The Future of Loyalty
We were delighted to welcome Philip Shelper, CEO, and Stacey Lyons, Loyalty Director of Loyalty & Reward Co to the Stone & Chalk Event Lab, to discuss the rapidly evolving world of loyalty programs.
Since its inception in 2013, Loyalty & Reward Co has established itself as Australia’s leading loyalty consultancy agency, using a data-driven approach to provide clients with comprehensive insights into the many different aspects of loyalty. They have worked with several global brands, including McDonalds, Optus, and P&G.
Philip and Stacey were joined by a distinguished panel of industry guest speakers: Fran Ereira, Country Head (ANZ) of Klarna, Travis Tyler, Chief Product and Marketing Officer of 86 400, and Gary Cobain, CEO of PokitPal.
Philip began by discussing the (surprisingly) long history of loyalty programs - dating back to workers in Ancient Egypt who were able to exchange surplus food tokens for more luxurious items. The modern concept was born in 1850s New York City, when B.T. Babbitt, “The Godfather of loyalty programs” as Philip calls him, offered customers rewards in return for collecting cut-outs from the packaging of his soap products.
He emphasises the opportunity loyalty programs present for companies in developing deeper emotional bonds with customers, likely leading to increased retention levels, especially among customers who have an isolated negative experience. This is known as commitment theory.
The panellists discussed the emerging ‘megatrends’ of the industry, drawing on their own experiences to highlight the necessary dynamics of running a successful loyalty program.
AI & Data
AI-infused platforms are increasingly adept at learning individuals’ behaviours, enabling brands to send increasingly hyper-targeted and tailored messages, offers and rewards to their customers.
As Stacey explains, trailblazers such as Amazon, Netflix and Spotify have set high customer expectations for data-driven personalised services and communications. .“If it isn’t being used to deliver more meaningful experiences, customers will take their business elsewhere”.
Fran agrees, stating that a key differentiator between Klarna and their ‘buy now pay later’ competitors, is their ability to deliver relevant content and rewards to their customers. Klarna obtains key insights into individuals’ trends, likes and dislikes, by capturing data every time a customer transacts, whether it be an in-store purchase or via the digital cart.
Convergence of payments and loyalty
With consumers ever-more interested in finding ways to make their money go further, loyalty and payments are set to become increasingly intertwined.
Payment companies, such as PokitPal, are developing card-linking platforms where members can link their credit/debit cards directly with loyalty programs, so they automatically earn points and rewards when transacting at a participating merchant.
Payments are the real touchpoint for consumers and retailers. Gary explains, banks are finally starting to utilise the huge sets of data available to them to improve the personalisation of their propositions for customers.
86 400, Australia’s first smartbank, aims to drive advocacy and growth by going beyond a normal bank’s offerings, explains Travis. Their latest feature, Energy Switch, compares electricity plans by scanning over 200 data points from retailers and enables the customer to switch to a cheaper provider in minutes.
Gamification
The recent development of white label solutions has seen several companies, including McDonalds and Boostjuice, develop bespoke digital games for their specific audience. The games generally reward their members with prizes and special offers. Philip believes this space has an “enormous future”.
The panellists agree that innovative, data-driven loyalty programs present a huge opportunity for businesses, across industries, and should be a key component of their marketing strategies moving forward. Customer expectations are rising, and businesses need to keep up.
You can watch the full discussion on our YouTube channel here.
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