What lies beyond today's loyalty marketing programmes?

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Loyalty marketing is big business. What comes next?

Loyalty marketing is having a moment in the spotlight as 2019 draws enters its final quarter. While there is a lot of uncertainty at the moment, what is crystal clear is that loyalty marketing is high on every brand’s agenda.

Loyalty programmes are making headlines in the consumer and trade press, the big conferences are heavily promoting loyalty keynotes, and there is a huge amount of buzz around two areas primarily: The biggest players are making huge changes, and the newer loyalty entrants are ripping up the rule book, creating new and exciting member experiences.

The biggest loyalty programmes are changing dramatically

Three of the biggest programmes in the UK are making enormous changes. The first to make a big shift was Shell – from Shell Driver’s Club to Shell Go+ in March this year. We first wrote about this in August, and it was very interesting to see Pavel Los, global loyalty programmes manager for Shell speaking at this year’s Loyalty Surgery about the demise of points: “I believe we have to forget points. People don’t care about points, they care about value exchange.”

Shell made its move because they wanted to create a member experience that was easy, rewarding and that made the customer feel appreciated.

Nectar with its 18.5m members made the next big announcement, following up its trial in the Isle of Wight and Wales with a national rollout that hit the consumer press and trade press alike from The Mirror to MoneySavingExpert. The big news? The 1 point per £1 stays, but now you can pre-select weekly personalised offers to boost your points balance. It's a move towards personalisation and a more rewarding programme from one of the biggest players around.

And then, Tesco also announced a move – the launch of Tesco Clubcard Plus for £7.99 per month. This big news here? Well, after 23 years and with 19m members, it isn't sharing too many details yet in the consumer press, but Dave Lewis said in a presentation recently that there will be big discounts off big shops, special benefits with money off a broad range of Tesco brands from mobile to money, and more personalised rewards and offers too.

He shared more about the new programme, the app experience and the brand's genuine desire to do better: “You can’t talk your way out of something you behaved your way into.”

One of the other huge loyalty players is Boots Advantage Card (22 years old, 17m members). Helen Normoyle, marketing director for Boots UK and ROI recently talked about the importance of simplicity to its programme: “For 22 years we have offered 4 points per pound. Keeping it simple like that is really important – just because we can do something different doesn’t mean we should.” She also talked about the importance of “the real emotional connection of the treat you get for free from your points”. Boots aren’t changing the Advantage Card any time soon (phew).

But even this programme is evolving to meet new customer needs - from simple changes like extending the age of children in families covered by their Parenting Club from 3 to 5, to bigger shifts like the launch of their Beauty X community. That was a big change for the brand – what Boots’ younger audience wanted was “great content brought to them by interesting influencers”. This isn’t a programme that’s standing still.

The newer programmes are innovating and creating exceptional member experiences

We also recently heard from Cathryn Lodwidge, loyalty marketing lead of British Gas Rewards. Cathryn talked about the impact of the programme they rolled out in 2017 on both the brand and on its customers. “British Gas Rewards was designed to say thank you to our loyal customers; we need to be relevant and offer them rewards and experiences they really want and appreciated. One of our most popular rewards is our free energy Loyalty Days – these are all about recognising our customers”.

British Gas has developed the world’s first use of AR in a loyalty programme this year too, creating an exceptional game at Easter where members could unlock an awesome AR experience and play to win thousands and brilliant prizes.

Sky VIP is another programme to watch. Rob Chandler, head of loyalty at Sky, has talked about Sky’s unique approach to driving customer loyalty: “73% of people believe that loyalty programmes should be about brands being loyal to them, but 66% of marketers believe the opposite. Sky flips loyalty on its head by demonstrating our loyalty to our customers, rather than demanding their loyalty to us”.

Loyalty is big news… so what’s next?

The debate on what comes next for loyalty is raging loudly. New technology is critical to the ability of the industry to continue to innovate, to personalise and to further improve the value proposition to customers and members. IBM has identified 6 technologies it thinks will be key to loyalty’s next phase:

  1. Artificial Intelligence
  2. Cloud
  3. Blockchain
  4. Mobile
  5. APIs & Microservices
  6. Internet of Things

While we think technology will be the enabler, we firmly believe it will be creativity that drives loyalty into the next phase.

Smart uses of data like our Partnership Engine to unlock what people really want, when and how they want it will be critical to getting loyalty propositions and member experiences right. We are looking forward to seeing what happens next in this sector. 2020 is going to be a big year.

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