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The Backward World Of Loyalty: “I’d Like A VCR, A Wired Phone and a Plastic Loyalty Card, Please”

February 7th, 2012

That is not to say that each of these vendors will not have an important role to play in the overall loyalty approach; they will all play a critical part. My contention is that they are not currently set up to be successful in offering the entire package and here is why.

A great loyalty approach requires myriad functionality that is not readily available from the current technology providers, including:

  • A great campaign management system with the ability to:
    • Regionalize loyalty campaigns.
    • Allow franchisees to create their own campaigns.
    • Interact with internal systems such as store meta-databases and BI systems to enrich the campaigns and remove the requirement for duplicating data across several systems.
    • Interact with a creative system that provides a consistent look and feel across all platforms.
  • The ability to enrich the customer profile data with data from the major social networks.
  • The ability to load and redeem coupons electronically.
  • The ability to leverage geo-location services.
  • The ability to customize the program to interact with users how they want (via text, E-mail, mobile app, social network, etc.).

In a very informal survey of a few friends, all of them said they would much rather provide a retailer with a cell-phone number than carry around a piece of plastic (many said they have the clerk look up their loyalty account by providing their cell-phone number). There is an argument that says using the plastic card speeds up purchase transactions and, for high-volume shops such as restaurants, the few seconds saved by swiping a card can be significant. But for most retailers, the time to enter a phone number versus swipe a card will far outweigh the rate of adoption with their customers.

I would argue that a well-built loyalty package will really let each customer determine the best way to interact with the brand. Do they want to check-in on Foursquare or Facebook? No problem. Do they want to use your mobile app? Sure thing. Do they want to provide their phone number to the cashier or to a small device at checkout? Easy-peasy.

The other big factor is that loyalty programs and coupons (electronic and mobile) are rapidly starting to merge together. You may want to provide a customer with a bounce-back coupon after a purchase. You should be able to automatically “load” that coupon into that customer’s loyalty account and then track its redemption when the coupon is used. This removes the need for customers to have to carry physical coupons or offers, while providing the retailer with valuable information about redemption of certain offers because each coupon would be unique.

Another important factor of the next generation of loyalty platforms will be the ability to interact with a purchase transaction in real time. Did an infrequent customer with a high Klout score just purchase a promotional item? What if you provided a “surprise and delight” discount (or free product/service/food) to that customer in hopes that her network of followers on the social networks will see a tweet about her great experience?

What do you think? If you disagree (or even, heaven forbid, agree), please comment below or send me a private message. Or check out the Twitter discussion on @todd_michaud.


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