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TOWARDS REAL LOYALTY
12 steps to real customer engagement
GROWING LOYALTY
Beyond Traditional Reward Programs
2
LOYALTY IS AN EMOTION
…SO WHY DO WE TREAT IT
LIKE A TRANSACTION?
WE HAVE BECOME VICTIMS OF HISTORY AND HABIT
1700s
COPPER TOKENS
1800s
COUPONS
1930s - 70s
TRADING STAMPS
1980s
DEREGULATIO...
WE CONTINUE TO
INVEST…
IT MATTERS TO THE MARKET
S&P 500
High Focus on
Loyalty Programs
Low Focus on
Loyalty Programs
Source: McKinsey Corporate P...
-1%
revenue
growth
DONE WRONG =

RISK MARGINS
-10%
lower
EBITDA
A DISCOUNT CARD
IS NOT ENOUGH
ONE SIZE
DOES NOT FIT ALL
LOYALTY NEEDS
NURTURING
DOING THE SAME AS OTHERS LEADS TO FAILING IN THE SAME WAY
Customer

engagement
ROI over
time
SO.. WHAT COULD
BE DIFFERENT?
HOW TO SHAPE
YOUR FUTURE?
WHERE DID IT GO
WRONG?
HOWWHAT WHEN
HOW DO YOU USE
WHAT YOU KNOW
ABOUT ME?
ENTERTAIN
EDUCATE
ENGAGE
WHAT IF, INSTEAD OF BUYING LOYALTY, WE RECLAIMED
WHAT CREATES IT?
Quality
Meeting Needs
Consistency
Availability
Enjoyment...
WHAT WOULD DIFFERENT LOOK LIKE?
Connected
PersonalRelevant
Contextual
Customer
Centered
CONTEXTUAL
PLACE
PURPOSE
PERSONAL
RELEVANT
EXPERIENCES
SERVICE
ACCESS
PRESTIGEPRODUCT
PRICE
54%More spend
2xMore referrals
83%More Engaged
CONNECTED
LOYALTY IS AN EMOTION
A crowd is a tribe without a leader.
A crowd is a tribe without communication.
Most organisations sp...
29
30
CUSTOMER-CENTRED
Big
Data
Ubiquitous
Touch
Cloud
Insight Engage
Anywhere
Responsive
Adaptable
Data Ubiquitous
Touch
Cloud
SO.. WHAT COULD
BE DIFFERENT?
HOW TO SHAPE
YOUR FUTURE?
WHERE DID IT GO
WRONG?
So how do you
break the cycle of
self-abuse?
1. CONTEMPLATE: WHAT IS YOUR WHY?1. CONTEMPLATE: DEFINE YOUR CUSTOMER’s WHY
38
2. PREPARE: DESIGN THE EXPERIENCE
BUILDING PROGRAM ELEMENTS THAT DELIGHT CUSTOMERS
Functional
Reliable
Usable
Pleasurable
Meaningful
YAY!
Convenient
Focused...
42
95%
engagement
rate
3. TAKE ACTION: TEST AND EXPERIMENT
TIME
DEGREEOFCOMMITMENT
Traditional programs
Experimentation
Moments of delight
Standard, static
program
Long cycles,
then relaunch
4. MAINTAIN: IT’S NOT JUST “ONE AND DONE”
Today Future Vision
IDEA

ST...
CREATE THE PLATFORM FOR EXPERIMENTATION
Concept
Ideas and
prototypes
Explore with
customers
Pilot
Few segments/
sites
Cont...
THE PATH TO CONTINUOUS LOYALTY
Baking innovation
into the mindset
and culture of your
brand and people
Creating a
capabili...
47
• Not all customers are created equal. Avoid over-
investing by being all things to all people
• Value is variable. Custom...
Dianne Inniss
dinniss@thoughtworks.com
THANK YOU
Dan McMahon
dmcma@thoughtworks.com
Growing Loyalty Beyond Traditional Reward Programs
Growing Loyalty Beyond Traditional Reward Programs
Growing Loyalty Beyond Traditional Reward Programs
Growing Loyalty Beyond Traditional Reward Programs
Growing Loyalty Beyond Traditional Reward Programs
Growing Loyalty Beyond Traditional Reward Programs
Growing Loyalty Beyond Traditional Reward Programs
Growing Loyalty Beyond Traditional Reward Programs
Growing Loyalty Beyond Traditional Reward Programs
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Growing Loyalty Beyond Traditional Reward Programs

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Whether you’re a retailer, a bank, or a travel business, everyone is looking for ways to create a deeper sense of connection with customers and gain their loyalty.

Somewhere through history we lost our way. Instead of building real loyalty, we became trapped by reward programs founded on the exchange of tokens for transactions. We’ve invested significant time, money, and energy in programs that are increasingly homogeneous and non-differentiating in the eyes of consumers.

In this presentation Dianne Inniss, a retail customer experience and strategy leader, provides practical advice for how to move brands towards a differentiated future built on real customer loyalty.

