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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
DEREGULATION
1990s
DIGITIZATION
2000s
MOBILE
TOOLS
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 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
-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
Recognition
Value
EXPERIENCE
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 spend their time marketing the crowd.
Smart organisations assemble the tribe.
SETH GODIN
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 on experiences
Focused on tasks
FEW PROGRAMS
CROSS THIS LINE
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

STREAMS
INNOVATION
CAPABILITY
BUILD, TEST &
LEARN
GO
STOP
PIVOT
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
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
47
• 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
Dianne Inniss
dinniss@thoughtworks.com
THANK YOU
Dan McMahon
dmcma@thoughtworks.com

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