The internet has brought in a loyalty program copy-cat era.
Many loyalty programs today offer similar rewards or such a variety of rewards that the program becomes unmemorable alongside competitor programs.
Why has this occurred?
Naturally, upon the design phases of a loyalty program, brands will first review competitor programs and ensure their offering includes similar rewards as a baseline. However, not all programs consider those incremental rewards that will differentiate the program.
Three questions a loyalty consultant will ponder are:
- What must this program offer at a bare minimum?
- How can this program differentiate from the competition?
- What weighting does delivery have on engagement?
Another contributor to the “beige”, undifferentiated rewards suites typical in so many loyalty programs is that larger organisations often employ third-party operators to source and fulfil reward redemptions for their loyalty programs. In several cases, however, the same operator is often working directly with industry competition.
These operators will source products (or vouchers, or travel offers), committing projected redemption volumes to the supplier to secure the best price and then promote the product throughout the multiple programs they operate.
This is particularly prevalent in airline and banking loyalty programs.
Some of these operators are Collinson, Giift, Ascenda, Mastercard Loyalty, TLC Marketing and Kognitiv (formerly Aimia).
Whether a brand has outsourced operations for their loyalty program or is equipped to manage the program internally, it has become increasingly difficult to maintain a unique and differentiated suite of rewards, particularly in highly competitive industries.
Brands need to adequately manage operators
It must be recognised that many operators today are proficient at reward sourcing and program management, however to ensure your loyalty program remains memorable and differentiated, brands must:
- adequately manage operators to ensure there is always a selection of unique or program-exclusive products available
- demand transparency about which other programs also have the same products live
- ensure that delivery service levels are well defined contractually and always kept above the competitive average
- ensure the provision of personalised and relevant interactions with the customer as the pinnacle of the customer experience
- have some stand-out, newsworthy rewards on offer. For a list of some unique items on offer in programs today read here
- be quick-to-market with highly coveted rewards (think iPhones, Dyson products and other technology that people are inclined to queue for or sign up to a waitlist)
- Partner with brand-aligned suppliers for exclusive events and product lines
- Encourage and reward advocacy through reviews, social media advocacy and the ability to share a link to rewards with friends
Regardless of the weighting of operations sitting with brand vs operator, there must be cohesion, a shared commitment, and dedicated partnership between the brand offering the loyalty program and the operator to ensure seamless execution, member-centricity and quality of engagement is upheld.
Wanting to design a non-beige, world-class loyalty program? Contact us today.
