In the 12th CMO goes Tech event that we named “Loyalty Is Dead, Long Live Loyalty”, we deep-dived into the world of loyalty and talked about how brands invest in loyalty programs and a sense of belonging - the community. We went into the event with the perspective that loyalty is a whole business game, not just a program and that loyalty perhaps is rather about a broader construct, one which, at a fundamental level, is about some very simple and very human things: consistency, value, reliability, and a sense of belonging - the community. And it seemed we were not too far off from the truth, judging from the discussion.
Elsa Bernadotte, co-founder and COO of the food waste startup Karma kickstarted the event by talking about the challenges we face when it comes to food waste, Karma’s unique solution and the importance of building a loyal community when your ambition is to change the world. She passionately explained how customer retention and loyalty is extremely important in maximizing the average lifetime value and building a strong business model. She told us about how building a movement of loyal customers, not only helps them grow organically through word of mouth - which Karma has done fairly successfully but also how it strengthens their positions as a brand against competitors. By building a community through three different avenues; personalisation through data, reward via gamification and a sense of belonging: storytelling & purpose, it was clear that Karma has done an excellent job in creating loyal customers.
Åsa Leckner Tham, Client Director and Head of CRM & Loyalty, Kaplan, Part of Accenture Interactive, continued the discussion by sharing the latest and the greatest when it comes to loyalty trends and more specifically in regards to loyalty programs. We, the listeners, got to take part in seven (7) very interesting trends that they had identified around the world. To summarize, Åsa argued that most loyalty programs today are transaction-based which might not be enough, as it’s not building an emotional connection. We should instead focus on everyday interactions; delivering on customer needs that go beyond the product and the traditional customer journey. The best loyalty interactions put people first, aiming to delight, challenge, inspire, motivate and ultimately, produce tangible results.
We ended the night with a panel debate, which also included data and privacy lawyer Ceyhun N. Pehlivan, Managing Associate - Linklaters, and Mattias Olsson, CEO & Partner - Apegroup. They discussed relevant topics such as loyalty, communities and the international transfer of data which is important due to Schrems II ruling and its broader implications.
Many thanks to our great speakers and panel members.
Key takeaways from the evening:
Loyalty programs
Most transaction-based loyalty programs today are not building an emotional connection. We should instead focus on everyday interactions; delivering on customer needs that go beyond the product and the traditional customer journey.
Deliver on customer needs that go beyond the product and traditional customer journey, to provide the customer with meaningful value in their everyday life. By extending the customer experience beyond the core offering, the member will have more ways to interact and engage with the brand
Instead of rewarding loyal customers’ behaviour with rational benefits and cost-savings, give them something that truly drives engagement and long-term loyalty; experiences to remember. Loyalty is nurtured by meaningful and engaging experiences.
Experience-based loyalty is created on the notion that meaningful, emotional experiences are more engaging and better than relational cost-savings and the occasional discount. Much better.
Community
Building a community is a key aspect and a key strategy to build loyal users.
Building a movement of loyal customers could help in growing organically through word of mouth and also strengthen our positions as a brand.
A community could be built through three different avenues; personalization through data, reward via gamification, and belonging: storytelling & purpose.
It’s important to have a strong purpose and having a brand story that speaks to the purpose. Something people believe in and that makes them want to follow you as a brand and as a company.
Data Protection
When drafting the terms and conditions of your loyalty program make sure that they’re as comprehensive and clear as possible and that you’re not misleadingly promoting loyalty programs.
With loyalty programs increasingly being linked to price promotions companies need to be aware that this might trigger regulatory, gambling, or lottery issues. It could even be problematic requiring points to buy entry into a promotion. Companies should offer a free method of entry into these promotions to ensure that there are no consideration issues.
Loyalty programs are one of the key ways that companies can collect personal data. However, the collection of personal data may trigger privacy issues. Companies need to be very transparent about their data collection and explain clearly how and what it is being used for.
Recording of the event will be made available during the weekend of February 20th-21st.