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How to Use Gift Cards to Give an Experience This Holiday Season

It was my birthday recently (why thank you kindly for the well wishes!) and the night before official festivities were to take place my wife received a text from my sister asking for gift advice. Without looking up from her phone, she turned to me and asked for ideas to relay back. I rattled off a few of my favorite beers and ended with the caveat: “and if they don’t have those in stock you know I enjoy a good browse through the aisles.” What I didn’t put together until the next day when I opened my present to reveal a sleek little gift card (thanks sis!) was that what I had actually asked for was an experience.

With the overwhelming focus on millennials over the past few years, the term “experiences” has gotten a lot of play within the marketing and loyalty space. Numerous studies show that this key demographic holds an affinity for experiences, and often articles – like these from Forbes and Business.com – position this as a clash between the preference of material goods vs experiences, but that is not the full story. When reports quote that younger consumers “prefer” or “would rather spend money on” experiences it is misleading as this often paints the picture that these generations are primarily focused on accumulating cultural wealth instead of monetary wealth, flocking towards wildly unique happenings in an act of rebellion against consumerism.

This is false.

This type of presentation fails to acknowledge that you don’t need to mark your calendar and buy tickets to an event in order to have an “experience”.

Life is a constant experience.

And the goods we interact with in our daily lives have the potential to elevate each and every moment.  And that is what younger generations care about – creating memorable moments.

Yes, sometimes that means checking an item off the bucket list. Other times it could be hosting a backyard bonfire where laughs are shared a bit too loud and a bit too late into the night. Or simply capturing an image and sharing it with friends and family who will appreciate its contents. All are experiences.

And as I have been reminded recently by the gift card from my sister, merely the hunt for material goods can be a very enjoyable experience in of itself. A big reason for this is because when we purchase things, we imagine ourselves enjoying them in the most ideal of situations. It’s a similar phenomena as to why playing the lottery is actually worth it, even if you don’t win. We garner enjoyment from the thought of the experiences we will have in the future, allowing us to take greater pleasure in the now. So

So with the gift giving season nearly upon us, how do you ensure that the gift cards that you are giving will result in an experience not once, but twice for the end recipient? To take a deeper dive into the concept of having an experience, while prepping for an experience (where are Leo and Joseph Gordon-Levitt when you need them?) I want you to imagine yourself in 2 scenarios:

Scenario 1:

You open a birthday card with a decently funny punchline courtesy of Hallmark with a generically uplifting sentiment scribbled below from the sender, along with a $50 Target gift card.

Useful no doubt, but not very exciting or memorable. A likely scenario is that you slide the gift card into your wallet and forget about it until you are at the checkout aisle a month or two later (and let’s be honest, this isn’t even the first time you have been to Target since you received it – just the first time you actually remembered you had a gift card). It covers about half of your purchase and moves out of mind as soon as you pull out a credit card to cover the balance. There is no specific item that the gift card bought, it was essentially a great coupon. Furthermore – by the time it’s used you might not even remember who gave it to you (guilty).

Scenario 2:

You open a birthday card with a decently funny punchline courtesy of Hallmark, a $50 Target gift card, but this time a specifically tailored message from the gifter stating that they want you to use these funds to ‘revamp your board game collection’ for the next game night. Suddenly you aren’t just given a $50 catch-all, you are given a passport to adventure. (I realize not everyone will consider picking out a couple new board games as a “passport to adventure” but I do, so if you disagree simply replace the scenario with something you are passionate about.)

The key difference is that in Scenario 2 the presenter framed their gift in a particular manner, which in the case of a gift card causes 3 things to happen:

1. Clarity of focus. The focus has been shifted from the monetary value of the gift to the potential items that will be purchased which allows for a vision of the ideal state where those goods will be used. (i.e. the specific framing has created anticipation – one of the keys to a great experience).

2. Permission to spend irrationally. ‘Irrational’ might be a stretch but certainly the gifter has empowered the giftee to make a non-utilitarian decision. Let that sit. The delivery of the gift, not the gift itself, is what is impacts the end user’s ability to justify their spending behavior.

Scenarios 1 & 2 impart the same financial benefit, but because the second narrative includes commentary from the gifter stating: “I am giving a green light, nay a directive, to spend this on an activity of pleasure” there is an instant switch in the mental accounting of the recipient, stating that they can (and should) treat this pile of money differently than their usual expense budget. This is a vital piece of the puzzle.

