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While travel and retail brands have made a lot of progress in the last 24 months, the bulk of innovation has come from other consumer sectors – including media businesses, entertainment, and telecoms providers, which in recent years appeared to regard loyalty as a lost cause. voucher-based. A disloyal generation? Engaging employees.
The majority of existing partnerships at big loyalty programs are brokered with one goal in mind: creating more value for the most frequent customers. For airlines and hotel groups, frequent customers are business travelers, so their partner mixes are heavily biased toward fellow travel brands. I’m a case in point.
The future represents much more collaboration among brands to serve common customers more effectively. An example of effective alignment of strategy with tactics include Australia’s Coles Supermarket chain and its flybuys rewardprogram. altering customer behaviour to support corporate objectives, without upsetting people.
Bribing customers is easy and, as with most easy initiatives, not very profitable. Banks have been in and out of rewardsprograms for decades – but their focus ebbs and flows depending on the economic cycle as well as the regulatory framework. Merchants across retail, travel, utilities, healthcare, etc.
Nobody with $100 in pesos leftover from a recent trip would travel back to Mexico just to spend them, but they might exchange them back into dollars. Many people who travelled regularly (until overseas card payments became the norm) collected coins and banknotes from dozens of different countries, holding them for decades.
By the end of the programme’s first year, loyalty members made up 44% of Tarte.com revenue, despite only making up 21% of the total customerbase. Customer journeys to the moment of purchase are highly complex and too few brands are engaging with key steps along the way, to understand why customers buy, or fall out of the funnel.
Such ‘loyalty’ programs today are actually just rewardsprograms: ‘you do this and I will do that.’ This is normally in the form of static rules which apply a flat 1%+/- reward across the board. A superb example of a program getting this right this is Virgin Australia’s Velocity program. This seems fair.
Your existing customers who are already happy with your products will be more than happy to share your business with their peers, especially if there is an incentive involved. Loyalty programs provide that much needed push. . Use the help of a rewardsprogram tool that makes all of this integration possible.
Broadly speaking, most of the chains’ loyalty efforts have been in proprietary, albeit digitalized versions of the original S&H program: collecting in order to redeem for rewards, some digital couponing, and pushing out offers via a mobile app. travel (Budget car rental, Velocity). This is nonsense. utilities (AGL).
Rewardprograms still have an important part to play in this effort; but they are only part of the picture. YouGov data from the UK shows that even the youth demographic – supposedly disloyal – thinks that points programs “are a good way for brands to rewardcustomers and 59% think all brands should offer one.”.
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