Multi-Channel Loyalty
The possibilities of using Loyalty Cards in multi-channel fashion are endless. It seems easy enough to sign-up or redeem points online. Just about everyone uses their card in store for discounts (Publix) or points accumulation (Best Buy.) Creating a seamless, multi-channel customer experience is a whole different story.
Believe it or not technology is the challenge in creating the customer experience. In order to keep your personalized offers, discounts, points balance, and arbitration synchronized retailers need real time access to such data. The use of credit cards, swipe cards, and chip cards offer different challenges to this synchronization. Chip cards can store the customer points balance but are expensive. Swipe cards and bard coded loyalty cards are commonplace but require real-time access to the points balance and customer balance. This is not easy as many retailers have grown through acquisition and have many stores that still operate stand alone (and not in real-time connection with the corporate network.)
The power of tracking loyalty spend across channels is immense. Setting unrealistic expectations on the customer experience is the risk. A quick look around the blogosphere will find you the following types of complaints about loyalty programs:
1) Receiving in inordinate amount of communication on their loyalty program via mail, email, etc.
2) Not being able to redeem points within a reasonable timeframe
3) Not being able to redeem online
4) Confusion at the Point of Sale as to what offers/discounts can be used together, or how many points you earn
Some of these problems can be attributed to technology limitations where some of them are due to a poor thought out customer experience. It is a slippery slope when designing the experience. Customers are smart, and they will inevitably find the gaps and bugs in your program.
What to do
Customers appreciate transparency in a retailer. Keep the operation simple and clear to the customer. The worst customer sentiment to deal with is the feeling that your loyalty program is a hoax or a scam. I myself have fallen victim to a loyalty program where the sales associate informed me that I would receive X amount of loyalty credit based on a large purchase I made. I didn't read (or couldn't find) the fine print that points can only be redeemed in $5 increments at a time, spread out over several months. Here are a few simple suggestions to keep your customers' experience positive:- Start with clear simple initiatives that build your technical infrastructure - just the ability to display the points balance online or redeem online can be trying enough. Build the services needed to share this information real time and test them with your .com.
- As you build on this functionality, make clear delineations in each step change you make to the customer - allowing your customer to register online is a great way to drive participation online, whereas trying to fully integrate club card management into your online account can be overly complicated if you try to include points or vouchers in the eWallet.
- As always, apply your business case - do not suggest functionality you don't need or your customers don’t want. If you are driving for more participation, work on registration and redemption. If you are driving for more wallet share, work on personalized offers to go with your loyalty mailings.
All in all, it works like any other initiative. Define your goals, determine the functionality needed to drive them, and then build the underlying technology to enable it.
These programs have grown so much in the last 15 years with retail, travel, gaming, banking, and other industries. I look forward to reading your own experience with multi-channel retailers and their loyalty programs, good or bad.
Comments
Any info or data on the success of co-op loyalty programs, e.g. where multiple retailers integrate their loyalty programs under a common/shared database?
Posted by: Lester Lam | May 5, 2009 05:47 PM
I completely agree that loyalty schemes are very powerful. Offering points to customers instead of monetary rewards can be cost effective for the retailer and still a big enough incentive for customers to want to buy. I find it interesting to see how these cards are developing, some retailers offer credit cards which double as loyalty cards and generate points when used on a purchase, while in London a major bank is offering a credit card which also works as an eTicket on the London Underground.
Posted by: Jonathan Nobbs | June 26, 2009 08:53 AM
No doubt loyalty cards are a great way to earn loyalty in today's "spoilt for choice" world. Attractive and easy to understand Loyalty programs are appreciated and adopted by one and all. Also since cost of retaining a customer is less than cost of acquiring a new customer, it can reduce company's marketing budget.
Similar steps are being taken in emerging markets, for organised retailing, like India. For example, all major retail firms like Shoppers Stop, More (Aditya Birla Group), Reliance Fresh and many others have started their own loyalty programs.
Speaking from personal experience, an attractive loyalty program is a good incentive for a customer to shop at a particular store or brand.
Also, on similar lines Co - Branded credit cards is a very catchy avenue these days. In this, a bank or a finance firm in association with a Brand launches Co-Branded credit cards. For Example, ICICI bank has launched lots of such co-branded cards in association with companies like Big Bazaar, Amway, Megamart, British Airways. Whenever Customers use these credit cards to shop at the co- branded firm ( online or offline), he/she gets added benefits. This is a step further in the same direction.
Some firms are also using these co-branded cards as a competitive edge in the market. For example, when Bharti and Wal-Mart opened their first Cash & Carry store recently in India, they tied up with a local bank to introduce such cards so as to provide easy credit facility to their customers, most of whom run small to medium businesses and mostly trade on credit. Seeing it as a competitive tool in building loyalty, Tesco is also planning to launch similar cards.
Posted by: Paramdeep Singh | July 9, 2009 07:55 AM