The Loyal Treatment: How to Engage Loyalty Program Members

Four key tips to make members feel appreciated and engaged with their programs Check out the AMA’s “Loyalty Marketing—The battle for consumer attention and advocacy” event this Wednesday, Feb. 29 in Toronto. Click here for more info. To say loyalty programs are big in Canada is like saying Americans are “kind of” into football: it’s […]

Four key tips to make members feel appreciated and engaged with their programs

Check out the AMA’s “Loyalty Marketing—The battle for consumer attention and advocacy” event this Wednesday, Feb. 29 in Toronto. Click here for more info.

To say loyalty programs are big in Canada is like saying Americans are “kind of” into football: it’s an understatement. They have massive influence here: 92% of Canadians are a member of at least one loyalty program and, on average, are members of 6.4 of them.

While some people associate loyalty programs with the big players in the field, marketers with more meager budgets can also apply (and benefit from) the main tenets of loyalty. After all, doesn’t everyone want to make customers feel appreciated?

Doing so effectively in 2012 revolves around some key themes: social media, mobile, soft benefits and getting member input.

Those key concepts come up in “Maritz Insights: The Loyalty Report 2012.” The research was conducted by Maritz Canada, a consumer loyalty and engagement marketing company based in Mississauga, Ont., that researches and monitors the progression of attitudes around loyalty and rewards programs in Canada. For the second year in a row, Maritz conducted a study that included stats like the membership figures mentioned above, as well as lots of loyalty insights. It shared the findings (gathered via an online poll of 6,665 Canadians in December 2011 and January 2012) exclusively with Marketing.

Rob Daniel, vice-president, loyalty and research at Maritz Canada, says the results show the impact of loyalty programs has increased in several key areas from 2010 to 2011: consumers are now more likely to continue to do business with a company and modify when and where they shop and the brands they purchase because of reward programs.

Marketing analyzed the Maritz results about loyalty program perceptions and behaviours to find who is getting it right and how marketers can generate more loyalty from their customers.

Loyalty programs are currently lagging when it comes to creating social communities in which program members can share their comments and rankings, says Brenda Higuchi, vice-president, strategy and analytics at loyalty management company Aimia (formerly known as Carlson Marketing). She gives credit, though, to Scotiabank and Cineplex’s Scene loyalty program. Last year, it launched a platform called “Scenetourage” that uses social media to let members form like-minded groups of movie-loving members. Meant for both acquiring new members who are passionate about movies and engaging existing Scene members, “Scenetourage” is aimed at Canadians 18 – 34, says Katherine Dimopoulos, head of marketing and brand experience at Scene. Members create and name their own “Scenetourages”—the group of people they usually see movies with—at Scene’s website and take on other teams for status and points.

“Scenetourage” also includes a Facebook game called Scene Trivia Stars in which Scene members and non-members alike test their movie trivia skills. It’s an opportunity for members to win loyalty points and bragging rights, and for non-members to earn game points and learn more about the program, says Dimopoulos.

It also recently launched Facebook enrolment tabs for “Instead of [consumers] coming to us, we’re realizing we need to be where they are,” she says, adding that Scene has expanded its media and creative strategy for social media.

Best Buy Canada also used a Facebook game as part of a corporate campaign over the holidays called “Our Favourite Things.” The company identified more than a dozen of the hottest gifts of the year and then players could “pass” a present to a friend on Facebook and win one or all of the “Favourite Things.” Aliya Kara, Best Buy Canada’s director of marketing, says within three weeks, 30,000 people had downloaded the app and the company ended up giving away more than $40,000 in prizes.

To piggyback off the successful game and tie it to Best Buy’s loyalty program, Reward Zone, members were sent an e-mail that included a link under each of the “Favourite Things” products and encouraged them to visit Best Buy’s Facebook page with a call to action that said “Is this on your wish list?” Kara says more than 1,000 customers clicked from the link to the “Our Favourite Things” Facebook site and there was a high conversion rate into product sales. The click-throughs were 15% to 25% higher than average for this type of campaign.

Regardless of device, smartphone owners are interested in mobile loyalty: 51% of Canadians have never downloaded a retail app, but would be open to downloading a loyalty app. This could open the door for retailers to achieve mobile engagement.

Loyalty is about the different touchpoints brands can have with consumers to keep them acting, reacting and engaging with the brand, says Bob Macdonald, president and CEO of Maritz Canada. One increasingly important way to do that is through their smartphones. “The ability for instant redemption and to instantly engage with a loyalty program will only increase as phones become faster, bandwidth will become more prevalent and apps will become more slick,” says Macdonald.

BMO came out with its own slick mobile offering last year. The BMO Mobile PayPass Tag is free to BMO MasterCard customers. After attaching a thin sticker to their mobile phone they tap their device over the PayPass reader at point of sale. In most cases, consumers don’t have to give their PIN or signature for PayPass purchases less than $50. PayPass tag users also receive Air Miles reward miles or cash back when they make PayPass purchases, so they accumulate rewards quicker.