3. Evoking a deeper emotional response. Gift cards are notorious for doing the opposite. But adding the personal touch of how the recipient could use the card improves the overall memory halo of the gift. No more forgetting who made your shopping adventure possible.

The bottom line? It is all about how the gift card is framed in the mind of the end user.

Prime the mind to pay attention to the experience that the gift card allows.

So this holiday season when you are checking names off the list, don’t feel bad by settling on a gift card. Quite the contrary! Know that based on how you present them, you have the potential to be giving millennials the thing they value most – an experience – regardless of the brand on the card.

 

Seven Tips To Tap Your Customers’ Engagement Potential This Holiday Season

With the holiday season upon us, Americans will once again be participating in one of their favorite past-times – racking up points from credit card rewards programs. A recent study revealed what some may consider a surprising statistic– consumers are more eager to earn points then spend them. According to a 2017 Maritz market study, 73% of loyalty program members identify themselves as “point savers” rather than “point spenders.”

In addition, 50% of this “saver” population (or just under 37% of the overall population) save without an end goal in mind. This specific behavior presents a unique challenge for teams managing loyalty programs, especially in the credit card world where the potential to earn is so high, since the monetary value of points must be accounted for at the time they are earned, not spent. The end result is a lopsided accounting ledger for those card providers whose saver population decides to hoard points.

And while the term “liability” is widely accepted in the loyalty program world, its connotation is extremely negative. Instead of thinking about members’ unredeemed points as the evil two-ton gorilla that sits on their balance sheet, program owners should see liability as something to embrace, not just something to manage. Unredeemed points are an opportunity and represent the engagement potential of their program to develop a deeper loyalty between their consumers and their brand.  

How can credit card companies maximize their “engagement potential” this holiday season?

If credit card companies aren’t already segmenting by behavior, this is a good place to start. Companies should complete an assessment to split cardholders into three simple groups: actively engaged, unengaged with potential, and unengaged with high likelihood of being lost. Consumers who fall into each of these categories are in very different places in their customer journey and companies should interact with them in different ways. Quick notes on each:

  • Actively Engaged:  This group offers you the best opportunity to personalize their experience. Look to utilize existing data resources like recent spend behavior and redemption history to entice members with meaningful and relevant redemption options.
  • Unengaged with potential: Gone are the days of the generic “It’s been a while” and “We miss you” emails.  Re-engagement is a difficult task, but something that a smart approach can effectively achieve. Businesses who are committed to the long-term success of their re-engagement campaigns should constantly run A/B tests with this segment so they can refine their approach, tracking the specific hooks that are able to move members back up into the active segment and learning how far gone is too far to recover.
  • Unengaged and likely lost: Let them go. There are some members whose point balance liabilities are just that, a liability. A healthy breakage rate is modeled into most points-based programs, and executing a campaign that prompts the use of points from a segment whose business has been lost will adversely impact that balance.

Now that we know who card companies should be targeting this holiday season, let’s take a look at some best practices for how to entice customers into redeeming their unused points.

1. Engage them early. The holiday points redemption spike starts in October. If companies are waiting until Thanksgiving to hit their holiday stride, they will have missed out on the majority of their redemption window.

2. Encourage members to explore. Humans are creatures of habit, but the holidays are a magical time. A Maritz study showed that the rewards members want most (in order) are cash back, gift cards, and merchandise. But during the holiday months there is an uptick in the percentage of redemption that takes place for gift cards and merchandise.  While any engagement is positive, card providers will experience a win-win when they maximize redemption in the holiday window when the trend is in favor of these categories which usually have a lower cpp (cost per point). Using aspirational imagery and copy that encourages members to explore these redemption options will be effective since members are already primed for consumption during this time of year.  Additionally, this is a great opportunity to set the “default” redemption behavior to these categories for members who have never redeemed before.

3. Talk to them the way an online retailer would. Businesses talk to consumers differently around the holidays; so should rewards programs. This approach includes everything from implementing limited time discounts to grab attention and create urgency, to appealing to consumers’ value of time by juxtaposing the ease of online shopping against the madness of brick and mortar holiday retail. The end-goal is to drive conversions, something that online businesses are getting down to a science, so there is no reason to reinvent the wheel.

4. Tie into one of the season’s oldest traditions – lists. The goal here is to narrow the focus and avoid choice overload. When consumers face too many options the most likely outcome is for them to fall back on their default behavior or do nothing (in the case of savers, these options happen to be one and the same). Card companies can help simplify the decision process by showcasing select redemption options in list form. Create Top 10 giftable lists from popular but generic categories like gift cards or electronics. Encourage members to “check people off their list using points” in a manner that feels productive and efficient, tying into the universal motto of the holiday shopping season, “one less thing.”

