Retention

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Loyalty: an Unfulfilled Promise

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We know that loyal customers are more profitable and help us win new customers. Loyalty is highly valuable and should benefit both brands and consumers.

Loyalty programs should work, but most traditional loyalty campaigns waste the opportunity. They fail to engage consumers and only offer complex, boring ways to get discounts.

On average, American households hold memberships in 29, but are active in just 12 of them.
Source: 2015 colloquy loyalty census

Consumers join, because the love the idea of loyalty programs but for most traditional loyalty programs, the reality does not fulfil the promises and they are unpopular.

Social media sentiment on loyalty programs is 89% negative
Source: Cap Gemini

The value for brands and the interest from consumers is clear. Consumer loyalty programs need to be more engaging.

How can you make loyalty programs more engaging?

Challenge then Reward

Games teach us how to hook people and sustain their enthusiasm over long periods of time.

  • Challenge consumers to complete a task and reward them on completion.
  • Establish a balance, a 2-way value exchange where the brand delivers relevant messages and consumers enjoy a positive experience.

For instance you could:

Challenge Consumers to

  • Compete with others
  • Visit different outlets
  • Buy new products


Incentivize Consumers with

  • Prestige e.g. virtual badges
  • Higher tiers and more perks
  • Leader board position

Make Them Feel Special

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Use data, in a customer loyalty program you know a lot about each individual. Personalize everything. Make them feel like this is just for them.

Streamline the experience. Wherever you can, remove friction.

Give them convenience, entertainment, and status.

Example

Starbucks executives cite their loyalty program as the key driver in a 26% surge in profits and 11% additional revenue with 8M active members and 7M mobile transactions per week.

The Starbucks program excels at convenience, reach, and status.

The mobile app clearly shows the rewards you have earned, how close you are to the next level, and where the nearest Starbucks is.

They can even encourage members to buy Starbucks packaged products in other stores – inside the packaging there is code for them to earn points.

And the big draw is the gold card. When members reach the top level they receive a swanky, personalized card to show in-store to receive additional perks – making them feel like they have joined the elite.

Fuel their Desire to Win

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An important way to sustain momentum is not just to challenge each member individually, but to challenge them to compete with each other.

Leader boards give people a target, an incentive to earn more points and see their name moving up the board. And it keeps bringing them back to check if they have been overtaken.

Adding gamification increases email open rates by +86%

Example

The airline industry has enjoyed decades of successful loyalty programs but the emergence of discounted travel websites quickly eroded customer loyalty.

Air Canada used gamification techniques to make their customer loyalty program different – making it far more engaging and more fun.

Members were challenged to fly to specific destinations and combine flights with hotel and car rental partners. In return they were rewarded with virtual badges and points to increase their position on a leader board.

The highest positions on the leader board won millions of air miles, making competition fierce.

500% ROI

The ROI for Air Canada was over 500% with

  • 100,000 participants
  • nearly 1 million page views
  • 16,000 social shares
  • 150 million bonus air miles

It was our very first promotion to feature gamification mechanics to build customer loyalty and exceeded our highest expectations. Leveraging badges to visualize the reward and creating a leader board definitely brought out the competitiveness of our members

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Start with Mobile

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For loyalty campaigns, we usually recommend a mobile-first approach. The advantages of mobile marketing are particularly strong when marketing to your current customers.

You can tailor your messages to the individual. Using the phone’s sensors, you know if they are near one of your stores, or at sports event, on holiday, or at a shopping mall. So you can send a message that is relevant to what they are doing.

Mobiles provide convenient ways for members to interact with your campaign. They can get their phone out and with just a few touches:

By collecting and analyzing mobile data from your customers you can build up more accurate profiles for them. And quickly run marketing experiments with a small sample of your customers to test whether a particular segment will respond to a campaign.

Example

DBS Bank, the leading financial services group in Asia, had an established loyalty program using a mobile app. DBS credit and debit cardholders received promotional coupons to redeem at partner retail merchants.

We used the 3radical Voco platform to increase customer spending by making the program much more engaging using gamification and geolocation. For instance:

Instead of just being given a voucher, members now have to spin a virtual wheel-of-fortune to win the vouchers. This dramatically increased engagement to 70%.

Using iBeacons, we could detect when customers are near a merchant and send them a voucher for that store. This increased redemption rates by over 110%, and had a very positive response from customers who loved offers like free starters as they walked past a restaurant in the evening.

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How Does it Work?

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Voco software allows marketers to build and control data-driven marketing campaigns that can be interactive, personalized, and engaging.

Marketers need to refine their campaign based on results, being able to quickly make changes without having to wait for IT.

For the best results, we recommend working on the first project together. By combining Voco software, our extensive experience building “challenge and reward” marketing programmes, and your knowledge of the market:

Start Here

  1. Tell us about your retention campaigns and the challenges
  2. We show you how 3radical Voco delivers exceptional results

Make My Brand Engaging