While classic loyalty models still have a place, the most successful programmes now are relevant more often, are embedded in clients’ digital lives and offer personalised rewards.
These were the key findings at the Traveltech Lab and Collinson debate at the London & Partners offices, which focused on loyalty in an age of diminishing brand affinity.
Panellists included Tamara Lohan, founder and chief technology officer, Mr & Mrs Smith; Adrian Maseda, co-founder, Cheerfy; Flemming Viktor Andersen, founder of Pointvoucher; and Peter Gerstle, group head of travel products at Collinson.
TTG group editor Pippa Jacks moderated the panel and began by defining loyalty. “Loyalty doesn’t just mean encouraging customers to buy from you again,” she said. “Rather to spend more with you, feel positively about you and recommend you to others.”
Lohan, who co-founded her boutique hotel specialist business in 2003, said that loyalty in the travel sector had “changed beyond recognition”.
“Brands must deliver because customers can switch or change their habits,” she said. “They must inspire loyalty from the very first touchpoint to the end of the customer’s journey.”
Gerstle agreed, stating that loyalty programmes such as the British Airways American Express Avios incentive, although successful, were not as relevant for millennials.
“Frequent-flyer programmes are built for long-term use. It takes a while to garner points. More successful programmes will give customers more options than just a discount on a flight. Short-term gratification, on the other hand, is a trend associated with the younger generation.”
Andersen explained that “game-ified” loyalty platforms such as Pointvoucher, where users play to earn real-world rewards, appeal to both an older and younger demographic because they offer them “entertainment” and “quality” prizes.
Pointvoucher’s latest project, Play London with Mr Bean, sees users complete challenges to earn vouchers that can be exchanged for products and experiences from brands and attractions including Radisson Blu, Europcar, SEE Arena and London Zoo.
“Only 8% of our half a million players are under the age of 18. We’ve also found that women between 27 and 50 make up more than 50% of our gamers. This is interesting because they are the decision-makers in the family.
“A third of the UK population is playing games on their smartphone. They don’t feel like they’re wasting their time because it’s entertaining. We’ve seen customers with a playtime of two months.”
For Maseda, loyalty is about the experience, to “delight customers with quality service and to surprise them”.
Cheerfy drives loyalty through personalised in-store experiences by using Wi-Fi, creating “360° customer profiles” that enable businesses to send customers personalised messages or surprise gifts to their smartphones.
“For example, if a pub is showing a football match it can send a customer a voucher for a complimentary beer if their team scores,” enthused Maseda.
Cheerfy also sends customers messages to remind them to rate their experience, offering compensation if it’s negative.
“The experience should be frictionless too,” said Maseda. “Businesses don’t need an app. Using SMS, email and WhatsApp is just as effective. Smaller concerns can piggyback on 100,000s of apps.”
Looking to the future, the panel said that more loyalty partnerships between businesses would emerge.
“I think we will see more instances where companies say ‘let clients earn with me and then burn with you’,” explained Lohan. “What will make your loyalty programme successful though, is if customers can use their points to get what they want elsewhere. At Mr & Mrs Smith, we never give points to redeem, we offer currency.”
Gerstle agreed: “We believe in this argument because it is relevant to the customers’ needs. That is true engagement.”