What is a loyalty program? Is it essentially different from a marketing program? Is it important to have a loyalty program at all? And if you do have one, how much of an advantage is having a state-of-the-art one?
These are all valid questions and offering exhaustive answers would extend far beyond the compass of this blog. We can, however, touch on the key points that should guide any evaluation of the options telcos have in this area.
First, it’s more or less axiomatic that today innovative, market-leading companies are using rewards (loyalty) programs to surprise, delight, create and retain their customers. Experience tells them that if they can identify and solve customers’ problems, anticipate their future needs, and soothe pain points then Net Promoter Scores go up and churn goes down.
The bedrock example of rewards probably comes from the frequent flyer programs long found in the airline industry. It’s established that the pursuit of air miles points drives a loyalty that, in many cases, over-rides even price. Carriers are chosen because of points accrued, even where their price is marginally higher. But loyalty programmes today have to be much more than this.
The starting point for modern rewards and loyalty programme is most commonly achieved via an app an app for customers’ smartphones. Members of the reward program (ideally all customers) download this and sign up without any inconvenience. Once you learn how to use it, doing any business with the mobile operator instantly becomes easier. And, at a time when the company that is the most convenient and easy to work with wins in a world where attention spans are decreasing, that’s vital.
Once downloaded, the boundaries of what a great loyalty programme can be are limited (almost) only by the imagination (or the functional limitations of the software, which makes securing state-of-the-art technology critical).
Orange Belgium’s World Communications Award-winning programme is an example of how to “surprise and delight” customers by moving beyond traditional loyalty points systems as time has shown these to be increasingly ineffective.
So what’s the right approach? For one thing, reward tenure...both the amount spent and number of years with the operator. For another, the best programmes fit a reward to an individual, so everyone doesn’t get the same outcome but, rather, something the recipient is personally likely to value.
One key success metric is interactions. In points-based approaches, customers may not spend points they’ve won, particularly so outside the airline industry’s miles programmes. Short-sighted thinking considers this good news simply as the telco saves a bit of money. But great loyalty programming means considering non-interactions bad news so reward optimization is important.
The right loyalty programme and the technology to drive it? Clearly, there are option in the market (though not all of them award-winning). Some of the results and programmes described here deployed Evolving System’s stable of large scale (iconic) Engagement & Loyalty programs to drive highly innovative gamification-led concepts. Evolving Systems’ battle-tested, robust technology platform has been proven to deliver the ability to communicate with and engage customers in real-time with tailored rewards that appeal on an individual basis. This means getting Loyalty strategy right.