Loyalty to a brand, product or service used to rest on the classic tenets of reputation, functionality, usability, availability, convenience, quality, price, service experience, customer relationship, peer recommendations and perceived value. Those tenets continue to hold good but have been superseded by the attention an organization brings to safety and hygiene. Personal health, well-being and emotional attachment have been pushed into—and on top of—the loyalty mix, thanks to the compulsions of COVID-19 that has changed how we live, work and play.
Loyalty is driven largely by perception shaped by personal attention. However, in the wake of COVID-19 it is time to pause and re-structure the idea of personal attention and loyalty, to sanitize the concept, making it smart and aware of the primary need of customers to be protected from invisible health hazards.
The central percept on which the success of post-COVID-19 loyalty programs depends is trust. Create trust, and the customer will return for more.
Creating a bond with customers by making them feel special has been a business pivot for ages. In the late 1700s, a US-based company gave redeemable coins to customers that could be used for their next purchase. The program recognized the value of creating repeat customers. Modern CRM systems are geared to creating repeat customers—which remains the primary measure of how effective an organization’s loyalty program is.
The early 1980s saw customer loyalty becoming a finely honed science with airlines launching frequent flyer programs. By the 1990s, card-based loyalty programs gained in popularity with retailers, CPG, the beauty and grooming industry, gaming, entertainment, media subscriptions and even credit cards. It became so popular that collecting loyalty cards from different loyalty programs was often a topic of discussion. The proliferation of loyalty programs across industries increased the focus on building overall spends. COVID-19 has changed that, bringing a remarkable shift in the factors that create and build repeat buyers and improved spends.
Redefining value in the times of COVID-19
For the moment the changes in the business environment have placed the concepts of personalization and customization on the back burner. They are vital, and will continue to remain so; but a laser focus needs to be brought to redefining value in the face of COVID-19. Most benefits provided by traditional loyalty programs have become soft criteria in the face of hygiene and safety concerns. Earn-and-burn has become secondary to health and wellness. Necessity has replaced nice-to-have. The art and science of loyalty management is being forced to adapt.
Customers also need to adapt. To enable this, brands have to invest in re-educating customers on the need to adapt. For example, guests at a hotel would want to know how many customers have come from COVID-19 affected red zones, how many from green. To enable this, the onus is on guests to provide accurate details. Organizations must devise a variety of incentives to ensure that customers provide details honesty so they can add a new dimension to their loyalty programs.
Another example is of restaurants intensely promoting kerbside and no-touch home deliveries/ payment processes using videos, mailers, social media, chat sessions/ IM, prominent messaging on food packaging, delivery vehicles and even on bills to ensure that customers are put at ease. This should be followed up by a quiz on “safety and health standards adopted by the restaurant” where participants are rewarded with points on their loyalty cards (or provided coupons) for correct answers. Retailers can use similar tactics by creating Virtual Reality (VR) modules that walk customers through the store (before they step in), showing them the safety processes being followed by the retailer – then rewarding the customer (with the equivalent of coins) for participating in a simple follow up quiz on safety standards.
Creating smart loyalty programs
How deep is the change going to be in the loyalty marketing space? How can loyalty programs be made smarter so they stay sensitive to the anxieties of customers? To respond, the priorities placed on data acquisition need to change:
1. Declared data, which comprises the data that a customer shares (like name, contact details, DOB, etc.) needs to be supplemented by self-declaration about their wellbeing, recent travel, potential syndromes, health test certificates, etc. How can your brand entice customers to honestly provide this data?
2. Behavioral data, or observed data from customer interactions with the program (buying patterns, reward level, response to offers, reward redemption), partner programs, online data exhaust, provide insights into creating relevant personalization.
3. Calculated data, that comes in two flavors: Aggregations and machine learning calculations. Aggregations are counts and pre-defined calculations. Machine learning allows for prediction based on historical user interactions. Examples include: Customer lifetime value, probability of churn, product/offer affinity scores and recommendations.
While the last two data types are important—they help our restaurant, mentioned earlier, add extra hot sauce to the kerbside delivery because the data shows the personal attention and connect will build loyalty—it is the declared data that must be improved and leveraged to make loyalty meaningful in the time of COVID-19. On the face of it, acquiring health and travel data may seem difficult but if the communication is clear and suggests that the brand is keeping the interests of customers foremost, customers will respond with trust. Remember, the operating environment for the customer has also changed drastically, changing the rules of the game for everyone.
The next step is to integrate all the data. This presents a real challenge for loyalty marketers as the data they need resides in siloes (or even in partner systems). Bringing it together to create real-time intelligence is a herculean task.
The inability to bring data together for prompt analysis results in loyalty execution that is ineffective and often clumsy. For example, there is little point in sending an offer, say a complimentary bottle of wine for dining at a restaurant, to a hotel guest after the guest has checked out!
Our Smart Loyalty solution
To leverage new data, integrate it with existing data and improve loyalty programs, ITC Infotech has created a Smart Loyalty solution. It is designed for the difficult times that customers and businesses are going though. The solution combines platforms and services, primarily based on a SessionM platform coupled with our deep loyalty experience, accelerators and design-led approach. It allows marketing teams to create newer and faster responses to retain customers, reward them, improve spends and provide a consistent omni-channel experience over Mobile, Web, Portal, Chatbot, Service Desk, etc.
Our overall offering is experience and data led, allowing businesses to innovate, implement and improve their loyalty strategies. Our solution addresses program design, business case identification, program benchmarking, delivery, integration, performance management, predictive analytics and customer value maximization (CVM). It drives value through personalized engagement generated by leveraging declared, observed and calculated data.
Our Smart Loyalty program can integrate with any third party systems and leverage external data, hence, supporting requirements around any industry like Retail, Quick Service Restaurant, Travel, Hospitality, CPG, Finance, Telecom, etc.
A smart program is vital for effective loyalty management today. Take for example the restaurant we discussed earlier. It may be using a delivery partner like DoorDash or Uber Eats that can provide critical data to enhance loyalty campaign targeting and effectiveness. Our solution even allows smaller brands to form a coalition program, placing them in a competitive position vis-à-vis larger brands.
Creating a strategy that counters the impact of COVID-19 is just as important as technology. Your industry, geography and customer type will be major determinants of the new strategy. But technology innovation and implementation expertise will make the difference.
Our expertise of having worked with several brands globally can help your organization turbo-charge its transformation towards Smart Loyalty. To know more, reach out to us at firstname.lastname@example.org.
Global Capability Leader – Loyalty
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