There are growing voices suggesting that the days of customer loyalty are long behind us now. The blame has been put on the different mindset of millennials who are pushing for different experiences than generations before them. But, just as consumers are changing, so are loyalty programmes as they evolve to the changing customer demographic.
It is clear there has been a seismic shift in interest in loyalty programmes over the past decade, but suggestions of its death are rather premature. Demise, perhaps? But even then, it still plays a vital role for retailers.
There has clearly been a major evolution in consumer expectations and just as Newton’s third law of motion states, “For every action, there is an equal and opposite reaction”, businesses now need to change and build engaging experiences and customer-centric offers.
It has been a long time since the basic concept of collecting points and delivering rewards to retain existing customers. It is now more associated with a customer’s whole journey, their experience and, in some cases, dependent on being part of a community.
As it was the marketing industry that was among those that have pushed the idea that loyalty was dead, a report from last year produced by the Data & Marketing Association (DMA) makes interesting reading and highlights the complex nature of loyalty.
According to the DMA’s ‘How to win trust and loyalty’ report, only once the so-called ‘functional drivers’ for loyalty have been delivered can brands start to consider using emotion-led drivers to solidify the relationship with their customer. These functional elements refer to customer perception of interfaces being easy to use; the company and services being reliable; quality being kept high, and creating convenient and personalised experiences.
In the past week we have seen brands are continuing to look to expand their loyalty efforts and offer further member benefits. One example is the exclusive partnership between British Airways and Barclays that will launch later this year and see Barclays Premier customers able to earn Avios through day-to-day use of their current accounts.
The firm details of the partnership remain unclear, but it will include “additional loyalty benefits and experiences”. The minimum threshold for the Barclays Premier account are a GBP75,000 annual salary or more than GBP100,000 in savings or investments with the bank, so that highlights a more corporate clientele.
Elsewhere, British Airways Executive Club members can currently secure additional Avios and move closer to unlocking travel rewards by earning up to double Avios with a short-time double Avios accumulation offer when shopping at selected retailers including H&M and John Lewis on Avios eStore. With up to 14 Avios (Harvey Nicholls) now available per GBP1 spend members are able to boost their balance and transform their everyday spending into an array of travel rewards such as flight redemptions, upgrades, hotels, car hire and other experiences.
This is not new – but, it does highlight the increasing role experiences are playing in the loyalty model. This is on both sides from collection to spending of loyalty bonuses. Another example in this programme is being able to earn double Avios at both Twickenham Stadium and the England Rugby store due to British Airways being the Official Airline Partner to England Rugby and ‘Principal Partner’ to Twickenham Stadium.
Similarly, in the hotel industry, Accor has signed a new partnership with visa to launch the ALL Visa card for its loyalty programme members. ALL, or Accor Live Limitless to give it its full title, was launched this time last year as a “disruptive and dramatic shift” of its loyalty programme. All will “recognise, understand, cherish, communicate with and reward guests like never before” and “bring value to everyday life whether you work, live or play,” explained the hotel group at the time.
ALL’s evolution has supported the “passion points” for guests, says Accor as it attempts to use experiences to get the strongest return on the programme. Following extensive studies, it says the three main passion points resonate with its loyalty members: Entertainment, Dining and Culinary & Sports.
This new co-branded ALL Visa card will support point accumulation and enable members the ability to earn loyalty points on purchases at retailers where Visa is accepted. It also offer members more loyalty points when staying at any Accor property as well as tailored rewards based on customer preferences.
Accor says the ALL Visa card will enable it “to engage customers beyond their stay, via an industry leading loyalty program, offering ALL members the ability to earn points, enjoy new experiences and even more hotel nights”.
Accor is spending EUR225 million to support its new loyalty initiatives with the financial objective of creating EUR75 million per year of gross operating surplus in the medium term. A clear sign that the industry still believes that loyalty is alive and well.