The next generation of loyalty programmes make completely new demands

22 February 2019

The next generation of loyalty programmes make completely new demands

I have had the great honour and privilege of being a member of the Retail Awards’ panel for “Best Loyalty Programme” for the past seven years (before that I was a member of the Fashion Awards panel in the same category for three years). It has been very exciting and interesting to see how the industry has matured, refined and developed since I started almost twenty years ago, especially considering the pace at which development happens today. What will be required of a good loyalty programme in five years?

Today, everyone has a loyalty programme

Today, almost every consumer-facing company has some form of loyalty programme. More and more companies have realised that a loyalty programme is an effective way of bypassing the “nay saying” and physical letter boxes with large, firm “No advertising, thank you” stickers on them. It has also been understood that a good loyalty programme provides direct access to customers’ eyes and ears: customers who have actively stated that they actually want to receive the communication. This is a valuable asset and a confidence that, as a company, you should be careful not to abuse.

Few dare to challenge – why?

But a serious reflection I have made during my work on the panel is that many of the programmes today are very similar – in terms of interface and orientation, but also in terms of functionality and design. Of course, you should learn from each other. Of course, you do not have to reinvent the wheel over and over again. But will it not be a bit underwhelming for end users if all programmes are basically the same? And is it not risky for a company to emulate competitors too much? Why are so many programmes so similar? Has the industry found the unique and definitive form for how an effective loyalty programme should look – or are too many people using the same consultants and the same technical platform? I believe this must change if loyalty programmes are to survive as the effective forums and amazing sales channels they can be, if used correctly.

What will be required of tomorrow’s loyalty programme?

As loyalty programmes are now more the rule than the exception, new demands are being made of the effectiveness of the programmes: competition simply requires it. The programmes have become more intelligent and more relevant to the end customer. The programmes must also be more unique to the company, more holistic and honestly customer-centric. If a customer starts to perceive a loyalty programme as an anonymous rebate system which exists mainly to churn out advertising campaigns, they stop listening – and, as a company, you will have abused customer interest and trust, and the customer will go elsewhere – there are plenty of options today.

Customers’ interests first

Truly effective programmes are created when engineers and designers work closely with consumer insight and skilful business strategists and analysts. Only then can you create a programme that is at the forefront and meets the business challenges facing the company. To create a loyalty programme that makes a difference, those who create the programme and fill it with content must truly understand the company’s core business and customers’ needs. A really good loyalty programme brings together the company’s solution to customers’ needs in a way which the customer perceives as individual and unique. This creates trust and lays the foundation for a long and vibrant relationship. It is more difficult and requires more work than simply copying others – but, on the other hand, it is also much more effective.

I believe that over the next few years, we will see completely new kinds of loyalty programmes that differ far more from each other, offering things we have not seen yet. And, as I said, things are moving quickly now. Following developments will be incredibly fun!

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