1. Beyond the Basics:
Four other Loyalty
Drivers
Welcome Real-time
Retail banks today are 01. The level of ‘social integration’ between
consumers is also now at an unprecedented
racking their brains on Is loyalty an attitude or a level. Social media networking is resulting in
Welcome to stand out from
how best Real-time behaviour and does it matter? a dramatic enlargement of the social circles
the crowd when it comes that each consumer can influence as a result
of their ‘attitudinal loyalty’. It’s therefore hardly
to retaining the loyalty of Marketing practitioners commonly discuss surprising to see new loyalty programmes
their customers; and more consumer loyalty in terms of ‘attitudinal’ focusing their primary attention on ‘social
specifically, their payment and ‘behavioural’ traits. ‘Attitudinal loyalty’ is influencers’ rather than repeat purchasers.
card customers. the predisposition of a consumer to prefer A good example of this is the ‘AHA Life
a particular brand or product.‘Behavioural Influencer Network’ recently launched by
No longer is a loyalty programme with rewards loyalty’ is the actual behaviour exhibited by the online retailer AHALife.
via points or cashback considered exceptional. consumer, most typically measured in terms of
But the harsh reality is that if you don’t have this purchases made. As Winston Churchill so aptly put it: “Attitude
as a basic part of your programme, no matter is a little thing that makes a big difference”.
how ‘uninnovative’ it’s considered by today’s Conventional wisdom leans more towards The next milestone for loyalty programmes lies
standards, you will not retain your position in the ‘behavioural loyalty’ as the most effective in effectively nurturing and harnessing ‘attitudinal
playing field of payment cards. measure of consumer loyalty, due to the ease of loyalty’ to maximise the levels of social influence
measurement and immediate financial benefits amongst connected consumers.
The front runners are now looking even further realised. But while this approach is practical, it
ahead; trying to grasp what it is exactly that fails to take into account the changing nature of
makes their cardholders put their bank card both the consumer and retail environments.
top of wallet.
Today’s retail environment is dominated by
Let’s take a look beyond the basic loyalty price-sensitive consumers with access to
drivers of points accumulation, cashback or perpetual ‘daily deals’ and ‘discount-related
discounts. Let’s take a look at four other drivers offers.’ As a result, it has become increasingly
that are increasingly important and yet relatively difficult to separate genuine ‘behavioural loyalty’
untapped today. from casual and coincidental relationships.

2. 02. Higher-value consumers expect differentiated
rewards and privileges from the masses; it is
‘Soft’ rewards, on the other hand, are more
likely to nurture and strengthen the emotional
Offering consumers relevant an essential component in delivering a loyalty bond with the consumer, whilst also serving
rewards they actually want programme that is attractive across the board. to reduce the incidence of effort-reward value
These consumers know how valuable they are comparisons against other loyalty programmes.
and expect to be treated accordingly, failing Such rewards can be in the form of priority
The modern consumer anticipates an which they are likely to defect to someone who lanes, personal concierge / shopper services,
increasingly personalised service, from ‘highly does recognise their value and commitment. lucky draws or even invitations to exclusive
targeted’ advertising when surfing the web, events. In all cases these rewards should be
to ‘relevant’ product recommendations while Research conducted in this field by Dreze given selectively to emphasise to the consumer
shopping online. As a result, our lives are now and Nunes has shown that tiered loyalty that their value has been recognised and,
inundated with targeted and more relevant offers programmes are perceived to be more therefore, rewarded accordingly.
and information. attractive, not only by the consumers who earn
the extra rewards and privileges, but also, When considering ‘soft’ rewards, an effective
Many loyalty programmes still fail to offer surprisingly, by those consumers that do not. It approach is to offer rewards that ‘money
‘relevant’ redemption choices specific to various seems that bottom-tier consumers also prefer cannot buy’. This maximises the perceived
consumer segments. Those that do offer more having something to aspire to, even if they know value to the consumer and increases
choices, often leave the consumer to trawl that they are unlikely to qualify to a higher tier. stickiness as the consumer is more likely to try
though catalogues looking for something of to retain their ‘special perks’ over time.
interest to them. This risks the consumer losing
interest and quitting before managing to find
04. A good example of a ‘money cannot buy’
something relevant. Providing the right blend reward is exclusive ‘VIP backstage concert
of ‘hard’ and ‘soft’ rewards passes’ that simply cannot be purchased on
To really maximise engagement, loyalty the open-market and thus have a perceived
programmes need to reframe the redemption value that far outweighs the underlying financial
process and proactively guide the consumer cost of the reward. This type of exclusive reward
Most loyalty programmes reward consumers
towards redemption choices that are relevant could be offered to exceptional customers,
with ‘hard’ rewards, typically in the form of
to them. To do this they need to take into auctioned off to the highest bidder, or simply
discounts, gift certificates, free merchandise
account traditional segmentation criteria such awarded to the winner of a prize draw.
and cash-back. As these rewards are
as life-style and life-stage. More importantly,
tangible in nature, they are easily copied
loyalty programmes should dynamically adapt
by competitors and consumers often jump
to reflect the actual redemption behaviour of
from one brand to another as soon as new So the next time you are considering
comparable consumers.
programmes offering a better rate of reward your loyalty programme, look beyond
appear. Highly competitive sectors such as the obvious. Simple tweaks can
03. grocery, fuel and credit cards are especially differentiate between becoming another
prone to this type of leakage, unless they are
The value of differentiated ‘me too’ programme versus standing
able to establish a sense of ‘emotional’ loyalty
rewards out as an innovator.
with the consumer.
Welcome Real-time is a pioneer and
One of the most prominent illustrations of this
With the exception of the airline and hotel type of behaviour can be observed by looking leader in card loyalty programs around
industries, most loyalty programmes focus at the often hyped ‘daily deal’ promotions that the world, supplying and managing
more on rewarding ‘frequent shoppers’ rather are becoming increasingly popular. Whilst ‘daily the loyalty systems of some of the
than loyalty in the traditional sense. The majority deals’ are an extremely effective advertising biggest banks in each country. 300,000
fail to differentiate truly valuable consumers tool, a consumer who visits a restaurant simply transactions across 1 million merchants
from the masses. because they are running a discount promotion and 50 million cardholders run on one
is just as likely to visit a different restaurant next unique platform: Welcome XLS.
Tiered loyalty programmes that provide week for the very same reason.
differentiated rewards and privileges based on
the level of commitment exhibited by consumers That said, it is important to remember that
are now gradually appearing in mainstream ‘hard’ rewards are an essential part of any
sectors. Well known brands such as Starbucks, loyalty programme, but it is imperative that they
Safeway and Timberland all have tiered loyalty are given to the right consumers at the right
programmes in at least one of their respective time and for the right behaviour. Failing to do
markets, and more brands are likely to follow in so results in these rewards simply becoming
their footsteps in the not so distant future. normal and expected by the consumer, losing
their effectiveness over time.
Let us help you to turnaround your cards business.
Visit www.welcome-rt.com or email us at marketing@welcome-rt.com
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