5. Highlight charity options. Numerous studies on pro-social behavior show that people actually receive more joy when they are giving than when they receive. Charitable giving has the unique ability to create a deep emotional response which not only improves the mood of the giver, but also improves the relationship with the party who helped facilitate that interaction, i.e. the credit card brand.

Additionally, more opportunity exists to create community among the members themselves by making their donation visibly part of the whole via a progress bar showcasing the total donated. This strategy creates a bridge for an individual to connect with others who share their values and will reinforce their decision to be associated with the brand.

6. Give them the OK to spend on themselves. Everyone does it. Using points is a great guilt-free way to reward oneself during the holiday season, but sometimes consumers need to be given the green light to do so. Companies openly recognizing that it is the loyal behavior of their customer which earned the points in the first place, and therefore customers should make sure to treat themselves, will resonate with many program participants.

7. Create an end of the season campaign. Finally, card providers need to make sure that once the holiday spend and madness has concluded, they continue instilling repetitive redemption behavior by reminding members of the new balances they have earned from  holiday purchases. One approach to consider is highlighting the specific amount of points earned in the months of November and December to help tell the story.

The holiday season is truly the best opportunity of the year to engage customers and encourage the redemption of point balances. Companies need to find the right approach that aligns with their brand voice, and during the holiday season they shouldn’t be afraid to be a little whimsical. Consumers enjoy a bit of personality, it helps them connect to the brand on an emotional level which is a necessary component for any successful, long-term relationship – even if that relationship is with their credit card provider.

This article originally appeared on Paymentweek.com

What Does a Loyal Customer Really Look Like? (Podcast)

Have you ever wondered how banks and credit card companies can attract new customers and grow their purchasing relationship? To attract, engage, and retain those best customers, we have spent decades helping banks and financial institutions grow customer loyalty and create strong relationships with their customers. VP of Loyalty Strategy, Barry Kirk shares his experience and expertise on the Payments Journal podcast, hosted by Editor-in-chief, Ryan McEndarfer. The podcast covers different loyalty topics and how they specifically apply to the banking and credit card space.

Listen to the full podcast on Payments Journal or access the full transcript here. By listening, you will hear about: 

  • The correlation between brand loyalty and reward spending habits 
  • Insights about customers point saving and spending habits 
  • Which incentives customers actually prefer 
  • Tips for financial institutions and card companies that want to better connect with their loyalty program customers 
  • How companies can work to change customers from mercenary loyalty to cult loyalty 

To listen to the podcast on Payments Journal, click here. 

Inside the Mind of Decision Paralysis & Why Loyalty Marketers Should Care

I am a data driven consumer. I am a millennial with disposable income (though less and less with two kids). I am conscious about a company’s ethics and their social giving. But the most important thing you need to know about me as a consumer? I suffer from decision paralysis.

That is to say, I can’t make up my mind. And when I do? I still haven’t, not really – with my brain always playing a game of “what if” leading to increased regret and decreased satisfaction with my very own purchase decisions. And unfortunately for you, there are millions more like me, and a consumer with buyer’s remorse is not very likely to become a brand loyalist.

So how do you help us snap out of it?

The first step is to understand the two psychological barriers responsible for this inhibiting behavior: Loss Aversion and Choice Overload.

Ingrained Traits

Loss Aversion is ingrained into human’s DNA. It is the theory that people have a higher proclivity to avoid losses than they do to acquire equivalent gains. This behavior manifests because humans are hardwired to defend what is already ours and therefore a loss going out from “our pile” creates more negative satisfaction than an equal gain going into “our pile” creates positive satisfaction. (i.e. the sadness I feel when I lose $100 outweighs the joy I feel when I find $100.) Because the loss of something is more painful than the equivalent gain, we work harder to avoid it. In the context of purchasing, this desire to prevent loss manifests itself in a nagging voice saying:

“Is this really the cheapest website to purchase through?…will the price drop tomorrow?…I swore I saw this item less expensive somewhere else…”

Rationally, someone with decision paralysis could be 100% willing to pay the advertised price for the good they are considering buying, but the idea that they aren’t getting the absolute best deal possible (therefore leaving money on the table), stalls the conversion. In short – the brain has a bad case of FOMO.

