The Age Of The Spoilt Customer

The findings of the 2018 Loyalty Programme Member Engagement Survey by Eighty20 should make all those in the loyalty industry take note.

Member engagement is key, the authors find, but what does that mean and what other emerging trends are coming through?

What is clear from Eighty20’s 2018 Loyalty Programme Member Engagement Survey, is that it is no longer business as usual in the rewards and loyalty arena.

The underlying message, says Eighty20, is that loyalty schemes have to move beyond existing models of discounts and points if they are going to remain relevant.

It’s up to programme owners to work out how to “optmise engagement, adjust propositions and improve performance.

No more buzzwords

“Today’s South African customers are smarter, more empowered and have more options to vote with their hard-earned income than ever before,” say the authors. They go on to add, “Yes, we are indeed spoilt, fickle and hard to please, and we expect only the very best from the brands that serve us.”

Their conclusion is that member engagement is key. But what does this mean?

It means that the owner of the rewards and loyalty programme should have the capacity to facilitate “communications and touch points between the brand and the loyalty member after the member has joined the programme”, says Amanda Cromhout, the founder and CEO of Truth, which is  a Cape Town-based agency that provides customer-centric consultancy services.

Cromhout agrees that “member engagement is absolutely critical for the success of the programme” and refers to a white paper her firm published, which found that in the last three years “customers are becoming pickier and choose which programmes add the most value to them and their shopping behaviour”.

For Steve Burnstone, CEO at Eighty20, the concept of member engagement refers to the reaction customers have “every time they interact with the brand and its products or the loyalty programme”. If this interaction is to be engaging, Burnstone believes that it should grow the customer’s goodwill towards the brand and in the process increase the long-term value of the customer to the business.

The survey report itself explains that customer engagement denotes a situation where the customer is no longer satisfied by a loyalty programme which sees its sole job as just the ability to enhance the customer experience with the brand, but one that  “also understands the full world in which we exist”.

This implies that a rewards and loyalty programme can no longer get away with just looking at members in terms of numbers, but must understand that customers are individuals who have relationships with a number of brands across sectors. Hence, there is a need to put in place resources to help the owner of the reward and loyalty programme to get to know each customer and make them feel as if they were the only one registered for the rewards programme.

The new normal

What has led the South African consumer to demand more from loyalty programmes? According to the survey report, consumers in South Africa have been “spoilt by world-class propositions (initially in retail banking and health insurance) developed and enhanced over the last 20 years”. The report adds that customers now expect this “new normal” from every brand that chooses to launch and operate a loyalty proposition.

For Cromhout, another reason behind changing customer demands has to do with the reality that “there is a great difference between loyalty programmes and customer loyalty”. Customers are no longer just excited by receiving points, they want to feel that “your brand promises are offered in a way that shows customers that you truly value them across every aspect of your brand, not just your
loyalty programme”.

Interesting insights

Even though customer engagement seems to be the overriding theme, a number of other trends emerge from the report. For instance, the authors assert that in order to be successful, loyalty programmes should clearly state what methods they will use to track and measure member engagement. They also note that it is important for the owners of a loyalty programme to invest in understanding how members “perceive the value offered” compared to the effort required for them to earn rewards from that programme.

There are two unexpected insights offered by the survey. The first is that simplicity does not always lead to success, as some sectors of the market need more complicated designs in order to flourish. The second is that even though one would expect members to be concerned about their privacy, this does not yet seem to the case in South Africa. “But we expect this to change in the near future and programme owners need to be prepared for this,” the report’s authors conclude.

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