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In this age of rampant mobility, device proliferation and the always-on consumer, marketers need a clear roadmap to avoid the pitfalls of the shifting loyalty marketing landscape. What should the new goals for retail marketers be and how can they combine the rational side of rewards with the emotional side of loyalty?
Robert Koen, Head of Americas Field Operations, TIBCO Loyalty Lab, addressed these issues during his session at the 7th Annual Loyalty Expo, presented by Loyalty360 – The Loyalty Marketer’s Association.
In his showcase session, “Rational and Emotional Loyalty in Balance,” Koen listed what he deems are the six elements of customer engagement:
Efficiency (how companies deal with customers)
Consistency (web, mobile, store)
Control (“I want to have control with how you engage me”)
Koen said that true customer engagement needs to include an emotional component. Consumer decision-making, Koen said, includes emotional (fast) and rational (slow).
He cited an interesting statistic about customer loyalty: Only 12%-15% of customers are loyal to a single retailer.
“There has to be real-time engagement,” Koen said. “There has to be fast data, mobility and it has to happen in real time.”
Koen referenced Daniel Kahneman’s book, “Thinking, Fast and Slow,” when he talked about the possibility of marketers being able to train the brain. Much of Kahneman’s book discusses the biases of intuition and the ability to identify and understand errors in judgment and choice.
How do we engage consumers from a loyalty perspective? Has mobility changed the brain, Koen asked.
“It has changed the way consumers make decisions,” he said. “Emotional relationships are driven deeper by consistency. Broad-based offers, we cannot do them anymore.”
Koen cited North Face’s VIPeak customer rewards loyalty program, which isn’t about transactions, but encourages engagement through activity and giving customers what they want when they want it.
VIPeak is a points program where members receive points when they buy online and in branded The North Face stores. Additionally, there are numerous opportunities to earn additional points for participating in activities that are aligned to The North Face brand (e.g. running races, participating in in-store events).
Once a year, members are invited to redeem their accumulated points in an experience-filled reward catalog that is totally aligned to The North Face's aspirational brand elements (e.g. trips, personal experiences with their sponsored athletes, tickets to events, lift tickets, etc.) If the member chooses not to pick from the catalog or does not have enough points, he or she will automatically be issued a reward certificate that can be used in-store or online.
Aaron Carpenter, VP of Global Marketing for The North Face, told Loyalty360 last October that when developing VIPeak Rewards, company officials wanted to embody the brand and its commitment to helping people explore and push their personal limits.
“We wanted to get them involved and reward them for getting outside and being active and redeem points for activity,” Carpenter told Loyalty360 last October. “We know people don’t just want more stuff. They want more experiences. We think it will go a long way in building loyalty.”
Koen believes this is a perfect example of a customer loyalty program that has a significant emotional component at its core.
Carpenter added: “We’re definitely connected. Our company culture is customer-centricity and excellence in customer service. We talk about it across all points of our business, and we make sure we have great consistency by giving customers access how and when they want.”
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