And while Loss Aversion is ingrained into human’s DNA… it is Choice Overload that is ingrained into America’s DNA. Western culture puts an emphasis on individuality, and at the core of one’s ability to be unique and autonomous is the ability to choose. Ideally, from an infinite number of variables that don’t constrict self-expression. The problem is that humans weren’t designed to intake and compare endless data – in fact, the average human cognitive ability cannot efficiently compare more than five options with any level of great detail. Those suffering from choice overload find their heads swirling with the likes of:

“What utility am I passing up on by NOT purchasing choice B?…is this bonus feature worth the extra $25?…I can see myself using both options in different circumstances…”

Essentially, when faced with too many options, the consumer attempting to maximize their decision becomes overwhelmed to the point where fear of making the wrong decision prevents them from making any decision at all. If you are lucky enough that this concept is completely foreign to you, simply Google “Jam Study” for a famous example.

To jam or not to jam, that is the question.

Removing the Barrier

Now that you understand how our complicated brains are wired, I am here to tell you there is hope. How can a business conquer the hurdles of decision paralysis to engage new customers in a manner which sets them up for a successful long-term relationship? Start by incorporating an ingredient essential to any healthy relationship – trust. The #1 way to get a consumer’s foot in the door is by making them feel at ease with committing to the purchase. Over-stimulated folks crave a certain level of trust when entering a relationship otherwise, things will never work out between you.  (And it’s not them, it’s you – “advertising practitioner” is one of the least trusted jobs in America, scoring just above Member of Congress, but not quite as trustworthy as a lawyer…or auto mechanic…or well you get the idea).

So, help them overcome that negative stereotype by offering the following:

No Questions Asked Returns 

Odds are they won’t take you up on it, but simply knowing the option exists can ease their racing mind. This is especially important for e-commerce retailers where the consumer will not have been able to physically examine a good prior to purchasing, as well as for first-time consumers who do not have experience with a previous product to establish the brand standard. Flexible returns showcase confidence in your value prop, and that confidence is passed on to the consumer.

Become a Psychic

No, not literally – but you should be able to predict what consumers are most likely to ask. Data from existing customers should certainly play a role in this equation, but another great and underutilized resource is UGC (user generated content). Spend some time researching on the internet to see what topics your audience are organically gravitating towards. Once discovered, make sure this information is easy to find – the last thing you want is a consumer leaving your website to do their own research only to stumble across a competitor’s offering. The longer someone with decision paralysis is hunched over a computer analyzing every possible option, the more likely they will be dissatisfied with their final decision – even if it does end up being your product they select. Preemptively answering questions creates the sensation of “this is exactly what I am looking for” and gives the green light to proceed with the purchase immediately.

Make a Good First Impression

Seems obvious – because it is obvious. But too many times a hyped-up sales pitch is followed by underwhelming results. What is promised must at least match what is delivered, otherwise the consumer will feel like they have lost out on some expected gain, and we know that losses are a very powerful thing. It’s important to remember the moment of success for your business is not when you receive a consumer’s credit card number. It is the moment they realize they find so much utility from their relationship with your brand that they will gladly provide it for you again (and again, and again).

The Big Takeaway

Simplify where you can. Imparting confidence upon potential consumers begins with taking the time to understand the root of their uncertainties. Rational consumers are nervous about making the wrong decision, especially in unfamiliar industries. The goal of loyalty is to create an emotional bond between the brand and consumer which will supersede the brain’s default desire to undergo a thorough rational analysis. The result? Your brand’s product is always the right decision in the mind of the consumer. No further discussion necessary.

PODCAST: How to Build Brand Loyalty Today and Tomorrow

Consumers are human beings first. This is important to keep in mind when you think about building customer loyalty.

On the surface, that can be easy to remember, but you’d be surprised how easy it is for people to forget that. So many businesses today are in this downward spiral of reducing customers to a statistic or entries in a database. As marketers, we often think of consumers in segments and there are good reasons for doing that, however – it’s critical to remember at the end of the day, you are dealing with human beings – and you have to understand what makes them tick in order to influence them. And that’s what marketing is all about.

The shift over the last year or two to the focus of AI over big data has been very helpful in solving the problem of dehumanizing consumers. Big data was sort of a useless term – it didn’t really tell us anything. Artificial intelligence is essentially a way to move beyond thinking of consumers in terms of numbers and humanize it into the experience.

