability, flexibility, and competitive relativity are crucial factors that can drive customer transactions, retention, and incremental shopping. By focusing on these elements, companies can differentiate themselves and create more effective loyalty programs.
Chase Sapphire offers consumers Household/Pooling, Acquisition Offers, Multi-earn Structure, Referrals Bonus, Competitive Payout Rate, Redemption Options, Partner Benefits.
Burger King has proven itself to be a leader in providing hard benefits to its customers by implementing a data-driven program that offers discounts, coupons, and multiple redemption options. This program allows customers to stack benefits and choose from up to 70 different options and redemption combinations. Burger King also incorporates gamification elements into their program, such as point multiplier challenges and free items for spending as little as $1. This strategy not only drives customer engagement but also generates significant profits for the company. By consistently delivering on these hard benefits, Burger King stands out from its competitors and creates a sense of attainability and instant gratification for its customers. This successful execution of hard benefits demonstrates the power of data-driven marketing strategies in creating compelling customer experiences.
Burger King offers consumers Rewards & Points, Promotions, Discounts & Offers, Real-time Rewards, Point Multiplier Challenges, and Reward Stacking.
Data collection, and strategic utilization, are extremely important and Stitch Fix excels in this area. Stitch Fix is shown to be over indexing on data collection, collecting 1.5 times more data than the benchmark and making it easy for customers to update their preferences and information. They use zero party data collection, forcing customers to provide updated information consistently and are praised for applying and leveraging the collected data effectively, providing personalized experiences in real-time. It is the application of collected data that brings value and monetization. Include machine learning, tools, and partnerships and brands can truly make the most of their data collection efforts.
Stitch Fix offers consumers Communication Preferences, Personalized Communications & Experience, Content Preferences, SMS Opt-In, and a Personalized Welcome.
Data collected: Date of Birth, Mobile Number, and Email Address
Behavioral loyalty refers to the end-to-end customer experience, including the app, online, and personalization. Starbucks is often cited as an example of a company that excels in behavioral loyalty, but Hilton is outperforming the industry index in this area. Hilton has focused on creating a frictionless experience for customers, both in the mobile app and online. For example, they offer a digital key card that allows guests to easily access their rooms without the need for a physical key. This attention to detail and seamless integration has contributed to Hilton’s success in behavioral loyalty. It is important for businesses to prioritize personalization as well, ensuring that customers feel understood at every touchpoint. Hilton’s emphasis on personalization and creating a seamless experience sets them apart from others in the industry.
Hilton offers consumers a Frictionless Experience, Digital Integration, Personalized Experience, Program Awareness, and a Phygital Integration.
Madewell is a brand that is excelling in the online experience space. They have managed to outperform the industry benchmark, which is impressive. The website itself is simple, slick, and has a sexy appeal. One standout feature is the account profile, which is incredibly easy to use and update. Additionally, no matter what page you are on, it is hard to ignore the program header, footer banners, and callouts. Madewell does not just focus on offering discounts but also ensures that customers are aware of their loyalty program. This attention to detail and focus on the customer experience are key factors that contribute to their success.
Madewell offers consumers a Simple Profile, Ease of Navigation, Prominent Program Messaging, Messaging Indicating Special Benefits for Members.
The profile is easy to find within 1 or 2 clicks and has clearly outlined program benefits.
IKEA is recognized for its immersive in-store customer experience and even the food court, however, we should add mobile app to the list as the brand has invested heavily in their consumers digital experience, focusing on customer centricity through its IKEA Place mobile app. It utilizes augmented reality to help customers visualize how IKEA furniture would look in their homes and makes it easy for customers to virtually place 3D models in their own space, furnish an entire room in a few taps, or find the ideal product by searching with their camera. The app allows customers to get inspired and try various products, styles, and colors in real-life settings with the swipe of a finger providing a frictionless, easy-to-navigate, and consistent interface. By providing dynamic ways to engage with the brand and meet customer needs on the go, Ikea reduces friction and enhances the overall customer experience.
Ikea offers consumers Convenience, Seamless Experience, Easy Sign-Up, Sign-Up via the App, Enable Touch ID/Face ID, Camera Functionality, Utilization of Augmented Reality and Bringing Products to Life.
So, as a reminder, everyone is struggling with the same problems, regardless of the verticals they serve. While it is easy to compare yourself to what you believe “perfection” to be, don’t focus your energy on perfection, but rather what looks good looks like based on your brand and consumer. Loyalty is multi-dimensional – it is a consumer expectation to deliver on all three facets of loyalty, even at a foundational level. Kobie’s objective in monitoring, tracking, and measuring the market is to identify opportunities to help brands create more enterprise value through their loyalty. By monitoring these brands, we can create an informed brand strategy with your priorities at the forefront.