But today the proliferation of media channels means brands have more options for making their loyalty schemes available to consumers in the places that are most convenient for them.
At loyalty brand Nectar, marketing director James Frost says: “We have seen the user base of our Nectar mobile app grow by 70 per cent in the past year, 40 per cent of the statements we send out are electronic and we believe loyalty is going to be critical to companies that want to win the mobile wallet war.”
He says the brand’s aim is to create an experience for the customer whereby “they can live out the Nectar journey end to end on a mobile device”. The main features involved in achieving this include paperless coupons and location-based targeting.
In the case of the former, a coupon is sent via the Nectar mobile app and the customer is prompted to accept it; having done so they will automatically have it applied to the purchase the next time they use their Nectar membership when shopping. Nectar’s location-based communications, meanwhile, work by reminding consumers of live offers in nearby stores that are Nectar partners.
In both cases the customer benefits from being freed from the constraints of a physical voucher, while Nectar benefits from being able to use personalised ‘push’ marketing that, in theory at least, is seen as helpful by the recipient.
Similarly, Game’s new director of insight and loyalty Fred Prego recently told Marketing Week (MW 13 June) that the video game retailer’s app is now fundamental to its reward programme, for example offering a store locator function and the recently launched ‘accolades’ initiative. Accolades are awarded for carrying out actions such as trading in a game for the first time.
But that’s not all the app does. Prego adds: “Not only does it add tools for the customer, it also helps us gain an insight into each customer and how they are using the app, through which we are listening, monitoring and talking to them, and launching new functionalities they need and have been asking us for.”
Mobile devices are now crucial to loyalty, according to Mark Stevenson, managing director of mobile network O2’s Priority loyalty scheme. He calls them “the remote control to our customers’ lives, which allows us to have two-way conversations encouraging engagement and building loyalty with an ongoing interaction”.
As with Nectar, one of the O2 Priority scheme’s main selling points is location-specific offers, or Priority Moments, which the brand has developed with strategic agency Cherry London. They include exclusive deals on retail vouchers, cinema tickets and music gigs.
Stevenson explains: “We knew when we launched Priority Moments it was ‘go big or go home’ – O2 had to offer its customers something they couldn’t get anywhere else. At the heart of Priority Moments is location-based technology and valuable customer insights, as well as the sequencing of relevant experiences and rewards, which enable us to reach and excite over 23 million customers, wherever they may be.”
Mobile, then, is clearly the key way many brands’ loyalty programmes are evolving. But it is not the only one. The full list of channels that O2 Priority uses to communicate is long and varied, according to Stevenson. As well as mobile communication via the app, instant messaging and text messages, Priority also connects with consumers through email, 460 high street retail stores, contact centres with around 3,500 staff and brand experiences such as O2 ‘angels’, who give out free lunches from Upper Crust kiosks at train stations.
According to founder Chris Boyd, hotel booking site PointsHound negotiates both with loyalty programmes and companies selling hotel room inventory to offer deals; but it is the ability to earn more loyalty points than usual on their favoured scheme that is PointsHound’s main attraction.
Boyd explains: “The selling rate is going to be the same you see on any other online travel agent because we compete based on the points offer we’re passing through.”
If the site has negotiated a deep discount on a room price it will still mark this up to the general market rate and instead pass the discount on to consumers in the form of loyalty points.
The most crucial change in the evolution of loyalty marketing has barely begun to take effect, though. Again it relates to mobile, and more specifically the growth of mobile payment services. ‘Mobile wallets’ developed by banks and credit card providers, as well as internet players such as Google and PayPal, are shifting the point-of-sale from the checkout to the mobile screen while offering that space as a new point of engagement for brands and their loyalty schemes.
As Nectar’s Frost notes, “If you make a mobile wallet just an easier way to pay, that’s fine and some people will want it, but we believe bringing loyalty and offers into a mobile wallet will accelerate the journey. A slick experience would be: as you pay, loyalty points are awarded and offers for your next shop appear in your wallet.”
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