Maritz Loyalty’s VP of Loyalty Strategy, Barry Kirk, was recently featured on the On Brand Podcast: How to Build Brand Loyalty Today and Tomorrow with host Nick Westergaard. In this episode, Barry expands on the recent shift to Artificial intelligence, as well as:

  • How loyalty is today
  • The modern forms of brand loyalty
  • The impact of neuroscience on marketing
  • Tips on how to focus your own customer loyalty program

Click here to listen to the full podcast!

Loyalty Program Design: Ignore Customers, Increase Returns

When speaking with brands on loyalty program strategy, it’s clear companies know they should be utilizing their data and personalizing the user experience, but there is often a barrier of hesitation to openly treat customers differently. This hesitancy is rooted in the fear of ostracizing a portion of their consumers who are deemed “less valuable”. Why can’t we simply strive to provide every customer the same high-end treatment that they deserve? Well, because they don’t deserve it.

Not all customers are created equal. A successful loyalty program design allows a brand to:

  1. Focus on Best Customers: New friends are great, but old friends are invaluable. Your brand’s best, loyal customers will celebrate triumphs and help carry the business through rough times. They are different from the impulse purchase crowd and should be revered with your attention.
  2. Make Customers Feel Important: Customers expect special treatment. Research conducted by Forrester indicates that 59% of US online adults who belong to a customer loyalty program say that getting special offers or treatment that isn’t available to other customers is important to them.
  1. Reward Good Behavior: When customers exhibit positive engagement behavior with your brand, recognize it. Furthermore, let them know they will be rewarded for being good. SWA’s “Companion Pass” and Sephora’s “Rouge” are examples of how implementing aspirational status tiers with meaningful rewards can drive fierce loyalty.
  2. Maximize Promotional Budget: Offering all customers the same discounts, rewards, and communications can get expensive – and boring. Segmenting customers within a loyalty program will allow you to track the types of products they buy, how often they redeem, and how well they respond to communications, allowing companies to track the progression of a consumer’s journey with their brand – ideally even leading to predictive analysis.

Of course, there are instances where treating every customer the same does work. Take Publix, for example. At the end of last year, Loyalty360 published a post about Publix & how their “treat every customer the same” mindset has helped them retain brand loyalty over many generations. The grocery-chain doesn’t necessarily have a traditional loyalty program, but they do have many loyal customers. Their belief is that every customer should be treated to the same superior customer service and they attribute their long-term brand loyalty to this consistent treatment of customers. So how has this strategy worked so well for Publix?

First, they emphasize their core principles – remaining true to providing competitive prices, quality products, and customer experience. This ties directly back to their slogan “Where Shopping is a Pleasure” – an easy to digest value prop which they ensure is carried out by their eager-to-help, positive associates.

Next, they deliver consistency while also adapting to the industry surrounding them.  Customers return week after week because their in-store experience is a positive, known commodity. For consumers with more evolving needs, Publix has several online ordering options, including the increasingly popular home delivery powered by Instacart.

While this informal loyalty approach has worked for Publix, this wouldn’t work for every company seeking to achieve brand loyalty. Publix has the distinct advantage of being a “ritual vendor” (The average US household made 1.5 trips to the grocery store per week in 2017) and usually consumers repeat at the same store due to proximity and familiarity – two inputs that make a habit hard to shift once engrained. Publix also has a long history of superior customer service, and unfortunately brands looking to retain and engage customers in the here and now can’t afford to wait 80 years to build up that kind of reputation.

Before dismissing the Publix case study as irrelevant to your company’s situation there are aspects of the Publix secret sauce which every brand should aim to replicate, namely creating a resonating value prop + delivering your core product well. Without these key foundation blocks, a brand will not succeed no matter how clever their loyalty program design is.

So how do you determine which strategy is right for you?

As you can see, no loyalty program is one-size fits all. Program design must be unique and tailored to the brand’s needs and more importantly, their customer’s wants and needs. And while Publix doesn’t operate on a formal loyalty program, their initiatives over the last 87 years have formed loyal customers who stay away from competitors.

 

Two Reasons HENRYs are the Most Important Subset of Millennials

Before we get into the reasons why HENRYs are the most important subset of millennials, you might be asking yourself what millennial HENRYs are and why you should care.

It’s safe to say most people are familiar with the millennial generation, as they have been a hot topic for the past 10 years. The intensity of interest in them is growing as their purchasing power increases, soon to surpass that of the Baby Boomers. Tons of articles are published every day about how to engage with millennials, or how to incorporate them into your marketing strategy. Many companies have identified a need to connect with the millennial generation. A handful have defined an actual strategy around targeting and engaging them (seen a Diet Coke ad lately?).

