The world continues to evolve, for better or for worse. There is no stopping the inevitable and if you resist the forces of nature, it can put you behind the curve. That said, why do so many companies feel complacent on old paradigms and schemes when it comes to loyalty and reward programs? Resisting the evolution could be detrimental to a company’s long-term growth, customer retention and acquisition, as well as reputation.
Part of this evolution is a shift, from what we call in financial services relationship rewards or enterprise rewards, to enterprise loyalty. Enterprise loyalty consists of raising the bar on reward schemes and loyalty marketing to a comprehensive strategy that traverses each business unit within a company, creating a common focus on customer engagement. The evolution of a company’s mindset in its progress from a rewards program to an enterprise loyalty strategy is a long, arduous process. Getting it right requires a holistic view of the customer and cooperation – from every business unit, from customer service to finance to product. It requires each product owner and manager to say “how will this affect our customer…how will they experience it?” Furthermore, those efforts are tracked so that the results and effects on the customer can be detected and fed back into the business to generate growth and influence long-term engagement.
It is no longer enough to host a rewards program that gives something back to the customer for their relationship with an institution. Enterprise loyalty is raising the bar on how we will approach customers for a long time to come.
Advancements in technology are really what make this feasible. To view a customer from multiple angles and touch points, while aggregating deep insights and reacting efficaciously, would not have been feasible a decade ago. Today we find ourselves relying on more partnerships and investing internally to keep up and deliver a premier experience to keep the customer engaged.
The players in loyalty solutions have changed too with the introduction of social engagement and digital everything. Convergence and creative collaboration are bringing institutions to the table, everywhere. We‘ve advanced from a single channel to multichannel to omnichannel, all while touting the importance of a consistent message no matter where and how you encounter a customer.
It’s not a secret companies are competing for attention. At the same time, the customer’s attention span has also been reduced, from the 20-second walk from the mailbox to the front door, to a two-second scan of an inbox from the lock screen of their mobile device. By evolving to a singular customer view, marketers can eliminate the spam they create with untargeted messages and produce more rich and relevant content for the customer. We have begun to see messages that are more integrated. In our own company, for example, MasterCard Loyalty Solutions is combining messaging to cardholders from traditional points programs with targeted merchant funded and card linked offers. It is streamlined, personalized and it strengthens the value to the end customer.
Ever heard the phrase"…the whole is greater than the sum of its parts?" Aristotle was right. Especially when it relates to the Law of Conservation of Mass where “matter can neither be created nor destroyed in an isolated system.” The same is applied to the modern day example of customer loyalty. While we aim to have fewer and more meaningful touch points with customers, the power of enterprise data has the potential to create a consolidated value that is greater than ever before.
On the flip side, not everything about loyalty evolution is digital and patent-worthy. We are also seeing renewed interest in getting back to the basics with customers, granting them a voice, and focusing on creating meaningful relationships. These concepts have come in and out of trend studies, but still hold a place in the front row of customer service. To compete significantly, companies must create more soft benefits that truly differentiate their product or services and generate loyalty. While rewards are still the #1 reason a person chooses a particular payment card over another, there are other intangible benefits rising to the top.
Predicting the next “It” movement in the loyalty space is not simple. Most institutions are still not willing to take the risk to select who the mobile wallet champions will be, how NFC /chip / EMV will affect rewards and behavior, or how consumers and regulations will evolve in response to data collection and reaction.
Thankfully, you do not have to have the wisdom and insight of Aristotle to survive. What we are finding is that there are many right answers to where the path of Loyalty leads. As in the past, the strongest survivors will be those that have a willingness to be flexible and try new things. Definitively, customer centricity is the true north in this quest, no matter which road is taken, which technology is leveraged and what partnership is formed.
Written By: Chris Bond-MasterCard. Chris Bond is the group head, Cardholder Solutions at MasterCard.