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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.

 

3 Trends That Rewrote the Rules of Loyalty Marketing In 2017 (Part 2)

(This is the second in a three part series on shifts that occurred in 2017 that will have long term impact on the loyalty industry. Part 1: Liquid Currency covered the adoption of pay-with-points solutions.)

Shift #2: Loyalty Program Fraud Comes Out of the Shadow

Every sizable loyalty program was a victim of attempted fraud or hacking in 2017. Those who believe they weren’t, simply haven’t paid attention.

The fact that loyalty programs are at significant risk for hacking shouldn’t be a shock. Customer data breaches are predicted to cost business some $8 trillion over the next five years. In the ecommerce space specifically, fraud already exhausts 8% of the average merchant’s revenue stream, while fraud management accounts for 21% of operational costs.

Fraud and hacking are a daily reality in an increasingly connected consumer world. The loyalty industry, which manages vast amounts of consumer data and tens of billions of dollars in point value, is not immune. And innovations like point pooling, gifting and liquid currency, while bringing new choices for consumers, have also added new access points for fraud.

The overall loyalty industry’s risk of exposure on this topic is significant, as I explained in an interview with Kiplinger earlier this year:

“Loyalty managers have kept a low profile with regard to breaches that have occurred, but it’s just a matter of time until there’s a well-publicized breach of a large program—most likely in airline or hotel rewards because members accrue significant value in those programs.”

Thankfully, a major high-profile breach has yet to occur. But loyalty program fraud still became an unavoidable topic in 2017.

The Weak Link

This year, the loyalty space began to address the topic of fraud. Until very recently, program fraud was only discussed in hushed tones or dismissed as a non-issue. Now all major loyalty agencies proudly promote their fraud protection tools and process. Increased awareness has also inspired the launch of several new industry events dedicated solely to addressing fraud detection and prevention. The topic is also a frequent subject of mainstream media coverage.

Companies with programs now recognize that hackers and organized criminal networks have identified loyalty currencies as potentially easy targets for one simply reason: low consumer awareness. Unlike their bank and credit card accounts, few consumers closely monitor their earned point balances or update account passwords on a frequent basis.

However, consumer awareness may be shifting. According to new consumer research from a 2017 Maritz study:

  • 56% of consumers now indicate they are concerned about loyalty program fraud
  • While only 7% of consumers identify themselves as having been a victim of program fraud, of those who have experienced fraud, 58% say the event made them less trusting of the brand overall, and 45% said they are less likely to purchase from that brand in the future. *A previous version of this blog said that 17% of consumers reported fraud within a points-based loyalty program. The correct figure is 7%. 

What does this change mean for loyalty marketing?

As consumer awareness of loyalty point fraud rises, the risk to brands will be three-fold:

  • Breaches of member accounts pose a major PR risk, both to your program and to your brand, since more attention is likely to be paid when a breach does occur.
  • Breaches pose a financial risk as brands are responsible for reimbursing lost points or fraudulent redemptions.
  • Most importantly, a defrauded loyalty program member may become a lost program member.

But, there is an upside.  While the potential consequences are serious and could be costly, the sunlight now shining on the possibility of program fraud should reduce the risk of fraud occurring. Heightened awareness by brands should bring increased attention to fraud/hacking prevention best practices, with increased expectations that loyalty partners provide advance fraud detection tools. Similarly, consumers who realize their points could be attractive to criminals will likely monitor their accounts more closely and recognize the real dollar value of those points. Increased vigilance by both groups will be major win for loyalty marketing in 2018.

 

3 Ways to Make Your Loyalty Program More Social for the Holidays

Most consumers join loyalty programs with self-serving motives.  This makes perfect sense considering that the explicit promise of most programs can be distilled down to “do this, get that.” But, that doesn’t mean that consumers don’t appreciate brands who give them the flexibility to use their points and miles to give to others.

Member Engagement Through Gifting

New consumer research data from Maritz shows that using points to reward others is a significant part of the modern loyalty program experience:

  • 54% of consumers have gifted a loyalty program reward during the holidays
  • 35% use program points to gift throughout the year
  • 8% exclusively use points for gifts for for friends and family

Charitable giving also appeals to consumers. The same Maritz research found 40% of buyers would be at least moderately more likely to participate in a loyalty program that offered charitable giving opportunities, and 14% said it would greatly influence their participation. (See the infographic at the bottom of this post for more information)

Most Programs Miss the Opportunity to Get Social

Unfortunately, most loyalty programs continue to focus solely on “mercenary” offers—those that appeal to a consumer’s sense of self (i.e., “what do I get out of it?”). While this can be effective, the key to lasting customer relationships are “multi-loyalty” programs that go beyond simply earning and redeeming rewards.

Here’s why — there are four primary drivers that motivate people, according to a neuroscience-based model developed by the Harvard Business School. One of those is the Drive to Bond, combining the desire to connect socially with others and a tendency to recall social experiences more easily and more positively. So, appealing to a consumer’s need to experience social connection (ie, “What can I do for somebody else?”) can set your loyalty program apart and boost redemption rates.

3 Strategies For the Holidays

The holidays present a particularly advantageous opportunity. This is the time of year when people are most inclined to give, so why not encourage consumers to focus that generous spirit on their loyalty rewards, too?

1. Gifting

Allow program participants to redeem their points to buy gifts for family and friends. The goal is to make it easy to do holiday shopping and ship gifts directly to recipients. As an example, Choice Hotels allows members of its Choice Privileges program to redeem points for gift cards, to take the hassle (and money crunch) out of Christmas and Hanukkah shopping.

2. Shared Reward

Enable program participants to join forces to earn one shared reward (for example, children banding together to give their parents a dream vacation). British Airways excels in this area, allowing as many as seven members in the same household to pool miles. One person can redeem them and draw proportionally from each member’s account. Members can also redeem awards for up to five others not living in the same household.

3. Charity

Give members a chance to convert points or miles into a donation to charity. This allows the consumer to feel good about making the world a better place by making an impact at a local, national, or global level. Jet Blue’s True Giving program allows customers to donate TrueBlue points to more than 2.5 million causes in its database.

Offering gifting and giving options allows brands to communicate to consumers that they care about what matters to them. It helps users fulfill their drive to connect with community. And that’s a great way to stand out from the pack.

How Consumers Are Gifting