Sample Report A Foresight Factory report Loyalty-building 2017
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Sample Report
A Foresight Factory report
Loyalty-building 2017
2
As we near the end of the 10s decade, loyalty as a commercial concept is under intense pressure. The notion that conscious, unswerving loyalty delivers long-term value is being challenged; by consumers - who have a tendency for commercial promiscuity - but also by brands who constantly invite shoppers to stray.
Designing and rolling-out successful loyalty programs becomes all the more challenging - and vital - in this context, requiring ever more creative manoeuvring. Loyalty marketers will know acquiring customers is just the start, once over this hurdle, which strategies should they employ to ensure that memberships do not lapse, interest is constantly renewed and the relationship survives long after the special introductory rate?
We believe predictive consumer trends can be used to create differentiated, compelling programmes that capitalise on both transactional and emotional invitations to engage - and ultimately deliver long-term brand equity, which loyalty programmes in their current guise fail to consistently deliver.
Created primarily with loyalty marketers in mind - responsible for administering and innovating loyalty programmes every day - these reports focus on actionable, future-focused consumer trends that can inspire new approaches to loyalty.
Foreword The trends at the heart of loyalty in 2017
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This is a free sample version of a series of three reports focusing on the trends that can be used to deliver competitive advantage at all stages of the loyalty cycle - The Trends at the Heart of Acquisition and Activation and Maximising Transaction Frequency and Value and Retaining Loyalty in the Long-Term.
The full series of reports totals over 80 slides, representing 200 hours of analysis by Foresight Factory’s team of predictive consumer trends experts, worth £40K, and is available to subscribers to FFonline. Each features a range of specially selected trends, clear calls to action, related consumer data and examples of relevant commercial innovation.
Brands are invited to sign-up to an initial three-month trial subscription to FFonline to access the full reports and kick-start the process of transforming their loyalty programs using predictive consumer trends.
Our senior consultants are also available to conduct bespoke analysis to identify the specific drivers of brand equity in your sector and quantify your unique emotional territory to build a holistic view of your opportunity to drive overall brand health using trends that won’t date. Find out more by contacting us.
Loyalty-building 2017 About this sample report
Acquisition & activation
1
5 Source: FFonline Research │ Base: 1000-5000 online respondents per country aged 16-64 (Indonesia & S. Africa 16-54), 2016 February Source: FFonline Research | Base: 781-1971 social networkers per country aged 16+ (China 16-64), 2016 October
HOW TO ACT | Brands are invited to harness the power of recommendation to build programme membership. By rewarding existing members for recruiting friends and family members, they are incentivised to remain active participants and are rewarded for activity
beyond regular spend on the brand’s products and services. New members, meanwhile, are on-boarded in the knowledge that their contacts are also active on the same programme.
52% of global Millennial social networkers say they “usually click on the links my friends share on social networking sites” (32% of Baby Boomer social networkers) 0%
20%
40%
60%
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USA France GB Spain China India
Gen Y Gen X Baby Boomers
% who would “share and recommend a purchase on social media in order to get a discount on it”
Use Social Advocacy to Build Membership
TREND INSIGHT | When deciding what to buy, consumers’ peers - friends, family members and fellow consumers - remain powerful commercial influencers. As consumers congregate in
Connected Communities online, the opportunity for social commercial advocacy is clear; indeed, many are interested in making commercial referrals to their social networks that also
bring them personal rewards.
6 6 Source: FFonline 2016
Members of the Marriott Rewards programme are invited to “give your friends
the scoop on Rewards… And give yourself a bonus”. By referring up to 5 new members
each year, members earn points. New referrals also earn points that are to be
redeemed at participating Marriott hotels within a year of signing up.
Clothing brand JACKTHREADS operates a tiered approach to its US refer a friend
programme. Referrals receive $10 upon activation of their account with the retailer, while the existing member who made the
referral receives $20 once the new member has completed their first purchase.
SOCIAL ADVOCACY INNOVATION | Referral schemes typically incentivise both referral-giver and receiver. Programmes also offer tiered benefits for referrals, with social media posts, for
instance, receiving different rewards to direct referrals.
