“Points and Merch”
Posted by Nancy Porte on Thu, Mar 24, 2011
When you think about loyalty, do you think about points programs and discounts? At Loyalty Expo 2011, held in Orlando this week, that was only the beginning of the discussion. The event was a gathering of loyalty experts from small to global organizations and included Bunchball, SAP, Starbucks, GameStop, Dunkin’ Donuts, Savvis and Hallmark Cards, among others.
In addition to the presentations designed for B2C professionals, there was a B2B track. I was pleased to see this because while there are some thematic similarities for loyalty programs between the B2C and B2B worlds, there are enough differences to warrant the breakout sessions. The B2B track was well-attended with relevant presentations and lively discussions. As the profession and conference mature, it may be interesting to further segment this group into SMB and Enterprise tracks.
During the event, there were a number of themes that emerged. Here are 5 ideas and challenges that resonated:
- Today’s loyalty programs create customer engagement through “points and merch” (merchandise), but true loyalty is accomplished through customer experience design. In the B2B space, loyalty programs typically have to consist of looking at interactions and touchpoints, making sure that each of them results in an excellent customer experience.
- Drivers for customer engagement changes from category to category. What makes customers loyal to grocery stores will not be the same as what makes them loyal to luxury cosmetics. While this may be apparent on the surface, it is a challenge to loyalty marketers that are designing programs to promote customer engagement. Customer segmentation and behavioral understanding are critical to aligning the right program to the right category.
- Disappointment is the opposite of delight. If a customer is unhappy enough to complain, you have the opportunity to recover. But, if a customer is disappointed, he is more likely to not say anything – and simply walk away. As Mark Johnson, CEO of Loyalty 360, said, “Customer disappointment is the kiss of death for brands.”
- Data is abundant but resources to process data in a meaningful way are scarce. Most organizations are talking to customers through surveys, focus groups and other methods. The challenge is how to integrate all of the feedback and come to meaningful conclusions. Data is there, but understanding is not.
- New media users only follow an average of 5 brands. This fact was discovered in the 2010 Cone Consumer New Media Study, a survey of a convenience sample of 1,050 adults. According to the study, 58% of users will stop following a company if it acts irresponsibly toward its consumers, over-communicates with them (58%) or provides irrelevant content (53%). Under-communicating (36%) or censoring user-generated content (28%) are other reasons why people disconnect.
Admittedly, I wasn’t sure what to expect when I decided to attend a conference focused on “loyalty.” As a customer experience practitioner, I know the value of gathering customer feedback, analyzing data, making process changes and monitoring performance. I was less convinced that discussions around Gold cards and rewards for frequent purchases would be helpful in my quest for the perfect customer loyalty solution. But I was pleasantly surprised by the formal and informal discussions at this conference.
From my view, the most interesting theme was that building customer loyalty is a journey for the organizations that decide to take the challenge. It’s not a project that belongs to a single employee, leader or department. It is a combination of building a customer-centric environment, creating excellent experiences and promoting customer engagement. For now, there is no final destination. With changing customer needs and churning competitive landscapes, loyalty programs will be evolving for the foreseeable future. Thanks to Loyalty 360 for presenting such a thought-provoking conference!