Loyalty Advertising

Improving loyalty programmes with smart technology


By Charlie Hills, Managing director and head of strategy

April 1, 2019 | 6 min read

21st century loyalty programmes are striving to improve their customer experience and impact, from more personalised propositions (e.g. Nectar’s test in the Isle of Wight and Vodafone’s new VeryMe programme) right through to new and innovative uses of technology to improve customer experience. Smart technology such as Geolocation, Artificial Intelligence, Augmented Reality and Virtual Reality are changing the experience of loyalty programmes as we know it, according to Forbes. As these technologies continue to improve, so do customer’s loyalty experience.

Deloitte found that 88% of mid-market companies are already using some form of virtual or augmented reality as part of their business. Artificial intelligence will be a core customer experience investment over the next 18 months for brands. 47% of companies will use chatbots for customer care and 40% will deploy virtual assistants.

Technology has vastly improved the customer experience of loyalty already, since the very first loyalty programme was conceived. In fact, the early programmes were also enabled by the smartest tech of the time. A decade ago, the majority of loyalty programmes all existed through plastic or cardboard cards that were either swiped or stamped after purchase, edging customers ever closer to their generic free gift or discount off next purchase.

Caffè Nero is a classic example of an old programme evolving with smart tech – from the paper stamp cards of the last 20 years to the new smart app experience, which allows customers to pay directly and allows Caffè Nero to collect data about customers such as the products they purchased, their frequency, time and location of purchase. They can now target customers individually with rewards and incentives to try new products (The Grocer).

Loyalty programmes are continuously pushing and improving the boundaries of customer experience with smart tech. The latest loyalty tech hero is British Gas with its Rewards programme. Launched in 2017, it now services millions of loyal customers. It’s the first of its kind in the utility sector, offering unique benefits not available in other programmes such as free energy days and tickets to The O2 in their exclusive Rewards terrace. And now they are doing something to really excite their members this Easter – using Augmented Reality.

British Gas Rewards has partnered with Mando-Connect, Spark Lab and Centrica XR Solutions (a team dedicated to promoting immersive technologies) to create an exceptional and brand new augmented reality experience for their members, which can be accessed online (so there's no need for them to download a separate app). Members will have the chance to win millions of prizes (including family holidays, smart technology devices, meals out and even chocolate bars) by helping Wilbur the Penguin (the lovable British Gas mascot) to locate Easter eggs – a family friendly activity. This innovative new gamified and augmented reality experience will be available to all British Gas Rewards customers this April.

British Gas have created an AR Easter egg hunt with their loveable penguin mascot.

But British Gas Rewards isn’t the only loyalty programme using new technology to turbo charge its customer experience.

Amazon Prime

Whilst many argue that Prime is a subscription not a loyalty programme, there is no arguing the impact of Prime on people’s loyalty to Amazon. The Prime Day event is a great example of how technology can improve the customer experience of a loyalty programme. Prime Day deals are specifically for Amazon Prime members and throughout the event, members receive regular personalised notifications and recommendations. Smart use of tech has not only changed the experience of the programme, but it’s changed the way people shop. 91% of Prime members renew for a second year and 96% of those renew for a third year (Forbes).

Sephora VIB Rouge

Sephora is another powerful example of how smart use of tech has improved the customer experience of a brand’s loyalty programme, in this case Sephora’s Beauty Insider. The Very Important Beauty Insider unlocks if $350 is spent during a calendar year. The highest tier, VIB Rouge, is available to customers spending $1,000 or more during the year. VIB Rouge has become a sought-after status marker that the beauty community aspire to have and members enthuse about the rewards they receive online and even upload “un-boxing” videos.

Sephora have created a tiered shopping experience where shoppers can access exclusive products the more they pay.

Using smart tech, Sephora creates personalised newsletters based on Beauty Insiders’ individual purchases, offering customised beauty profiles based on age, skin type and personal preferences, as well as profile-aligned free gifts. This tech-fuelled personalisation has driven higher than ever customer engagement and made significant impacts to the brand’s bottom line.

Nordstrom Rewards

Nordstrom Rewards is doing something a little different - using geolocation to improve customer experience and drive sales. Nordstrom Rewards customers make up more than half of the retailer’s sales so they are an important customer group. Users can create a wish list of their favourite items within the app and, if they are within a certain distance of a Nordstrom store, the app uses beacon technology to send push notifications to nudge customers to shop. Smart tech driving engagements as well as sales.

Chipotle Rewards

Last, but not least, Chipotle has just this month launched their new loyalty programme, Chipotle Rewards in America, and are utilising smart technology through their partnership with Venmo (the online payments app). It is a perfect use of smart tech to improve customer experience in loyalty, as so many existing customers already use Venmo to split the bill.

So what's next for smart tech?

Smart tech is significantly improving the customer experience of loyalty programmes in the UK and globally. Used right, technology can turbo charge customer and member acquisition, engagement and retention and drive sales as well. We are excited to see what smart new uses of technology arrive in loyalty this year – in particular we can’t wait to see how virtual reality can change things. But for now, there's British Gas Rewards exciting Easter extravaganza to think about!

Charlie Hills is managing director and head of strategy for Mando-Connect

Loyalty Advertising

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Mando (part of @WPP) utilise data grounded with reasoning, combined with unique insight to develop ground-breaking reward solutions around the globe.

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