Sunday 4th May

Posted by Poppy-
my secondary research on Loyalty

SMART PHONES & LOYALTY
Front Flip – One of the coolest features of this rewards system is integration with social networks, which lets customers "boast" about the promotions they received from your business or even share them with friends (as appropriate). Like the other services, the company offers analytics so you can glean more customer insights from tracked visit data. The company doesn't publish its pricing data. As of early last year, it had raised a total of $7.7 million in funding; it has a big following among McDonald's franchise owners. Perka – The Perka service is slightly different from the other offerings in that it is designed to reward actual transactions, not just check-ins. Customers get personalized credit: cashiers or store personnel register their name. There are Android and Apple iOS mobile apps for them to manage their accounts, but Perka also used SMS text messages so that people with older phones can be included in promotions and rewards offers. The service starts at $35 per month.

SpotOn –This program uses both plastic loyalty cards and mobile apps for Android or Apple iOS. Customers using the mobile apps record their visits by scanning a QR code on their smartphone at the merchant's check-in tablet. (The service also integrates with Passbook to register "Spot" visits.) Right now, SpotOn is in about a dozen markets including San Francisco, Dallas, New York, Miami, San Antonio, Cleveland and Louisville, Kentucky. "Many people want to shop locally and this provides engagement opportunities," said Matt Hyman, co-founder of the company. The service is $60 per month, which covers an unlimited number of transactions; there are no per-card transaction fees (some other programs charge 25 cents to 30 cents for every transaction involving a plastic card). http://www.zdnet.com/7-apps-to-take-your-customer-loyalty-program-mobile-7000025654/

Consumers are ditching plastic loyalty cards and turning to their smartphones instead to save and spend loyalty points. According a new survey of 2,000 consumers by CloudZync, most wallets are still bulging with an average of four traditional loyalty cards but consumers access an average of six loyalty schemes via their smartphone.

Sainsbury’s, Tesco and Waitrose are lagging behind when it comes to mobile loyalty schemes – just 36% of those surveyed said that they access supermarket schemes through the device in their pocket, dropping to 33% for coffee shops and 27% for pharmacies. Be it on mobile or hard plastic, consumers were found to collect their
points but failing to claim the loyalty rewards. According to the findings, loyalty card users have on average of £83 worth of redeemable points across their loyalty cards at any point in time, and UK shoppers cashed in on over £4billion1 worth of loyalty card points over the past year – yet 150million points remained unclaimed as consumers simply didn’t know how to redeem them. “While it’s clear that traditional cards are still doing well in many sectors, retailers that don’t embrace smartphones and tablets as part of their loyalty schemes risk being left behind by those businesses that see the opportunity these devices offer to engage consumers in new ways. Mobile gives retailers a platform through which they can build more personal relationships with customers while providing them with access to offers and promotions in a more convenient way, so they never miss out.” http://www.mycustomer.com/news/smartphones-next-generation-customer-loyalty-cards


LOYALTY SCHEMES INFO According to Inc., it costs a business about 5-10 times more to acquire a new customer than it does to sell to an existing one -- and on average those current customers of yours spend 67% more than a new one.

VIRGIN TIER LOYALTY SCHEME - Virgin Airlines’ Flying Club inducts members at the Club Red tier, then bumps them up through Club Silver and Club Gold. Club Red members earn miles on flights and get discounts on rental cars and hotels. Club Silver members earn 50% more points on flights, expedited check-in, and priority stand-by seating. Club Gold members get double miles, priority boarding, and access to exclusive clubhouses where they can grab a
drink or get a massage before their flight. The key is to offer benefits in the early stages to hook the customer into coming back. Once they do, they’ll realize that "gold" status isn’t unattainable, and offers really cool benefits.

PATAGONIA - Patagonia, an eco-friendly outdoor apparel company, realized that their customer needed more than just points and discounts from a loyalty program. Late last year, the company implemented its Common Threads Initiative. In it, they partnered with eBay to help customers to resell their highly-durable Patagonia clothing online through the company website… be sure you’ve researched and designed an in-depth customer persona!

AMERICAN EXPRESS - American Express has a huge partner base with companies across the country. Their recent Twitter Sync campaign rewards customers for tweeting about them by syncing discounts and deals with Twitter #hashtags. According to Visibli.com, cardholders have redeemed over $2,000,000 in rewards. Participating companies that are benefitting from their coalition with Amex include
Whole Foods, Staples, and Zappos.

GRABHUB - GrubHub, an online food ordering and delivery website, started Yummy Rummy late last year. Once customers place three unique orders through GrubHub, regardless of price, they get to play a game for a chance of winning free stuff. Players choose one of four cards and have a 25% chance of winning a free dessert, drink, gift card or other cool stuff. (all from http://blog.hubspot.com/blog/tabid/6307/bid/31990/7-Customer-Loyalty-Programs-That-Actually-Add-Value.aspx)

BAD CASE STUDIES…

JetBlue’s TrueBlue program, wherein frequent flier miles expired one year following the day they were earned. Without a doubt one of the worst programs in the world around expiry policy, most program members were unable to earn enough miles in one calendar year to redeem them before they expired. The program finally changed this outdated and draconian policy, such that now miles never expire if the member makes at least one flight a year with the airline.

Starbucks My Rewards program is notoriously stingy; members need to make 15 purchases to earn 15 stars, which then gets them just one free coffee – that’s a 6.67% earnings ratio. Even worse, it takes 15 transactions, not actual cup purchases, to earn a free cup – so if a customer buys more than 1 coffee in a single transaction, it still only counts as one star. One of its key competitors – Caffe Nero, has a similar program, but theirs requires just 9 cups to be purchased to earn a free coffee. Starbuck’s My Rewards is so notorious for how stingy it is that dozens of blogs and Facebook pages have been created around boycotting it. final citation for Starbucks; not only is it stingy, not only did its program get worse, but it also has an awful fulfillment process. For some reason, the reward for getting 15 stars (a free drink) is distributed via mail (that’s right, mail), in the form of a coupon for a free drink. So when a member gets to 15 stars, he or she can’t get the free drink right away, but must wait for a coupon to come in the mail. Money can be loaded onto the card, it is also used to earn stars, but for some reason it can’t be used to redeem benefits? Starbucks has a great deal to learn about loyalty programs.

Ikea Family, the global furnishing company’s loyalty program, that rewards customers only with discounts on select products and throw-ins like free coffee. There is no points system, thus no accumulation based on spend. Essentially one can get discounts on a couple products, but will not be rewarded for spending tens of thousands of dollars. Thus, the right behavior of spending more and more over several years is not rewarded at all – a truly disappointing program from a wonderful company. (all from http://forteconsultancy.wordpress.com/2011/02/28/loyalty-programs-gone-wrong-–-ten-common-mistakes-to-avoid/)