Use Social Advocacy to Build Membership
7 7 Source: FFonline 2016
The Jones Soda Company offers members of its Rewards Program the chance to earn reward points by completing a variety of social activity; friend referrals, for instance, earn the member 200 points while sharing the
website on either Facebook or Twitter is rewarded with 50 points. The first reward (a $5 off coupon) is unlocked once 850 points
have been collected.
Boden has long since operated a recommend a friend programme, with
customers incentivised with a £15 voucher to spend as soon as a recommended friend has made a purchase (on which she will receive a 20% discount). The company provides simple referral templates, with the option of sharing
via email, Facebook or Twitter.
Use Social Advocacy to Build Membership
8 8 Source: FFonline 2016
New members of the Picturehouse Member programme - a fee-based subscription programme giving members discounts and benefits at the UK-wide cinema franchise (as well as
the chance to earn points which can be redeemed against discounted cinema tickets) - are sent two membership cards upon activation, one of which they are encouraged to share with a friend or family member so that they are also able to share in the benefits of membership. The
programme is heavily promoted in auditoriums before screenings as well as in the entrance areas of participating Picturehouse venues.
Use Social Advocacy to Build Membership
9 Source: FFonline Research │ Base: all individuals aged 16-64, 2016 Source: FFonline Research | Base: 1000-5000 online respondents per country aged 16-64 (Indonesia & S. Africa 16-54), 2016 February
HOW TO ACT | By embedding loyalty programmes into near-ubiquitous smartphone devices - either via dedicated branded apps or messaging apps - enrolment and activation can become
convenient and familiar processes for consumers. App-based programmes can also be positioned as offering more benefits than static store cards, such as instant access to rewards
information, the ability to create wishlists, and the promise of real-time, personalised rewards (for example, when passing a particular store).
Smartphone ownership: growth to 2025 Growing messaging app usage: % who have used Whatsapp
0% 20% 40% 60% 80%
100%
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GB
Ger
man
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Fran
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Chi
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Indi
a 2016 2020 (f) 2025 (f)
0% 20% 40% 60% 80%
100%
Aus
tralia
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2014 2015 2016
Acquire and Activate Via Mobile Channels
TREND INSIGHT | As we describe in the trend Mobile First, mobile channels are becoming the preferred means for carrying out connected activities, from e-commerce to social networking. Increasingly, consumers will expect mobile-optimised commercial interactions, from customer
service to loyalty programme administration.
10 10 Source: FFonline | 2016
Chinese WeChat users who follow luxury brand Coach can sign up for and access the
brand’s loyalty programme via the popular messaging app. Incentives to join include the chance to win a handbag and as members, users can manage their membership and unlock exclusive offers. Members of the
Sephora loyalty programme can also access their rewards information via WeChat.
Launched in October 2016 by QSR brand Quiznos, Toasty Points is an app-based loyalty programme that rewards customers
with points for every purchase. Sign-up simply involves a convenient and quick app
download. Customers who downloaded the app were treated to a free four-inch sub.
Acquire and Activate Via Mobile Channels
11 11 Source: FFonline | 2016
Walmart’s Savings Catcher app delivers personalised deals directly to customers, who in return share their identities and purchase
histories (by scanning receipts). The app may not be marketed as a loyalty programme yet it fulfils many of the requirements of a traditional
rewards scheme. It also appeals to the consumer’s maximising mindset, as described
elsewhere in this report.
Soft-launched in the UK and Ireland in April 2016, Gap+ is the app-based mobile loyalty programme from Gap that delivers users a feed of product-related media related to the
user’s stated preferences and purchase history. The primary incentive to download is the offer of a 5% discount on every online or
in-store purchase made.
Acquire and Activate Via Mobile Channels
12 12 Source: FFonline | 2016
Fordpass is a multi-purpose customer service app which combines several features, from vehicle controls and smart parking to streamlined payments via FordWallet and loyalty rewards from partner companies such as Spotify and 7-Eleven. Future iterations are expected to feature ride and car-sharing and the ability to book appointments with car dealers.
The Starwood Preferred Guest programme is the SPG Hotel group’s loyalty programme. Guests who are not currently members are invited to join the programme ahead of upcoming stays. An additional perk offered by the scheme is SPG Keyless, which offer members another layer of convenience by removing the need to check in. Instead members can get instant access to their room via their smartphone, checking in and getting their room number via smartphone and then using their smartphone as a key to unlock the room door, all via the dedicated app.
