Christopher Barnard, President of Points.com, participated in an intriguing Q&A with Loyalty360 to discuss topics ranging from loyalty marketing to gamification to mobile wallets and Big Data.
Q: Before I ask you about specific marketing trends that will help loyalty programs further engage their members, can you offer your view of the state of loyalty marketing and what’s being done well and where the missing opportunities exist?
As the size and number of loyalty programs continue to grow, we have also seen a notable drop in engagement. It’s clear that loyalty programs have become skilled at increasing new member adoption of their programs. Now, the challenge will become how to increase member engagement and satisfaction within those same programs.
Q: How can gamification tactics positively impact current loyalty programs?
Loyalty programs are facing the challenge of declining member engagement, and gamification is a tool that can reverse that trend. By using psychological motivators like competing, achieving goals and seeing results, gamification can re-connect members to their programs emotionally and intellectually. It can encourage more activity and a longer-term commitment to a program, while also expanding the scope of program-member interaction beyond the traditional “earn and burn” relationship to encourage regular communication.
Gamification also keeps consumers engaged on a specific platform (mobile devices, social media and apps). Its goal is to create a relationship of exchange where consumers are challenged and incentivized to share more of themselves: their time, their attention, their information and ultimately, their loyalty.
Q: What roles do online and mobile environments play in sparking member engagement?
Mobile devices have reshaped the way we access information, and capitalizing on the real-time and geo-targeting capabilities of mobile is an important way loyalty programs will be able to capture their users’ attention.
Online and mobile environments also allow loyalty programs to meet customers where they are and offer them relevant promotions and rewards. This is key to increasing relevance and engagement as research has shown that waning interest in loyalty programs is strongly linked to members’ perception that offers and rewards are not relevant to their interests or lifestyle. Online and mobile technologies enable better targeting of promotions and offers to specific behaviors, making it more likely that each individual program member can receive more personalized content and a better experience.
Q: How will mobile wallets impact loyalty programs?
The intersection of mobile wallets and loyalty programs is certainly the trend to watch. Mobile wallets will make it even easier for program members to collect points and miles, as the loyalty programs become a seamless, integrated part of the payment experience. The enhanced tracking and storage of loyalty currencies mobile wallets provide will also encourage members to participate more actively in their programs, both in terms of monitoring their progress and taking advantage of new earning opportunities.
Mobile wallets are at the threshold of becoming mainstream, and loyalty programs could be that final push. Points’ research indicates that 78% of consumers surveyed would be more likely to make a purchase if offered points or miles, and 73% wish there were more ways to earn points and miles in their favorite programs.
Another key benefit for loyalty programs will be the ability to access a wealth of member data by having a point-of-sale presence. This data will enable loyalty programs to gain a constant flow of real-time, contextual insights about their customers and identify trends to create extremely accurate customer profiles that can anticipate customer needs.
Q: How do companies go about distilling Big Data down to use as predictive analytics when some companies don't have adequate staffing?
Big data is a big buzzword, but massive volumes of information are meaningless unless companies understand which data points are relevant to their customers and strategies. Predictive analytics —using data to predict how customers will behave based on patterns of behavior among similar customers — allows loyalty programs to exercise greater segment specificity and identify more accurate behavioral indicators. More and more, loyalty programs can rely on third-party services, like Points.com, to aggregate and analyze data for them. This process, added to mobile and online distribution offers tremendous operating leverage by relying on a network of partners and smart technology instead of more headcount.
Q: How big a role do you see real-time messaging and geo-targeting capabilities playing in loyalty program progression?
It took 38 years for the good old radio to reach 50 million users—a feat that the “Draw Something” mobile app accomplished in just 50 days. This and countless other examples of mobile’s exponential growth have taught us that in 2014, mobile is king.
The competition for consumers’ attention has to be won through innovation, immediacy and relevance. Real-time messaging and geo-targeting are areas where loyalty programs can get innovative, and they have the potential to have a big impact on the future of loyalty. It should be a driving force behind loyalty programs’ search for new ways to connect with and engage members. The real power of combining geo-targeting with loyalty is guaranteed relevancy.
If I’m walking by a drug store, restaurant, or clothing shop, a generic discount coupon, while obviously timely (I’m right out front) may not be enticing enough. However, an offer of bonus points in one of the many programs I’m a member of, immediately makes that offer relevant to me on a very personal and aspirational level. So 25% off deodorant or a shampoo might not do the trick. But those 50 frequent flier miles, though….that’s all I might need to get to Hawaii.