George Wilson, Head of Product, EMEA, Global Merchant Loyalty at SessionM, a Mastercard company, helped judge this year’s International Loyalty Awards submissions. Here’s what he learned.
How do you judge loyalty? You can look at simple facts like numbers of subscribers and return customers and money spent with a brand. But everything in loyalty really comes down to data-driven innovation. There are loads of loyalty programs out there and many consumers are trying to juggle loyalty cards, points, rewards, special prizes – you name it.
The pandemic changed the consumer-brand relationship in many ways. Loyalty is now harder to capture as consumers were able to discover new brands in new channels. The real value and success of one loyalty strategy over another is really about the most innovative ways to connect with today’s consumer. Whether in a pandemic or not, brands win over consumers by delivering value in a simple, easy-to-understand way that taps into a consumer’s needs, aspirations and passions.
Loyalty innovation was all over this year’s International Loyalty Awards. I had the pleasure of judging the submissions and noticed a big emphasis on gamification, sustainability and charitable causes. Here are a few of my takeaways.
Gamification
Brands have been using gamification to develop more engaging experiences for consumers for the last decade. But it’s not until now that it seems to be gaining traction based on the number of ILA submissions that included a gamification use case. Brands are setting up programs that allow consumers to, for example, watch a video or sign up for a newsletter to win something. Leader boards let them track their progress and engage in a little healthy competition with other brand followers.
So, what has changed in gamification where consumers are now actually responding? For some, it’s better analytics and more robust strategies. With deeper insights and analytics on spending habits, brands are better able to develop gamification rewards and prizes that will resonate with their audiences of all ages. Gamification also allows brands to take a multi-channel approach that continues to drive in-store behavior too.
International grocery chain, Lidl, launched a gardening game in Belgium for all ages that combines digital and physical elements of gardening and provides valuable insights for Lidl.
Piraeus Bank also tapped into their customers’ holiday spirit by having them decorate a Christmas tree for prizes on the bank’s app. The aim was to engage customers with the bank’s app and get them acquainted with its features.
Sustainability
Sustainability is top of mind for many consumers and more brands are weaving it into their loyalty programs.
Research shows that passions are quickly moving from trend to expectation and sustainability is a passion for many. For example, 71% of people who are interested in sustainability say their interest has grown since before the pandemic, based on Mastercard Global Insights: Mastering the Art of Experiences 2020 & 2021. In addition, 62% of consumers around the world say it’s now more than important than before the pandemic that companies behave in a more sustainable and eco-friendly way, according to a Mastercard study across 24 countries. Almost half of consumers say a single bad experience stops them from shopping with brand, according to a TruRating survey.
These three trends show that brands need to bring together passions with loyalty in a simple way. Mastercard, for example, works with banks to allow their customers to redeem points for trees to be planted. In addition, the Mastercard Carbon Calculator provides consumers insights and data about the carbon impact of their spending.
Many brands are growing loyalty through their sustainability efforts through families and younger consumers. The Super Foodies 3 by Boost Group and Esselunga is an eco-sustainable short-term loyalty program focusing on healthy eating habits. The program allowed the brand to position itself as a “green” retailer, educating families on nutrition and healthy eating habits through fun and play.
Brands are also rewarding consumers for their sustainability. Eneco, a renewable energy provider in the Netherlands, created Enecoins, an eco-loyalty program that rewards customers for making environmentally friendly choices. Members exchange their Enecoins for rewards from companies that have committed to sustainable practices.
Loyalty programs tied to sustainability help the brand connect to consumers in a common objective beyond a purchase. When the common objective is strong for the consumer, they’re more willing to spend their money with the brand that’s actually helping them achieve their goals.
Charitable causes
Many consumers want to give back to their communities or to specific causes, and they often want easy ways to do it. Many brands are tapping into this desire by letting consumers donate their points in meaningful and relevant ways.
A great example of tying loyalty points to charitable causes among the submissions was SHARE, the lifestyle rewards program by Majid Al Futtaim, which owns shopping malls, hotels and mixed-use communities in the United Arab Emirates. Customers could donate their SHARE points in the app to support non-profit organizations and the company donated food every time a customer purchased a meal using SHARE. The company made it easy and seamless for a customer to give back, which went toward building more loyalty among its customers.
British Airways also set up a program to allow its customers to donate their Avios points to health care workers in the UK. Enough Avios were raised to allow 5,000 health care workers to take flights for holidays or to see family.
With growing consumer interest in providing charitable support to communities, this is an important opportunity for brands to help consumers answer the call through their loyalty programs.
What’s next?
There are several evolving loyalty trends to watch in the coming year from engagement opportunities to digital acceleration and personalization.
There are more options than ever for how brands engage with consumers and those will continue to expand. It’s not just digital channels but also buy online, pick up in store or curbside. Payment options have expanded to buy now, pay later. And there’s now the ability to order real-world goods in the metaverse. It comes down to meeting the consumer where they are versus where you tell them to be.
Digital is here to stay. In 2020, consumers spent $900 billion more at online retailers as Covid kept consumers at home, according to the Mastercard Economics Institute. At least 20-30% of the digital shift in retail will stay put, reshaping how and what consumers buy. With the shift to digital, there was growth in e-commerce subscriptions, such as wine clubs, weekly grocery delivery and clothing. Nearly 88% of countries across 32 markets saw a surge in subscription services in 2021 compared to the previous year, according to the Mastercard Economics Institute. Expect digital innovation to continue to evolve.
The increasing focus on personalization has proven that trends quickly become expectations. Brands need to continue thinking beyond personalization and look at what the next trend will be.
As brands look to next year’s International Loyalty Awards, they should be thinking about how their programs are demonstrating behavior change and how that change is benefiting the consumer and the business.
Brands also need to think about how they’re continuing to innovate to solve real-world problems. Try to stand out because there are a lot of loyalty programs out there that are still doing the same old stuff. Finding new ways to engage customers is key. It’s no longer about points, it’s about how you drive emotional connection and loyalty through ways that are less transactional and tap into passions.