Innovations in loyalty

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Innovations in loyalty
Innovations in loyalty
Card members can also redeem FlexPoints to cover the cost of their annual fees. “We know that annual fees can lead to attrition, so we wanted to create a value for customers,” says Daly. “Also if you spend a certain amount of money on your card within a year, you are exempt the annual fee.”

Marketers also find that charitable promotions motivate some customers, making cause marketing another potentially important trend to watch in loyalty programs. This fall, US Bank introduced an option to earn flex points at an accelerated rate by making charitable contributions. “We are trying to engage our card members to earn points more quickly, and we are also trying to encourage giving, especially in today's hard times,” adds Daly.

Mobilized loyalty

Customer loyalty programs can range from quite simple – a hole-punched local coffee shop card – to the very sophisticated – real-time individualized offers based on an integrated customer purchase database – but today, many marketers want to figure out the mobile component. Mobile allows marketers to be in front of their customers at all times, literally in their hand or back pocket.

In October, retailer Shop ‘n Save, an independent grocery retailer located in in Illinois and Missouri, introduced a mobile couponing program for its loyalty members. The retailer worked with technology supplier You Technology to add a mobile club as part of the chain's “Perks” loyalty program. The mobile club lets shoppers respond to in-store ads for different offers by texting to a shortcode. The coupon is automatically added to the customer's loyalty card, so when the customer checks out with their groceries using the loyalty card, they automatically receive the discount at the register. 

“Mobile is a natural extension for loyalty programs, since consumers are using mobile phones a lot these days,” notes Ken Fenyo, president and CEO of You Technology. “Shop ‘n Save has the data to understand what loyalty members buy, but now they can see how customers respond to these mobile deals and use this to inform other channels. The win on the loyalty side is that all of these communication channels will become integrated digitally.”

Social media marketing also provides marketers a new way to reach their current and prospective customers in real time. In 2008, Marriott launched the Marriott Rewards Insiders, a social networking site where members can network with other members. “We had heard from members that they like to hear from the brand but they also wanted to be able to talk more with other members,” says Goldstein. “They use it to share recommendations, like what is the best Chinese restaurant near the Marriott's Moscone Center location [in San Francisco] and so forth.”

The site also allows members to search for destinations or book a hotel room.

US Bank also embraced social media in a contest it hosted this summer. Members were encouraged to take a photo on an award trip and share it on the US Bank website along with a brief story about their trip. Members receive 500 points just for entering and two winners are chosen every month – one from online voters, one from US Bank's internal team. These winners get an additional 20,000 miles.

Special promotions, exclusive perks, unique experiences and bonuses for tiered members are becoming the norm as loyalty marketers look to compete in a competitive marketplace. “Loyalty is fancy word for greed,” says Harteveldt. “In other words, I'll be loyal to you if you do something for me. And today, loyalty marketers have to offer a lot more than just points for a reward to retain customers.”

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