The intensity comes from a reasonable place — a desire to tap into a segment of the American population with both a high disposable income and a lifetime value to a brand that could span decades. But there’s a problem — targeting a loosely defined group of 80 million people doesn’t exactly classify as a marketing strategy. The truth is — from top to bottom — millennials are the most diverse generation of economic significance in the US today. So we need to stop treating them all the same.

Within the diverse mix of college co-eds and minivan driving parents the secret to effectively leveraging this generation of consumers can be found by targeting one specific group known as the HENRYs. If you want to develop a successful marketing strategy, or develop a strong loyalty strategy, millennials are not your target. Millennial HENRYs are your target.

HENRY stands for High Earner Not Rich Yet. A HENRY is defined as: a household under 55 years old with an annual income between $100K and $250K, but that has not amassed investable assets of $1M. And while demographics for the term HENRY technically span 3 generations, the Millennial HENRYs are where brands need to focus for two core reasons:

1. They have a significantly higher budget for discretionary spending than Gen X or Baby Boomer HENRYs.

2. Young HENRYs are the most likely to become the brand’s most valuable customers both in terms of money spent & influence given over their lifetimes

So, how do you engage with this segment of consumers? What are their spending habits like? Download our white paper: Millennials are Not Your Target to learn more and gain strategies for engaging with this group.

The State of Global Loyalty: A Conversation about Turkey (Series)

The State of Global Loyalty: A Conversation about Turkey

What does customer loyalty look like outside of the US? How are companies around the world addressing the evolving challenges of customer retention? And what can US loyalty marketers learn from their global counterparts?

Welcome to our Global Loyalty Series! Seeking to find those answers, I recently posed questions to loyalty experts in our Maritz Global Partner Network, challenging them to offer insights unique to their regions around the world.

global loyalty, e-rewards This week, I connect with Enis Karslioglu, CEO of Sanal Magaza in Istanbul.

1.What are some of the biggest challenges companies in your region are facing when it comes to retaining loyalty program members? What opportunities do you see for these brands/marketers?

In larger scale programs such as airline companies and the banking industry, redemption is always a major challenge. In order to retain and convince the customers to come back, the rewards offered play a very important role in the programs. We highly advise to our customers to design the program to deliver related, high perceived value rewards, within a reasonable time frame to their target audience and program participants.

2. What cultural changes are you seeing in Turkey that are effecting customer loyalty?

Loyalty concept awareness is a big hurdle in Turkey. Offering high value rewards and a large variety of rewards is extremely important and challenging. Heading 3 different segments is a major challenge for our sales and marketing team with very little events.

3. What does customer retention mean to you? What does the ideal, loyal customer look like?

The ideal loyal customer is the customer who comes back often and makes new, frequent purchases with the brand. They are the member who engages new members and creates word of mouth about the brand in the market.

4. What do you believe makes a loyalty program successful?

The two main components of a successful loyalty program are creating a strong relationship with the consumer and increasing sales through the loyalty program.

5. What advice do you have for loyalty marketers?

  • Create your own permission based CRM
  • Engage your customers
  • Mine and launch individualized campaigns
  • Increase your penetration and sales

6. Are you a member of any loyalty programs? If so, which do you believe is the best loyalty program?

Turkish Airlines Miles & Smiles program is one of my favorite loyalty programs I participate in. I really feel rewarded and excited each time I spend my miles on ticket redemption. I also enjoy shopping in the www.shopandmiles.com Rewards Portal.

7. What is your wish-list for an ideal loyalty program? What would this program look like for participants?

First, an ideal loyalty program should be laid out on the proper technology. Rewards should be designed to fit perfectly to the target audience and program members. KPI’s should be set properly and aimed to be fulfilled from within the program. The program should be impressive and engaging enough to evoke the target audience to become members instantly and retain them for a long time. We aim to make every loyalty program create long-term value for both our customers and their customers.

8. How concerned are you about loyalty program fraud? Do you have any tips on how to be mindful of loyalty fraud?

Fraud is a major topic that should be taken into consideration at the very beginning of developing the program. Every measure should be taken both operationally and technically while developing the software, all the way to project launch. Correction of fraud later might create a big cost and tarnish the company’s reputation.

About Enis 

Enis, originally an Electronics Engineer from Hacettepe University in Ankara, has a wide experience in Media, including his past management of CINE 5, the biggest Pay TV of Turkey.  He received an Executive MBA at Harvard and participated in the General Management Program at the Kellogg School of Management at Northwestern University.

