Writing in the current issue of Admap, Amy Brown, head of planning at iris Amsterdam, argues that an old-school approach of ‘buy nine coffees, get the tenth free’ is superseded by the value exchange enabled by digital.
“Amazon Prime is the new kind of loyalty program precisely because their loyalty strategy isn't about driving loyalty – it's about creating an experience,” she says.
“Prime has successfully evolved by consistently providing a great experience within the ecosystem, getting consumers to buy more varied things, more often.”
Brown identifies three key drivers in creating experiences, each of which comes with inherent risks and implications: relevance, utility and purpose.
Data can help relevance increase ‘decision simplicity’ in a world of expanding choice. And a 20% increase in relevance has been shown to lead to a 96% increase in customer loyalty and an 86% increase in purchase conversion.
But people still like to be able to choose, she adds, so marketers need to avoid over-personalisation to the point where consumers are faced with a yes/no response and don’t consider the wider brand promise.
Digital enhances utility by creating brand experiences that aren't only interesting, but actually solve problems and eliminate pain points. Starbucks’ Mobile Order & Pay, a feature means users can pre-order, skip lines and pick up drinks without uttering a word to anyone in-store – and it now accounts for 9% of transactions.
Stripping out touchpoints and barriers, however, also reduces opportunities to communicate and Brown advises marketers to “always think [in terms] of journeys”.
Finally, purpose is becoming essential to success. “As people are buying into lifestyles more and more, you have to make it explicitly clear not just what your brand offers, but why,” she says.
Uber, for example, excels in in relevance and utility but falls short on purpose, as previously loyal users shy away because of the company’s treatment of low-paid staff.
Brands that can consistently provide relevant, useful and purposeful experiences across the funnel will see valuable actions in return, Brown maintains, from advocacy to brand love to even repeat usage.
Sourced from Admap