Members of Starbucks’ loyalty program, My Starbucks Rewards, can also make in-store mobile payments using their Starbucks Card, which is loaded on their phone. Beyond this mobile move, though, Matthew Guiste, director, global brand loyalty at Starbucks Coffee Company, says the company tries to elevate the experience with all its digital touchpoints. For example, there’s an app that allows users to check the level they’ve reached in the program using the “star”—My Starbuck Rewards’ currency. “When you make a purchase and go to that tab on the mobile app, you see a star actually fall into a cup and that tracks your progress over time,” says Guiste. “At every point we’re trying to have a sense of fun and energy and interest with the program.”

Mobile has become such an important part of the Scene program that its longstanding primary call to action during the in-theatre digital pre-show no longer directs viewers to for more information but to the mobile site, instead. This year, Scene will be introducing far more promotions than in the past to encourage SMS opt-ins, says Dimopoulos. For example, it recently launched a viral PIN promotion to boost awareness around the opportunity to subscribe in SMS.

When Best Buy Canada noticed that 30% of its Reward Zone members were opening the e-mails they received from the program on a mobile device, Kara says it reacted by optimizing all of its e-mails for different types of mobile devices, including BlackBerrys and iPhones, and has improved its layout in recent months.

It’s the million-dollar question: how can marketers put more meaningful value into their loyalty program without simply outspending the competition? Maritz’s answer is to go soft. The study found there are a lot of soft benefits that wouldn’t necessarily do well on their own, but can make a huge impact when they’re tied to a solid value proposition in terms of hard benefits. While the notion of hard benefits is based on a “spend, gain points then redeem” rewards cycle, soft benefits are things like contests, access to a members-only in-store sale section or status as a priority customer.

While it’s great to give members relevant, instant value, it’s also important to balance that with an emotional factor. My Starbucks Rewards, for example, launched across Canada last fall and features three levels of loyalty: welcome level, green level and gold level. To qualify for the gold level, a member has to visit 30 times in a year. The reward is a free drink after every 15 purchases and a personalized gold card. “It’s an interesting benefit because on the one hand it doesn’t seem [like achieving gold status] would be really important,” says Guiste, “but as we watched the reaction and the over-the-top nature of tweets like ‘This is the proudest moment of my life,’ you see this outpouring of emotion.”

Since so many customers already think of “my Starbucks” and “my drink” and “my store,” the gold card, says Guiste, “gives the company the chance to say back to them ‘Yes, we also recognize you, you are my customer.’” Reciprocity drives a lot of that connection with the brand and adds an emotional component to the program that Guiste says is “far above and beyond the discounts.”

Best Buy Canada’s Reward Zone program applies the same thinking. While the program’s value proposition used to solely focus on points, Kara says it was recently expanded to “points, perks, exclusives.”

“We’re not Shoppers Drug Mart where people are coming in once a week to buy things to get points,” says Kara. “If some of our members are only coming in maybe once a year to buy a laptop or TV, what’s the value of the program for them if they’re only collecting points in a sporadic way?” Cue members-only soft benefits such as Cirque du Soleil tickets, free movie rentals from Best Buy kiosks in convenience stores and private after-hours shopping events full of deals.

Roughly 21,000 members attended private Best Buy shopping events in December, and 10,000 of them made purchases. Afterwards, the company sent a customer survey to those who attended. The response rate was 55%. “We never see that,” says Kara. It proves that members really value the program and are engaged enough that they’re eager to share what they do and don’t like about it.

Loyalty is about engagement, and letting members give input on a program is a great way to connect with them. It’s important to provide an opportunity to help shape and share the experiences members are having with a brand, says Daniel. Ideas forums, such as the one Starbucks has created, are a great way to gather input and suggestions, he says.

The website is a place for customers to share ideas about the coffee chain, as well as comment on other people’s suggestions. Many of the features of the My Starbucks Rewards program are from the site, says Guiste. That free beverage you get on your birthday when you sign up as a member of the program, for example? You can thank customer suggestions on for that freebie.

Maritz’s Macdonald agrees it’s very important that loyalty programs provide a greater platform for such creation. “People should participate in the brand and program,” he says. While he says technology used to be thought of as “dehumanizing,” it’s now actually “rehumanizing” by allowing people to connect across geographic and economic barriers that used to exist. “Those barriers are now broken down… it’s an opportunity for brands to create loyalty for people from all walks of life to connect around what’s important to them.”

Take the annual usage and attitude study Scene does with its members. Many of the new additions to the experience have come directly from member feedback from the latest results. Throughout the year, the program also regularly sends out surveys to its Scene panel to gather information on the program. For instance, to better understand what has engaged members in Quebec—where Scene has put a stronger focus over the past year and a half—Scene is going to question its panel: Was it the partnership with comedian Rachid Badouri that drove awareness of the program within Quebec or the Wednesday movie discounts for Scene members?

“Loyalty programs are so much more than just discount and coupon programs and they need to connect with people in a much more meaningful way,” says Daniel. While many already do a good job of it, “there’s still a lot of room to grow.”

For the full story, check out the March 12, 2012 issue of Marketing, out now.

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