You would think in today's economy that having premium status as a frequent flyer is enough, yet I manage to feel inadequate as the growing number of million milers continue to get the prime seats, leaving me in the back. All of us, regardless of our status, have experienced the dreaded middle seat on a Monday at one time. Yet, Delta Airlines is feeling our pain and is responding with something as simple as a triggered email -- an email that understands no one likes the middle seat, especially a middle seat on a Monday, and includes a heart-felt apology as well as a few points for my trouble.
Recently, I had the opportunity to talk to the folks over at Loyalty Lab: Matt Howland, CEO and David Rosen, SVP Strategy and Channel Development, about how loyalty programs have evolved from rational "give to get" to marketing that connects with the emotional needs of their members. Historically, rewards focused on spending "x" getting "y" in return. Today's loyalty programs understand the importance of emotional rewards and build their benefits and communications around it. With today's programs people are looking to be rewarded with stuff that makes them feel good: praise, badging, moving up in status, recognition by company leaders, and overall making them feel like they are special people. Or in the case of the middle seat on a Monday, simply expressing how they feel our pain.
So, what else are they observing in the space?
Higher Engagement in Loyalty Communications
Take a loyalty program email and compare it to a standard weekly communication and you are going to find higher opens and click-throughs. Why? Because the opt-in process is conscious and memorable -- not your standard checkbox at the end of a purchase. People make a conscious decision to join a loyalty program and (in many cases) share more information about themselves. It is important to note with more sharing of information, comes a higher expectation to receive relevant communications. If you don't meet this expectation, it's considered just another email.
More Opportunities to Engage with Consumers
The economies behind email are certainly there and it remains the workhorse of all the channels. Yet, your audience expects your brand to be where they need you: on social platforms such as Facebook or Twitter or in the store or on their mobile phone. Every brand's audience is different. Know your audience. Know where they are, be there, and ensure the channels are integrated.
Loyalty Programs Used as Currency
Loyalty programs are an ongoing exchange between retailer and member. The "give to get" exchange generates sales and provides the currency needed to learn more about the consumer in order to build and grow a relationship. Without this currency, there is little to no incentive to share, and so little insight -- very much a challenge for CPG, pharma, primarily cash businesses, and others. With a thoughtfully executed loyalty program consumers have an incentive to reveal themselves.
Words of Affirmation
Who knew Gary Chapman's "Five Love Languages" could be a great business book? Yet, if you look at how he describes those who express love through Gift Giving and others through Words of Affirmation, you realize this is what David and Matt are talking about when they describe the evolution of loyalty programs. Rewards are fundamental (gifts) and now companies are realizing through the dawn of social that recognition (affirmation) is also a great way to create relationships with consumers. People want to be known as individuals and receive praise for activities. A perfect example of a loyalty program based on recognition (and, yes, points) is Virgin America. They have fully embraced the social tools, leveraged their key influencers in their advertising and WOM programs, and frequently engage directly.
New life has been breathed into the loyalty program. As always with a program we have permission to talk to our customers and know them. Technology allows us to capture their situation in real time and respond accordingly. It is now a tool we can use as marketers to increase the effectiveness of all our channels through relevant communications... and yes, to keep our customers around for a long time.
