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Loyalty’s First Step: Identifying the Customer

Creating great loyalty marketing strategy is one thing, but delivering a Customer Experience to program members that reinforces behavior change over the long term is quite another. Our blog, The Muse, was conceived with the purpose to illustrate how great strategy can come to life at the point of purchase or at least in the moment when your “best” customers are making that all-important purchase decision.

Far too many loyalty programs in market today reflect the old school model of great PowerPoint that doesn’t translate into motivating customer experience and ultimately incremental sales and profits for the sponsor. In the Muse, we will strive to share our personal experiences with loyalty programs, both good and bad, and also our perspectives on what it takes to delight customers in this digital age.

If you break down “customer experience” into its component parts, the most elementary has to be customer identification. In every program there has to be a way to uniquely identify the customer and link their profile to a specific behavior, transactional or otherwise. The rarely questioned method for customer identification for the past 20 years has been a membership card with magnetic stripe, barcode, or both on board.

As customer wallets have swollen with the saturation of loyalty and rewards programs in the market, consumers have lamented about seeking “a better way” to manage this part of the loyalty interaction. Brands are listening and many have enabled alternate identification keys such as phone numbers or PIN codes. CVS has done a great job with its ExtraCare program and the customer experience is made pleasing by the fact that members don’t have to remember their card. All they have to do is recite the phone number affiliated with their account and they can complete their transaction for the credit they are qualified to earn.

Beyond alternate keys, there have been technology driven solutions brought to market that seek not only to ease the ID process, but also to aggregate the many loyalty cards in the consumer wallet into one card, keyfob, or device.

The KeyRing Thing was introduced several years ago and allows a person to create an online profile and populate it with up to eight or so of their favorite rewards programs. The programs listed become part of a key fob card that carries the brand logo and barcode for each program. The technology is simple and the result straightforward – most POS machines can read a barcode and consumers can trim their fat wallets from 8 cards down to one appendage for their keychain.

More recently, there has been introduced a myriad of apps for Smartphones that allow consumers to manage all of the rewards memberships from one central place. Cardstar is one that has been on the market for some time though it is not clear how widely adopted is has become.

Another evolution of the card aggregation play are programs like Chatterfly and Rewardix which go a step further by lining up local merchants in a form of coalition to allow accumulation of reward points for everyday purchases with these same merchants. Imagine the ease of waving your Smartphone at all of your friendly local merchants as you go about your weekend chores and finding out on Monday that you’ve earned some cool freebies to start your week off right. On the surface, that has the making of a great customer experience.

The challenge with all of these Smartphone based apps that rely on specific sets of local merchants boils down to awareness and engagement. Most consumers are deluged with information today and just keeping up with the buzz of the latest handy Smartphone application is problematic enough. Assume that awareness is achieved, people then have a learning curve to become familiar with how the app works, which merchants honor the program and then have to go out and give a trial in real life.

It is exactly at this point when wonderfully conceived strategy breaks from the ability to deliver a great customer experience. I’m not picking on Chatterfly or Rewardix, but I don’t know many people hungry to take on another learning curve these days. We’re all busy enough.

To stay true to the Muse, you’ve got to keep it simple and always have to view the operational aspects of a rewards program from the customer viewpoint. Letting technology lead the way delivers on a technology – centric execution, not one that is customer based. And, it is customers who pay the bills the last time I checked.

Bram Hechtkopf

Bram Hechtkopf