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Growing Loyalty Beyond Traditional Reward Programs

  1. TOWARDS REAL LOYALTY 12 steps to real customer engagement GROWING LOYALTY Beyond Traditional Reward Programs
  2. 2 LOYALTY IS AN EMOTION
  3. …SO WHY DO WE TREAT IT LIKE A TRANSACTION?
  4. WE HAVE BECOME VICTIMS OF HISTORY AND HABIT 1700s COPPER TOKENS 1800s COUPONS 1930s - 70s TRADING STAMPS 1980s DEREGULATION 1990s DIGITIZATION 2000s MOBILE TOOLS
  5. WE CONTINUE TO INVEST…
  6. IT MATTERS TO THE MARKET S&P 500 High Focus on Loyalty Programs Low Focus on Loyalty Programs Source: McKinsey Corporate Performance Analysis Tool – Returns on 55 major companies with a high/low focus on loyalty programs. Index SHAREHOLDERS HAVE REWARDED COMPANIES FOR HAVING A FOCUS ON LOYALTY
  7. -1% revenue growth DONE WRONG =
 RISK MARGINS -10% lower EBITDA
  8. A DISCOUNT CARD IS NOT ENOUGH
  9. ONE SIZE DOES NOT FIT ALL
  10. LOYALTY NEEDS NURTURING
  11. DOING THE SAME AS OTHERS LEADS TO FAILING IN THE SAME WAY Customer
 engagement ROI over time
  12. SO.. WHAT COULD BE DIFFERENT? HOW TO SHAPE YOUR FUTURE? WHERE DID IT GO WRONG?
  13. HOWWHAT WHEN
  14. HOW DO YOU USE WHAT YOU KNOW ABOUT ME?
  15. ENTERTAIN EDUCATE ENGAGE
  16. WHAT IF, INSTEAD OF BUYING LOYALTY, WE RECLAIMED WHAT CREATES IT? Quality Meeting Needs Consistency Availability Enjoyment Recognition Value EXPERIENCE
  17. WHAT WOULD DIFFERENT LOOK LIKE? Connected PersonalRelevant Contextual Customer Centered
  18. CONTEXTUAL
  19. PLACE PURPOSE
  20. PERSONAL
  21. RELEVANT EXPERIENCES SERVICE ACCESS PRESTIGEPRODUCT PRICE
  22. 54%More spend 2xMore referrals 83%More Engaged
  23. CONNECTED
  24. LOYALTY IS AN EMOTION A crowd is a tribe without a leader. A crowd is a tribe without communication. Most organisations spend their time marketing the crowd. Smart organisations assemble the tribe. SETH GODIN
  25. 29
  26. 30 CUSTOMER-CENTRED
  27. Big Data Ubiquitous Touch Cloud Insight Engage Anywhere Responsive Adaptable Data Ubiquitous Touch Cloud
  28. SO.. WHAT COULD BE DIFFERENT? HOW TO SHAPE YOUR FUTURE? WHERE DID IT GO WRONG?
  29. So how do you break the cycle of self-abuse?
  30. 1. CONTEMPLATE: WHAT IS YOUR WHY?1. CONTEMPLATE: DEFINE YOUR CUSTOMER’s WHY
  31. 38
  32. 2. PREPARE: DESIGN THE EXPERIENCE
  33. BUILDING PROGRAM ELEMENTS THAT DELIGHT CUSTOMERS Functional Reliable Usable Pleasurable Meaningful YAY! Convenient Focused on experiences Focused on tasks FEW PROGRAMS CROSS THIS LINE
  34. 42 95% engagement rate
  35. 3. TAKE ACTION: TEST AND EXPERIMENT TIME DEGREEOFCOMMITMENT Traditional programs Experimentation Moments of delight
  36. Standard, static program Long cycles, then relaunch 4. MAINTAIN: IT’S NOT JUST “ONE AND DONE” Today Future Vision IDEA
 STREAMS INNOVATION CAPABILITY BUILD, TEST & LEARN GO STOP PIVOT
  37. CREATE THE PLATFORM FOR EXPERIMENTATION Concept Ideas and prototypes Explore with customers Pilot Few segments/ sites Continue learning Scale up Refine and expand Manage capacity Rollout Loyal, free and paid Mainstream Evolve Becomes commodity Change the game
  38. THE PATH TO CONTINUOUS LOYALTY Baking innovation into the mindset and culture of your brand and people Creating a capability that evolves with your customers over time
  39. 47
  40. • Not all customers are created equal. Avoid over- investing by being all things to all people • Value is variable. Customers value more than money. Successful programs depend on understanding the right levers • Experience matters. Moments of connection and relevance drive repeat behavior • Test, learn, repeat. Design for iterative tests and take advantage of test data for continuous delivery and refinement TAKE-AWAYS
  41. Dianne Inniss dinniss@thoughtworks.com THANK YOU Dan McMahon dmcma@thoughtworks.com

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