Part 1 – Traditional Loyalty is at a Cross-roads
As consumers, we don’t have to look much farther than our own smart phone to realize that even the newest loyalty programs don’t really work. However, its not for a lack of trying. A recent study by Accenture suggests that 90% of brands employ some kind of loyalty program. It’s likely that most of us have used a mobile app that is intended to be the “remote control for the relationship”. Unfortunately, for the vast majority of customers, after the newness of the app wears off so does the effectiveness of the program.
The Accenture report offers that the lack of adoption is only the beginning suggesting that 25% of consumers say the repeated attempts at engendering loyalty are hurting the relationship. Even more unnerving to the brand, Millenials are more likely to have a negative reaction to a company’s attempt to earn their loyalty.
Using myself as the example, I have 3 loyalty apps on my phone. One I use when I travel. The other two I haven’t used in months. This pattern seems to reflect the state of the industry according to Accenture. However, there is an important point that seems to be overlooked – my lack of app usage does not reflect my loyalty to those two brands. I frequent each of them, sometimes more than once weekly. I just haven’t found the mode where their app, the stars earned and incessant emails are relevant as a part of my daily life. In the end, their view of me is purely an analytical one that results in an incorrect, or incomplete, view of a really loyal customer.
This ineffectiveness leaves a brand a bit lost when it comes the best way to building true relationships with today’s customer. On one hand, the brand doesn’t know how to connect with their most loyal customers…and apps aren’t helping. On the other hand, the never ending barrage of promotional offers pushes us away.
For Brands, the crossroads is real, yet all hope is not lost. In part two of this post, we’ll explore the areas of location and frictionless customer experiences as they hold hope for loyalty marketers.