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.
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.
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.
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More from this series:
The Future of Digital Loyalty:
How brands are adapting to Gen Z's digital demands
At Red Badger’s latest Badger Sessions event, we explored the future of customer loyalty and examined Generation Z in greater detail to reveal how brands can respond and remain relevant.
Watch the recording of this event on demand and join us, Nando’s and future trends consultancy, The Future Laboratory to find out:
- How Gen Z is changing the conversation for brands, opening new channels for engagement but demanding more in return
- Why pioneering brands are treating loyalty as a product and aligning around its delivery
- How to take advantage of your customer data to build effortless and personalised loyalty experiences
Loyalty as a Service
A 10 minute overview exploring how the brands of the future will need to embrace and build new and innovative digital loyalty programmes.
By Joel Williams, Managing Director at Red Badger
Generation Z Loyalty: "Hyper-aware, hyper connected and hyper individual"
A 20 minute keynote session with examples of how some brands are taking a completely new approach to customer loyalty.
By Chris Sanderson, co-founder at The Future Laboratory
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.