The changing definition of Loyalty and the opportunity for relevance:
One of the interesting trends we have witnessed over the summer of 2013 is the increased interest in loyalty, customer centricity and engagement; we are quite thankful for the increased impetus and focus. We continue to see the connotative definition evolve from the traditional and somewhat arcane point based, and transactional reward process to the belief that Loyalty is and should be about behavior. Yet the consistent talk and interest has resulted in numerous focus points.
We see the recent acquisition of Smart Button by Aimia in a push in increase the efficacy of their processing platforms, the ascension of the term loyalty in Google search, to the recent roll out of program by Jamba Juice, the redo of the Petro Canada program and to the impending program redo from Dunkin Donuts. We have also witnessed the quest for truly loyal customer is gaining momentum, witnessed by senior level marketing focus and increased capital expenditures from the finance side of the house are the modus operands and technology companies continue to enhance their program offerings as well as their product position to addressed the increased relevance of customer centricity, engagement, CRM and loyalty.
Yet the fundamental belief in loyalty is to have a core of consumers (fans) that are willing to enter into a unique and somewhat exclusive relationship with the brand based on a series of traditional beliefs (the Golden Rule being one) and the realization that the consumer does not have an infinite capacity to engage with all brands. The belief that loyalty is a bigger than a program and can be measured and influenced by those who are the vanguard in the space is fascinating to behold.
The great debate – To close your program or increase the focus!
One of the most interesting, temporal and therefore topical discussion that has been part of a high percentage of recent calls (with brands and technology providers alike) this month is the high profile shuttering of a series of large loyalty programs. People have wanted to know my (Loyalty 360’s) opinion as to the shuttering of number of the regional programs (Jewel-Osco, Shaw’s, and other Albertson chains) and whether that is a prudent business decision from both an operational and customer perspective.
The challenge we continue to see is the ability for companies to keep up with the rapid proliferation of data, emerging technologies, increased customer complexity and employee / operational issues that impact these programs and the ability to run effective VOC, customer centricity and loyalty programs.
The key issues are basically two in the cacophony of external noise. 1. Brands need to be able to run their loyalty programs and more importantly loyalty processes effectively, yet the complexities are increasing in the ability to effectively execute. The challenge to understand the disparate, complex, rapidly changing technologies, as well as the irrationally complex customer among a mountain of proliferating data (actionable and not) is a sufficiently difficult and becoming increasingly more so. The challenge for brands that preach customer centricity and a focus on customer loyalty yet do not have the actual ability to execute on this promise can do the brand significant damage. Running programs that are not effectively designed monitored or enhanced on a continual basis with an eye towards both the customer and increased efficacy marketing and communication do not benefit the brand, their operations or the customer. In those situations loyalty programs (hopefully not loyalty in and of itself) should be shuttered.
The Second concern is that focusing on everyday low prices or other positioning offering is something that not all brands should focus on. The brand promise is the vision for the customer and should be the guiding principle for the brand to touch their audience. Yet the positioning to the customer SHOULD be considered, the core of the customer, the brands service level offering should be in line as well. When you tell brands that price is going to be equal to all, there is some value to that to a good percentage of the audience, yet that message screams that we do not want to have that unique and valued relationship with you. The challenge to assuage the market when they are scrapping their loyalty program (process) to focus on price is challenging from a SLA offering as you scale it down.
We all realize that the service level expectations of a Wal-Mart is NOT the same as that of Grocery store such as Kroger who has the detailed and actually datasets they use as a basis to communicate to (with) you. Yet the SLA of Wal-Mart is consistent with their brand proposition and messaging; and this value is consistent to their customer’s expectations. Also, a bigger question should be pertaining to the loss of the actionable datasets and how that should be valued as well. Remember a few years back when the value of AA loyalty program technology offering exceeded that of American Airlines itself. How is this to be valued?
Also, a realization that we are taught day one in business school that we should not be competing on price; yet?
The connected economy impacts the consumer and the vacation?
For the first time on our family vacation I realized that the “connected” economy we live in with smart phones, tablets is truly “always” on. I realized this more than ever during the family vacation, as the challenging of being “always” on means that you are mostly “always off” and the ability of the irrational based human mind to engage with and process marketing communication messages is more of a challenge than ever before. More of this on Monday.