Listening to the first half of our Loyalty 360 Omnichannel Loyalty Webinar earlier this month, delivered in conjunction with Forrester Research, I had a minor epiphany of sorts. Emily Murphy of Forrester brought an independent voice to the topic, effectively highlighting the challenges existing loyalty programs face today, and how leading marketers should embrace an omnichannel loyalty approach to mitigate those pitfalls. So consider this blog post an omnichannel awakening, if you will.
Turns out that according to Forrester research: the loyalty “patient” is sick and needs our help. And it’s an illness that on the face of it seems contradictory. But numbers (usually) don’t lie so here are some of the facts according to Forrester:
- Loyalty program members make up only 35% of a company’s total customer base, and of that 35%, just under one-third redeems their rewards; put another way, one-ninth or about 12% of all customers for a given company are loyalty members who redeem rewards
- Not only is total loyalty membership relatively low, it’s perceived value is just as anemic and getting weaker by the year; in 2011, 21% of survey respondents agreed with the statement that “Most loyalty programs don’t offer any real value,” up from 15% in 2008
- More than half of loyalty program members (57%) participate in only a few programs they sign up for; that means there’s a lot of cluttered wallets and purses with useless (or nearly useless) loyalty cards
There is an upside (or should I call it a healthy side?). The data is slightly misleading because half of respondents still believe their loyalty program actually saves them money. And in our still-struggling economy, one would think value and savings would incentivize far greater numbers of loyalty participants. Not to oversell it, but in some way the current age of economic uncertainty should be a “golden age” for our industry, capitalizing on customers’ hyper-sensitive price-point needs.
The second half of the presentation that Michael Hemsey and I led discussed the way to get to loyalty’s recovery by repositioning some of the issues Forrester pointed out. Customers continually crave a meaningful experience that adds value and that isn’t solely about points-based accumulation. This means that its even more important to provide a meaningful experience that grants customers the freedom to interact with and engage your brand anywhere they see fit, through multiple touch points and on their own terms. This is the foundation for what we are calling the omnichannel loyalty revolution.
To a large extent, mobile, and its ability to integrate social media, location-based advertising, and loyalty programs is the vehicle granting that freedom, appealing to today’s increasingly “always addressable consumer,” or what is called the AAC. That includes transactional as well as nontransactionable rewards. By offering small incentives for check-ins on Facebook or Foursquare for example, loyalty programs encourage members to interact with a brand outside of a purchase experience. Case in point, Walgreens has specials for customers that check-in on Foursquare and instant coupons that can be scanned directly from their phone.
While social media and mobile are key ingredients in improving loyalty’s cross-industry health, there are other elements like having the right technology and management and implementation strategy/plan adhering to the right economics considerations that are fundamental as well.