/tag/loyalty+programs/

Tagged “loyalty programs”

Customer Loyalty, Economic Wars And Social Selling: Is There A Correlation?

Quite recently, in the era of chasing consumers, the marketing term "bargain purchase" became synonymous to "we will pay for your participation", but now the situation is rapidly changing. The retail market has entered the era of turbulence and inflation.

Against the backdrop of uncertainty and rapidly changing situation with pricing and demand, retail chains are increasingly canceling discounts and suspending their customer loyalty programs.

At the same time, social selling is gaining popularity very quickly, taking buyers away from the frictional offline retail.

A serious information tsunami caused by restrictions for international IT-giants in their ability of getting a cake and its topper cherry of the social sales in Russia is the vivid example of huge interest in the topic of both sellers and buyers.

Analysts compete in forecasts, but it is already clear that what had been happening recently will never happen again.

Broken economic ties between countries and regions, forcibly interrupted supply chains shall aim at giving a new impetus to the development of a decentralized ecosystem of online trade and social commerce, along with the Internet systems supporting them.

Let's avoid finding the beneficiaries since they will soon declare themselves.

Today it seems to be very important to understand what is happening and adapt to new conditions as soon as possible.

Can the concept of loyalty programs with its corporate tools like loyalty points, miles and other business-centric incentives keep its positive trend? Time will show, but for now, many businesses are forced to get survived first.




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How do loyalty programs [un]work?

Loyalty Games

Discount and loyalty programs were invented more than one century ago. Once upon a time, customers were given metal tokens and stamps issued by a different shop. In those distant times, people lived settled and traveled, at best, on horseback. They were going, by modern standards, not on a trip, but rather on a walk.

Since then, a lot has happened. But the want to stimulate sales, and ideally, to tie the buyer to the retailer, has remained. And, oddly enough, the methods in their essence have not changed significantly. Every store or retail chain strives to achieve pure customer loyalty. So they spend extraordinary amounts of money on developing CRM and loyalty programs, making changes to IT systems and cash desks, issuing plastic cards, mobile applications, and distributing them among customers, forgetting that such systems work great just in case no one else is doing it and become a real disaster for customers as soon as every retailer starts doing roughly the same... or almost every retailer because not everyone has enough resources to implement complex and expensive IT systems.

The sophisticated reader will probably notice that the era of plastic cards is already in the past. And today, everyone has a mobile to store numerous loyalty card numbers, and many retailers have already abandoned cards altogether and switched to mobile numbers and applications.

Yes, this is true. The point «issuing plastic cards and distributing them among buyers» is rapidly disappearing from the long list of necessary, and the user experience is becoming much more successful.
But in the era of mobile applications, illiquid points remain illiquid, no one canceled the arbitrariness of retail, and the accumulated bonus points continue to be revoked or depreciated at the command of «the boss of the whole loyalty» of the retail chain or airline.

The «loyalty» turned out to be bizarre. It seemed that retail built the system in the buyer's interests, who would stay with the store, chain, or airline in gratitude for the special treatment. But the result is we wanted the best, yet it turned out as always. Once feeling a donkey carrot, the buyer turned away from the offered gingerbread of points and miles while gravitating towards promotions with the money-up rule.

The idea behind the Liquid Bonus™

The idea of the “Liquid Bonus” as the unified token into which you can transfer your points, miles, and other rewards provided by retail chains, stores, and airlines, has appeared instantly. But it took a long time to find a solution that would not become another partnership or coalition of several sellers. You can come up with a new elegant solution that will bring success and money but will not change the essence. This time, my goal was not common for a business innovator.

For the Liquid Bonus™ to become attractive to buyers and retail chains, it must be truly global, i.e., it shall work not only with the majority of sellers but also be widely accepted in different countries. This tool should not interfere with the process already established by retailers or loyalty coalitions for their loyal customers. And it should not share any customer data accumulated in the loyalty program of an individual retail chain or loyalty program. At the same time, I thought, LiqBon™ must ensure trustful relationships between the participants in the system, even if initially they have no trust in each other at all and even some are direct competitors. By joining such a system, retailers and manufacturers would be able to expand the capabilities of their CRM systems while eliminating the worst drawback of existing loyalty programs - the periodic expropriation of accumulated loyalty points and miles.

But it turned to be that the major retail market players are not ready for "loyalty reward roaming" service today. Well, this is old news for me. Many years ago, when the author worked for the emerging mobile telecommunications industry, telecom operators did not want "to share their subscribers and profits with competitors" either. But later on, the network and international roaming appeared, which in some places began to generate even better revenues than intranet telco services. So I am strongly sure there is more to come!

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