Acquire and Activate Via Mobile Channels
Maximising transaction frequency
and value
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14 Source: FFonline Research | Base: 1000-2000 online respondents per country aged 16+ (China 16-64), 2016 October
Frequency of using loyalty cards in the supermarket sector: the baseline “Which of these best describes how often you do each of the following activities? Use a loyalty card for the supermarket I use most often” | October 2016
0%
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100%
China GB Sweden USA Germany
Don't know Never Less often Monthly Weekly Daily
15 Source: nVision Research | Base: 1000-2000 online respondents per country aged 16+ (China 16-64), 2015 September
Use Members’ Wishlists to Prompt Spend
Wishlisting behaviour: of particular appeal to Chinese respondents % who save items they are interested in online to refer to at a later stage by…
HOW TO ACT | Creating a space for customers to wishlist - to save coveted items to buy later - can help encourage them to save for purchases and creates an opportunity to trigger
transactions by pushing notifications to customers if, for example, a “wishlisted” item is available nearby or if its price falls. Wishlisting may not always lead directly to a purchase (for many it will
remain a digital form of window shopping) but the behaviour will undoubtedly contribute to brand-building in future.
TREND INSIGHT | So many purchases now - whether online or in-store - are preceded by an extensive period of exploration, pinning and pining-for online. A new type of pre-purchase
behaviour is emerging: we call it Wishlisting, the creation of online lists of desired products, that may or may not be bought in future.
GB USA France Spain Sweden China Japan Adding items to an online shopping basket 38% 40% 29% 23% 24% 62% 19%
Favouriting or starring items on a website 26% 26% 24% 32% 25% 57% 31%
Creating a digital list / saving links of favourite items 15% 22% 13% 17% 12% 26% 13%
Emailing links to products to yourself 16% 23% 13% 15% 17% 20% 7%
Sharing or posting items on a social network 6% 12% 4% 8% 4% 22% 4%
16 16 Source: FFonline | 2017
The House of Fraser app includes a prominent wishlist
feature. Users are able to store items in the wishlist and easily find
out whether it is in stock and whether it can be ordered online or
collected from a nearby store.
Nordstrom’s app also allows users to save items in a wishlist
area. The brand uses push notifications to alert a user if they
are passing a Nordstrom store where items on their wishlist are in
stock, prompting, it is hoped, immediate spend.
Use Members’ Wishlists to Prompt Spend
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0% 20% 40% 60% 80%
100%
Tota
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Mal
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16-2
4
25-3
4
35-4
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45-5
4
55-6
4
Mille
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Gen
erat
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X
Bab
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oom
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Source: nVision Research | Base: Global average (1000-5000 online respondents per country) aged 16-64, 2015 February
Mark (and Create) Special Occasions with Programme Activity
Capitalise on the appeal of regular celebration % who agree “I love any excuse to have a celebration” (25-market global average)
HOW TO ACT | Loyalty programmes can respond in multiple ways, by: Marking popular celebrations with additional incentives to spend, eg through special and
perhaps time-limited rewards and bonuses aligned with the occasion. Acknowledging and celebrating members’ personal occasions eg birthdays, or programme
sign-up anniversaries. By creating new occasions to celebrate (from regular sales events to VIP product parties).
TREND INSIGHT | The Everyday Exceptional trend describes the consumer’s search for excuses - and occasions - to celebrate. In our globalising world, a rich palate of cultural,
culinary, religious and traditional occasions stand ready to be marked and honoured by celebration-seeking consumers.
Right-click on chart and select Edit Data for demographic data
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Trends to drive long-term loyalty
19 Source: FFonline Research │ Base: 1000-5000 online respondents per country aged 16-64 (Indonesia & S. Africa 16-54), 2016 February
Become a long-term leisure partner for the experience-hungry
HOW TO ACT | Loyalty programmes can become a reliable means for consumers of accessing new and unique experiences - from exclusive, early access to popular events to status-
boosting activities. Experiential rewards may also differentiate programmes and appeal to those for whom points and discounts are not particularly alluring incentives to repeatedly favour one
brand or retailer over another. The invitation to loyalty programmes? Expand the range of rewards to include attractive experiences and activities so that programmes become long-term
leisure partners for experience-seeking consumers.
