15 November 2012

Kenya: Customer Loyalty Means More in Era of Social Media

The newly evolved consumer is relating differently to loyalty programmes. A few brains in our think office have been thinking about how technology is increasingly shaping the face of consumer loyalty programmes.

People are increasingly looking to brands to help them get more out of their resources, especially those that are scarce and therefore most highly prized.

By zeroing in on these areas (and by understanding that different individuals suffer from different types and degrees of scarcity), there is a significant opportunity for brands to make their loyalty programmes more relevantly empowering. This does not mean that everything will change.

For many people, money is obviously a scarce resource (particularly at the moment). It follows that schemes must continue to reward spend - not least because purchase is, if not proof of loyalty, at least a prerequisite for it.

Aimia has written interestingly about how 2.0 loyalty programmes could be linked to purchase in new ways. They call it "stealing Amazon's thunder".

Their core thesis is that in an increasingly transparent world, you need to move towards offering customers the most competitive price possible - particularly if that customer is measurably and profitably loyal. In other words, you may need to sacrifice margin on today's sale in order to secure and maximise future revenues. So far, so obvious.

The smart bit is their recommendation that retailers make dynamic price matching an exclusive benefit for shoppers who sign up to a loyalty scheme. As they say: "Holding customers' hands while they find a lower price online may seem counterintuitive - until you remember that every action conducted via your app results in proprietary data that is owned by you rather than Amazon".

IGD also brings some useful insight to bear on this. Their research indicates that the current levels of promotional intensity can lead to shopper confusion; 44 per cent of us say we find it difficult to identify best value within a store.

Putting these two together, the implication is that pricing itself is likely to be a key lever within 2.0 loyalty schemes; with profitably loyal customers being rewarded with both greater transparency and lower prices.

As an indication of things to come. It seems inevitable that we'll see many more brands seeking to extract maximum value from the 'magic moments of engagement' they create by transitioning the audience to a second, generally mobile medium.

Those individuals who make the journey, and especially those who go on to share their experience of the journey, can expect rewards in the shape of exclusive content or unlockables or flash prizes.

This is the sort of amplification model Adam Stewart, marketing director of Play. com, is thinking of when he says: "As soon as you can get customers engaging within the social space, the viral element means the reach extends. And that's where the power comes from in terms of loyalty".

As it becomes increasingly critical for brands to develop a single view of the customer, Data will become an even more valuable prize than it is today. Download the whole of this white paper on www.spongegroup.com

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