The Future of Loyalty

Four Reasons Digital Natives Create More Loyal Customers

 

Dull, unoriginal, lacking in real value: traditional loyalty schemes are dead in the water. As loyalty-native brands capture the hearts, minds and wallets of the modern consumer, blue chips must rethink their approach. The application of a digital product mindset to loyalty is bringing them closer to customers and delivering more meaningful experiences.

VIDEO

Four Reasons Digital Natives Create More Loyal Customers

TRANSCRIPT

Driving value for every customer with a loyalty scheme of the future

One fundamental change we need to make to our mindset is to stop treating loyalty like a project and start to treat it like a product.

Customers today demand a different engagement with the brand. And they want the brand to be present everywhere they are. A loyalty scheme of the future is something inspiring that people can believe in.

Loyalty offers an incredibly powerful place to adopt a digital product mindset.

Loyalty schemes today are pretty dull, they rely on stamped pieces of cardboard, receipts stuffed in your wallet that you have to remember, trying to upload them online when you get home. And, at the end of the day, there's nothing really inspiring about the programme.

Brands today are really facing four big challenges.

1) Their loyalty schemes are gone stale, they've been around for years, they haven't refreshed them, and engagement is just dropping off.
2) There is a huge amount of competition in this space, the average consumer is enrolled in over 20 loyalty schemes, but he's actually only really engaging with four or five.
3) The value that customers perceive that they're getting from these schemes is just not enough for them to go through the hassle of collecting and redeeming vouchers.
4) Brands are just not doing a good enough job of explaining the value that their schemes can give to customers.


When you compare loyalty like that, to the kind of subscription and membership services, we're seeing whether it be coffee, cocktails, flowers, or exercise bikes, wherever you look in the market are these new loyalty native competitors. They have real customer experience, their services are delivered seamlessly across everyone's digital touch points, and people love them.

In the old world, you had one type of behaviour and one type of reward, you'd collect points, you'd get vouchers. So what we're talking about when we think about multi-dimensional loyalty schemes, is a scheme where you can be rewarded for lots of different kinds of behaviours, and the rewards that you get aren't just vouchers, they can be experiences. Because the experience you're delivering is more complex, and the rewards you're offering touch a number of different parts of the business, a simple off-the-shelf loyalty product is just not going to cut it, and you need to take a far more nuanced approach.

A digital product mindset has been championed by the digital natives, those brilliant new brands that we're all very familiar with, and we use every day. 'Loyalty native' means they've grown up with subscription, or membership at the heart of their proposition. And the blue chips, those brands we all know and love, are now in competition with these loyalty, native businesses. These loyalty natives are winning, they're winning with a deeper engagement with their customers with a seamless experience, and with the ability to take all their interaction data and use that to continuously evolve value.

A digital product mindset to loyalty lets you be truly customer-obsessed. You can organise all those departments like marketing, or technology or finance, all in one place, all pointing at exactly how to deliver value to the customer. And if it's done in a product way, where you're also taking the data from that scheme and making the changes and optimising as you go, that's continuous drops of value, week by week.

By treating loyalty like a product, we're elevating it, we're moving it into the centre of the business, we're not saying it's got a finite budget, and after that we're not gonna work on any more, we're continually investing in it.

So how does a blue chip start?

Well, firstly, it's 'Don't compromise on the foundations.' You have to build the solid core that's going to allow you to be flexible, to have that ease of integration and to deliver these new experiences wherever your customers need them. Loyalty offers an incredibly powerful place to adopt a digital product mindset. By aligning all of your resources around a single customer outcome, you drive continuous value for every customer.

More from this series:

Red Badger Nandos Digital Loyalty
CASE STUDY

Enhancing Nando's loyalty programme: the UK's first digital rewards scheme

A cross-functional team designed and built a UK first mobile NFC loyalty card and fundamentally changed the way customers engage with the brand across physical and digital channels.

Read more ➤

Email us at:  hello@red-badger.com

Call us on:  +44 (0) 20 3567 0555

Find us on social media:

 
 
4th Floor,
2 Old Street Yard,
London
EC1Y 8AF

(Featherstone Street entrance) 

Red badger map-2