Marc Caltabiano, VP of marketing and products at Cartera Commerce, a marketing technology company that enables online shopping programs, discusses customer loyalty and how technology has helped revolutionize rewards programs.
Direct Marketing News: How has customer loyalty evolved in the past five years?
Marc Caltabiano (Cartera): Each household is a member of 18 loyalty programs. That’s up from 12 programs five years ago. From a consumer perspective, there’s much greater competition for attention and consumer loyalty. The sheer amount of programs and initiatives has increased. What that means is it’s easy for consumers to switch. Programs need to provide more value beyond the core value proposition. A lot of organizations need to find creative ways to provide loyalty. Electronics retailers provide access to concerts. Magazines create iPhone apps.
DMN: How has technology enabled these evolutions?
Caltabiano: It’s easier for brands to go beyond their core competency by working with partners. You now have companies that specialize in services to help companies test things out and bring them to market quickly. Brands used to have to build the technology on their own. Now it can go to market in three to six months with thousands of merchant relationships. Second, companies have the ability to leverage data and digital channels to get to rapid targeted scale.
DMN: How does a more empowered consumer change the idea of loyalty?
Caltabiano: The expectations consumers have with how they want to be interacted with has increased. A lot of programs provide consumers the ability to define the channel, how often interactions occur, their preferences, and how their data will be used. Consumers have more fine-grain control. A second change is that consumers interact and market to other consumers. They can be advocates and effectively reach large numbers through their own networks. They can be a much bigger part of the whole marketing interaction.
DMN: Many brands are now offering engagements and services in addition to cash back and rewards points. Is it necessary for companies to go beyond traditional rewards?
Caltabiano: A loyalty program is just one tactic of an overall loyalty marketing strategy. Points and cash back are a secondary point to communicate and provide engagement. Engagement can be done with a formal loyalty program but it can also be done through other means as well. Technology has enabled much more flexibility. Redemption is not just for airline tickets anymore but also for products and experiences.