Modern Loyalty: A Primer

“Modern Loyalty”

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What do brands get out of “loyalty programs”?

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For brands, “loyalty” means: -  Retain your best, most profitable customers -  Shift “good” customers to become more

profitable in both the short and long term -  Acquire customers with potential to become

best customers -  Reconnect lapsed users with the brand

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In addition, active consumer loyalty provides a significant competitive advantage: -  Customers have emotional equity in your

brand(s) -  You are their first choice -  They look to you to solve their needs/problems -  They share information with you -  They ask for guidance -  They discuss your offering - not your prices -  They positively suggest how you can improve -  They want you to succeed -  They advocate ‘their’ brand to others

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Let’s talk about how loyalty works… -  What are some common “loyalty program”

structures? -  What would the “ideal” loyalty program look like

from a consumer’s POV? -  “Social Loyalty” and Gamification

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What are some common “loyalty program” structures?

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Common loyalty approaches: -  Collect Points, Rule the World -  Sign Up for Stuff -  Donut and Coffee Shoppe Punch Cards -  Lagniappe: “A little sumpin’, sumpin’”

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COLLECT POINTS, RULE THE WORLD 8  

SIGN UP FOR STUFF 9  

PUNCH CARDS 10  

11  LAGNIAPPE: “A LITTLE SUMPIN’, SUMPIN’”

But modern consumers have different expectations for loyalty. In part, because they have higher hopes for brands. Also, because they have cynical expectations of what happens when those hopes smack into reality.

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“While earning and redeeming points are the most important attributes for choosing hotel and airline loyalty programs, travel brands should focus on enhancing the customer experience, making rewards personally meaningful, encouraging loyalty with unexpected rewards if they want to boost consumer engagement, and ultimately building long-term customer relationships.” Deloitte Survey and Report: “Developing a blueprint for reinventing loyalty programs.”; 1/23/13

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The “ideal” consumer program is: Easy Gives value Personalized Modern

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The end result: Community If it is easy, and personal, and modern, it’s something I would be loyal to, (even if I have to jump through a few hoops). Because that means you give me what I want, and make me feel like a peer, not a number.

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This is, of course, VERY DIFFICULT for most brands to do. Which means new approaches and software platforms have sprung up to make it “easy” for brands to create loyalty programs, using social media and “gamification”.

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Social Loyalty and Gamification Right now, there are a variety of startups who try to make it easy for brands to reward any aspect of consumer behavior. Companies include BigDoor, Badgeville, CrowdTwist and others. Let’s walk through a quick CrowdTwist example.

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The basic structure of this example is “Collect Points.”

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But you collect points for many more activities…

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While some of these activities are pretty simple, they also are useful for the brand.

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The points can be exchanged for products, cool things, or event access.

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People share their behavior on their networks, earning more points, and spreading awareness.

Some other examples of gamified /social loyalty.

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FourSquare Mayor deals are one evolution.

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Tasti-D-Lite Punch Card, modernized with social media and Foursquare.

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BigDoor “badging” and MLB Gameday

Thanks!