A Trend Away from Traditional Loyalty Programs? The Value Exchange

Loyalty360 talks to brands and vendors on a regular basis to stay close to the pulse of the industry, what’s trending, and where certain technologies might be making a lasting impact on customer experience/customer engagement.

Loyalty360 caught up with Erin Raese, senior vice president, customer loyalty, global loyalty solutions, Aimia, to discuss what she is seeing and hearing in the industry that can help loyalty marketers enhance their respective offerings.

What are you seeing from a customer perspective in the loyalty industry and how will you strategize around those views?
Raese: We’re seeing a trend away from traditional loyalty programs–earn points, get stuff, or the newer version of loyalty that’s a “spend and get” structure. Organizations are understanding the need to provide real value and recognition to their customers. They’re understanding that they need to build a relationship built on trust and reciprocity: the value exchange. The value exchange happens at every touch point between you and your customer. Gone are the days where you can blast emails with no personalization with loyalty messages interspersed. Gone are the days where the in-store experience is different from the experiences received day-to-day. 

With our clients, we’re focused on each of the touch points between the organization and their customers. We collect and analyze data and use the data to build out Smart Journey®’s and experiences that drive true relationships and overall customer growth. 

What, specifically, do you see in the market to support your current view of the customer?
Raese: Just like everyone, we’re seeing a need for change. The retail landscape, especially, is one that needs to change drastically. Retail brands need to make changes to survive. While that sounds grim, we see this as a very exciting opportunity. For a long time, we’ve been talking about the voice of the customer. For so long, that’s only being done by post purchase surveys and linking the results to NPS scores. Truly listening to the voice of the customer, really understanding their wants, needs, and the value they see in your brand will allow you to build experiences that matter. 

Recently, Business Insider published a piece showcasing 25 leading retailers. Each of the retailers is watching the market, listening to customers, and adapting their models to meet the customer desires, needs, and expectations. Of course, Amazon tops the list, but there are 24 others who are making a significant impact.

Much has been said about the changing customer today. What is your take on this and do you, in fact, think that customers are changing and, if so, in what ways?
Raese: This has been a debate for a long time. Customers aren’t changing so much, as it’s the brands that aren’t changing. Customers want what they’ve always wanted. They want good service, knowledgeable help, and recognition for their loyalty. Customers have always had these expectations. If something is different, customers today are more likely to take action based on their expectations; whether met or not. In today’s world, customers know that brands have the information and the tools to meet their expectations. Additionally, some brands are very good at delivering on customers’ expectations even exceeding those expectations (Starbucks, anyone?!) Because the likes of Starbucks can do this well, the expectation is set with customers that they can and should get this level of service everywhere they go.

What can loyalty marketers do to keep pace with the changing expectations/demands of today’s customer?
Raese: The expectations discussed above should push loyalty marketers to make changes and enhancements to their approach and processes. While consumers will all tell you it’s about price and that they always follow the discounts, the reality is that people will pay more for service and/or experiences that meet or exceed their expectations. Thus, is the loyalty marketer answer still a new promotion or new sale every day or every few weeks? Loyalty marketers need to look at their customer data, understand it, and then take action on it in a meaningful way. 

We had a meeting the other day with a group of marketers. They talked about their brands with terms like experience and family. They shared customer feedback that also talked to experience and family.  Yet, they admittedly sent an email a day with the latest daily sale in it. For this company, it’s not about keeping pace with a new reality, it’s about being true to their original brand position and the brand’s true customers. For many, it is that simple. 

What are loyalty marketers doing well today regarding their customer-centric initiatives, and where do the challenges lie?
Raese: Today, marketers are doing well with being relevant socially, including opportunities for customers to connect with the brand digitally. Many brands have engagement tools built into their web or mobile experiences. A good deal of brands also has some kind of gamified approach. These tools are great at building awareness and engaging potential customers.

The challenge lies in that many of these initiatives are delivered as siloed experiences. If I post a picture with the promotable hashtag, the fact that I did that never ends up in my profile and the company doesn’t know I participated. Or perhaps I completed a room design or a wardrobe wish list, often this information isn’t used to market to me. It’s important that, if the information is being asked for and given, that brands use this information in a way that enhances the customer’s overall experience. 

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