Enis established BIGGPLUS GROUP in 1999 and is the CEO of the group, including SANAL MAĞAZA INC. He has been focused on customer loyalty programs, E- Commerce and E-Rewards as well as merchandise development, carrying the company up  to  the leading position in Loyalty sector in Turkey, serving thousands of corporate clients such as Nestle, Unilever, P&G, Philip Morris, Axa Insurance,  Bosch, Goodyear, Coca Cola, Loreal, Turkcell, Ford, Shell, BP, Castrol, and Turkish Airlines, etc.

About Our Global Partners

Maritz  partners with top loyalty practitioners worldwide as part of the Global Strategic Partner Network.  Carefully vetted, trained in Maritz’ solutions and in regular communication with our solution leaders, Strategic Partners bring geographic market-specific expertise to our global clients.

 

The State of Global Loyalty: A Conversation About South Africa (Series)

What does customer loyalty look like outside of the U.S.? How are companies around the world addressing the evolving challenges of customer retention? And what can U.S. loyalty marketers learn from their global counterparts? 

Welcome to our Global Loyalty Series! Seeking to find those answers, I recently posed questions to loyalty experts in our Maritz Global Partner Network, challenging them to offer insights  unique to their regions around the world. 

This week, I connect with Barry Coltham, Managing Director for Achievement Awards Group, with input from Richard Cramer, Director of Loyalty.

Over the past 26 years, Barry has been instrumental in building the company’s deep expertise in automotive, banking, healthcare, and retail verticals and leading major research-based initiatives. Barry has a Master’s degree in Business Leadership and is a Certified Human Performance Technologist through the International Society for Performance Improvement.

 

As the Director of Loyalty, Richard leads a team of passionate loyalty marketers and analytics experts to deliver sophisticated, creative loyalty solutions. He is a veteran advertising executive with deep understanding of big brands, consumer psychology and relationship marketing. Maritz has been a shareholder in Achievement Awards since 2000.

1. What are some of the biggest challenge companies in South Africa are facing when it comes to retaining loyalty program members? What opportunities do you see for these brands/marketers? 

The major challenge is ongoing member engagement once programs have launched. We now have over 130 loyalty programs in South Africa, many that offer the same type of rewards. The value propositions have been watered down due to the on-going cost of running the programs which has resulted in member disinterest. Research by Truth Loyalty in 2017 found a decrease in the number of programs that women participate in, from 6.1 programs down to 5.6, as well as a slight decrease in the number of programs men belong to. If brands want consumers to stay involved with their program and frequently engage with it, something needs to change. The opportunity in South Africa is to go beyond rewards and to engender emotional connection and customer experience.

2. What do you believe makes a loyalty program in South Africa successful? 

A great value proposition and simplicity, the ease of use of a program, and surprise and delight rewards that are personalized and make members feel special. Another important element is the integration of programs with partnerships that are relevant and add value to the members’ lives. We can see in South Africa that the top programs are the ones that are easy to use.

3. What cultural changes are you seeing in South Africa that are affecting customer loyalty? 

There is a big transition over to mobile, and more people using internet on mobile phones than laptops and more mobile phones than the overall population. There is a fragmented, costly media landscape that does not reach rural poorer communities – mobile phones are the only way to access these members.

4. What’s the biggest piece of advice you have for loyalty marketers? 

There should be an understanding that you will have to increase sales by 6% to pay for the loyalty program. Most programs in South Africa reduced their value propositions because they did not factor in the cost of running the program. Employ a Specialist Implementation Agency and SAAS platform with experience in running the programs. The loyalty program is an integral part of the company’s DNA.

5. What is the impact, if any, of government regulations on loyalty programs in South Africa? 

There are two major legal acts that impact loyalty programs in South Africa: The Consumer Protection Act (CPA) and the Protection of Personal Information Act (POPI).

First, the CPA states that loyalty credits or awards are a legal medium of exchange (like cash) when suppliers offer it as consideration for any goods or services offered.  Because the loyalty benefits are legal forms of exchange, the goods given in return will also be subject to the CPA. This means that consumers are fully protected against defective, unsafe and hazardous products in the same way as a consumer who purchased goods and services with cash or on credit. Under the CPA, suppliers have a duty to ensure that the goods offered to consumers in loyalty programmes are in stock. In most advertisements you will hear the “while stocks lasts”, “subject to availability” or “terms and conditions apply” at the end, which suppliers believe cover them if they are not able to satisfy the promises made. The other major legal act, The Protection of Personal Information, refers to how loyalty programs process a lot of personal information and the processing of this information must be done lawfully.