TREND INSIGHT | Consumers today and tomorrow will seek leisure pursuits that allow them to practice and express a wide range of interests: learning additional skills, undertaking self-
improving activities or collecting new experiences. Opportunities to upgrade leisure time will continue to attract (see The Leisure Upgrade).
The global attraction of meaningful leisure % who agree “entertainment should be about learning new things as much as simply having fun”
0% 20% 40% 60% 80%
100%
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S K
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Japa
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Italy
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Mex
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Turk
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Adjusted Reported
20 20 Source: FFonline 2017
O2 Priority provides O2 telecoms customers in the UK with regular perks and deals, including offers from
nearby physical retailers and gifts to celebrate customers’ commercial anniversaries. The programme
(which is not tier-based, with offers available to all customers), also offers Priority Access - exclusive
early access to tickets (typically 48 hours before general release) for popular leisure and entertainment events - including concerts and sporting events - as well as perks at participating venues, including drinks
discounts and free cloakroom privileges.
The MGM Resorts rewards programme M life includes access to
M life Moments, a series of experiences that include cooking master classes with top chefs and
backstage tours of landmarks. Access to Moments is based on
tiered fees.
Become a long-term leisure partner for the experience-hungry
21 21 Source: FFonline 2017
American Express offers card members access to its American Express Invites programme which “hand-picks sought-after entertainment events and experiences” for
cardholders to enjoy. Members are able to purchase reserved tickets that are otherwise difficult to obtain and enjoy regular complimentary events exclusive to members. According to American Express, card members in the UK have “met their favourite chefs at exclusive events in London Restaurant Festival, attended red carpet premieres at the London Film Festival and seen the
hottest new releases at the BFI IMAX”.
Become a long-term leisure partner for the experience-hungry
22 22 Source: FFonline 2017
theory11 is an online store trading magic cards, tricks and related paraphernalia. Members of its Elite Member Initiative earn points which are the only currency able to buy selected
products and experiences from the “Archive” which holds “rare & one-of-a-kind magic gear” and personalised experiences, including a live Cardistry Private Training Session via Skype.
Become a long-term leisure partner for the experience-hungry
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Foresight Factory (formerly Future Foundation) is a consumer analytics company, specialising in trends. We blend data to predict and size commercial opportunity and have partnered with our clients over 20 years, to help them be truly customer centric in their decision-making.
Globally headquartered in London, with offices in New York, Singapore and Stockholm our expertise is understanding what consumers worldwide want now and in the future and translating this into recommendations for brand management, product development, customer experience and other key touch points on the consumer journey.
Our principal delivery? A unique and highly customisable digital platform, FFonline, that marries best-in-class data science with editorial creativity, to give our 200+ clients 24/7 access to predictive insights from 50,000 consumer voices; a global network of 500 Trendspotters across 80 markets and 1000s of fresh examples of commercial innovation across 20 industry sectors. We also offer consultancy, undertaking custom projects to help clients answer complex questions.
About Foresight Factory
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Full Contents
1. Use Early Bird Incentives to Drive Acquisition
2. Offer Convenient Sign-Up With Immediate Benefits
3. Use Social Advocacy to Build Membership
4. Engage the Maximising, Budget-Wise Mindset
5. Create Lifestage-Relevant Reasons to Join
6. Acquire and Activate Via Mobile Channels
7. Use Product Packaging to Boost Acquisition
8. Provide Up-Front Clarity on Personal Data Usage
1. Offer Game-Like Features to Encourage Regular Activity
2. Mark (and Create) Special Occasions with
Programme Activity
3. Use Members’ “Wishlists” to Prompt Spend
4. Personalise to Increase Programme Relevance and
Effectiveness
5. Expand Loyalty Metrics to Recognise and Reward
More Activity
1. Become a long-term leisure partner for the experience-hungry
2. Genuinely surprise and delight customers - on repeat
3. Enhance programmes with more human service interfaces
4. Reward auto-replenishment as “invisible commerce” grows
5. Associate loyalty programmes with community benefits
6. Create coalition programmes with Narrative Data potential
Acquisition & activation
Maximising transaction frequency and value
Trends to drive long-term loyalty
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