How Do You Build Loyalty?

ISSUE #62 – A question inevitably on the minds of many brands… In this interview, Johann Suchon, Managing Director, China, Southeast Asia Incentive and Rewards & Global Rewards of Edenred, explains how businesses can approach loyalty and relationship management.

 

Is there a difference between a loyalty and a rewards programme?

When thinking about relationship programmes, the key question to tackle, on the part of a brand, first of all, concerns the type of behaviour it seeks to drive from the beneficiaries of its programme.

Among the different “below-the-line” tools available to marketers, the first step of differentiation is by target, i.e. “Is the brand seeking a relationship programme focusing on consumers (CRM), on professionals (PRM) or on employees (ERM)?”

Once this is fixed, we can then define the objectives of this programme, i.e. “Are we seeking to acquire members? To limit attrition? To industrialise opportunities for cross or up-selling? To set up a network of business partners? To educate the market and / or beneficiaries?” The possibilities and combinations are endless, even more so in a zone like Asia-Pacific, where CRM and loyalty concepts are in their build-up phase.

Then, based on these objectives and criteria, we work out the means and tactics, e.g. instant rewards, points-based programmes, value-based programmes vs recognition, emotional or tangible propositions, all while keeping in mind the core values of the brand or product.

We may indeed sometimes end up with loyalty programmes based 100% on emotional recognition or on the extreme opposite end, programmes in which the main value is a direct monetary equivalent. Most loyalty programmes though, whether B2C or B2B, tend to offer a balance between tangible rewards and emotional values. The efficacy of a loyalty programme lies in the correct “cocktail” of those benefits – Do you aim to trigger a “Long Island Ice Tea” effect, an immediate burst reaction, or a soothing “Piña Colada” effect that lasts longer? Both? It is possible, and it is increasingly evident to many that social media usage can tremendously impact the ways of managing this mix of benefits and awards.

We may indeed sometimes end up with loyalty programmes based 100% on emotional recognition or on the extreme opposite end, programmes in which the main value is a direct monetary equivalent.

This issue focuses on data. Could you share with us some examples of “new data” that brands should be leveraging to better engage beneficiaries, consumers in particular perhaps?

Initially, many clients were launching consumer loyalty programmes to acquire highly valued personal data (or corporate data in the case of B2B CRM). These days, getting access to data is no longer an issue, with the boom in online interactions, social media data sharing (limited nonetheless by local PII data regulations), overall digitalisation of communication and payments, etc. All these activities generate much more data than marketers – even the best-equipped ones – can really apprehend, not to mention leverage. At the same time, the expectations of consumers, whether millennials or not, have evolved: non-targeted campaigns or communication have seen their efficacy drop dramatically! And this is not only because it is easier to monitor results now that much has gone digital, but also because consumers’ sensitivity to personalised offers is now a must to consider.

Thus, the role of loyalty programmes has evolved from a “trick” to capture information to a major channel to pulse targeted and personalised campaigns, which is actually a pretty good news for everybody: marketers can match campaign offer / branding / targets and control their equities, finance teams can monitor campaign budgets and ROI and finally, consumers can benefit from relevant offers.

To take a recent example: Amazon Go is a very exciting innovation in retail, and certainly from a CRM / loyalty perspective! At first glance, it actually looks like the exact opposite of what relationship programmes aim at, because how can one go about building a relationship when there is no longer any human contact between them and consumers?

Amazon Go completely changes the ecosystem on which most store retail CRM programmes are based on, and it actually generates data that is similar to online CRM programmes. One of the most meaningful and powerful pieces of data for marketers is what’s being “abandoned” or “altered” by shoppers in their baskets through the course of shopping, and this data (until now) has been available only in the online retail world.

In an Amazon Go system, we will able to capture the same data with one additional element – physicals! The consumer can actually touch, weigh and feel a product before putting it into his basket, no longer just simply clicking on a picture or video! I am very excited about the insights we will be able to get from this new data for retail and I am certain that its impact will go far beyond the CRM / loyalty teams. Merchandisers, for example, are likely to become your Loyalty Manager’s new BFF!

Our role as a loyalty service provider has evolved, from suppliers of tools for loyalty programmes to partners for our clients.

In your experience, what are some challenges brands face in integrating and applying data and how does Edenred support their operations?

Integrating data is not so much a critical issue for most clients these days: the generalisation of API and overall digitalisation of the brand-consumer relationship has assisted tremendously processes in acquisition and integration of data. SSO (Single Sign On) and ubiquity of mobile devices have also helped a lot, by singling out consumers (whether or not it leads to a dystopian future is another story…). Broadly speaking, the overall quality of databases have significantly improved, which is a great news considering the exponential growth of accessible data.

Our role as a Loyalty Service provider has also evolved, from suppliers of tools for loyalty programmes (CRM, Loyalty Engines, Campaign Management, Communication Channels and Vouchers / Offers Management), now to partners for our clients, not only providing CRM and marketing teams with recommendations on their strategies but also operating directly personalised campaigns based on findings and insights from our own Data Analytics teams, which usually complement those of our clients.

Again, I see this evolution as a very positive change: as a loyalty agency, our growth is more tightly linked to our clients’ success, which is directly related to the relevancy of their offers to consumers. Cliché as it is, a Win, Win, Win situation!

 

 

 

 

Edenred Singapore provides advanced expertise in Marketing Services, across Asia-Pacific, with an innovative and integrated offer, from the design and program management solutions to distribution of rewards, to assist companies in their relationship marketing strategies. For 50 years, Edenred has been adapting its offer to a changing society by listening to, understanding and meeting its customers’ needs.

 

Interview with Johann Suchon, Managing Director, China, Southeast Asia Incentive and Rewards & Global Rewards of Edenred

 

Article published in the FOCUS Magazine “Driven by Data” – Issue #1 2017

 

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