About Our Global Partners:

Maritz partners with top loyalty practitioners worldwide as part of the Global Strategic Partner Network.  Carefully vetted, trained in Maritz’ solutions and in regular communication with our solution leaders, Strategic Partners bring geographic market-specific expertise to our global clients. 

The State of Global Loyalty: A Conversation about Latin America (Series)

The State of Global Loyalty: A Conversation about Latin America

What does customer loyalty look like outside of the US? How are companies around the world addressing the evolving challenges of customer retention? And what can US loyalty marketers learn from their global counterparts?

Welcome to our Global Loyalty Series! Seeking to find those answers, I recently posed questions to loyalty experts in our Maritz Global Partner Network, challenging them to offer insights unique to their regions around the world.

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This week, I connect with Mario Giuffra, Managing Director at Promotick.

In his early 20s, Mario founded Promotick, the first loyalty and incentive company in Peru, with his twin brother.  They started managing successful programs for big companies in many different industries:  banking, airline, supermarket, telecommunications, etc.  It didn’t take long before Promotick had expanded throughout Latin America.  They currently operate more than a hundred programs in nine countries.

Mario, what are some of the key challenges and opportunities companies in Latin America are facing when it comes to retaining loyalty program members?

One of the biggest challenges that companies face nowadays regarding the retention of users is the amount of loyalty programs that members have access to. Airlines, supermarkets, credit card programs and even smaller niche programs are adopting bigger and more complex offers over time. In this scenario, mechanisms of differentiation need to be more creative and dynamic to keep programs on track. This can be done through the following strategies:

  • Increasing use of technology to get ahead of new apps.
  • Build a solid structure of data and customer information management to understand their needs better.
  • Look for strategic alliances that allows more added value towards customers. A company rarely specializes in all kind of rewards, which is why finding the right partners strengthens the offer of benefits.

How are Latinamerican government regulations influencing loyalty strategies?

In some Latinamerican countries, tax policies are requiring the companies to pay taxes on some rewards redeemed by customers. This makes the products much more expensive and deteriorates the relationship between accumulated points and dollars spent, which in the end lowers the perceived value of the rewards.

Also, there are contingencies in the work environment when giving rewards. Tax collectors make companies pay taxes if an employee receives a reward. As in the previous case exposed, the product gets more expensive and this strategy of motivation becomes non-viable.

What does customer retention mean to you? What does the ideal, loyal customer look like?

For me, loyalty represents the preference for a product, service, or company over time in a constant and sustained way. Understanding the preference as the first option when it comes to the purchase.

Loyalty is the result of giving a good service at a reasonable price. A loyalty program should be built, therefore, after the service has been given efficiently. We cannot pretend to implement a loyalty strategy if we are not capable of giving the product or service offered initially. For example, if we want to implement a loyalty program for a newspaper company, first we must make sure that the delivery of the newspaper is done well and on time every day. Otherwise, the loyalty program will not work.

The ideal customer is one that buys our products steadily and recommends them to others by their own initiative.

What’s the biggest piece of advice you have for loyalty marketers?

When implementing a program, I consider that the following factors will help maximize the chances of its success:

  • Understand the customer by using all the information provided. It is important to watch and listen periodically.
  • Maintain high levels of communication throughout the duration of the program.
  • Utilize different platforms for operation.
  • Offer effective customer support.
  • Provide ease of use and understanding – clear rules, easy interaction and simplicity.

Finally, what is your wish-list for an ideal loyalty program for Latin American consumers? What would this program look like for participants?

The ideal loyalty program is one that can understand consumer needs and get ahead of them timely. This shows that it understands consumer behavior and  preferences. With this initial strategy, the program would always surprise participants with things that are inside their world of expectations.

Another initiative that I would like to see in a loyalty program is the capacity to provide future credit based on my consumption behavior history. For example, if I lack 5% worth of points to obtain a benefit today and my purchase behavior maintains the same for a long time, I would like the program to allow me to use that 5% I need against my future purchases.

About Our Global Partners

Maritz partners with top loyalty practitioners worldwide as part of the Global Strategic Partner Network.  Carefully vetted, trained in Maritz’ solutions and in regular communication with our solution leaders, Strategic Partners bring geographic market-specific expertise to our global clients.