You’ ve dreamed up a rewards and loyalty programme for your brand. Consumers are signing up in droves, and it’ s all looking hunkydory. But suddenly there’ s a drop in engagement. Members aren’ t using their benefits. Perhaps they’ re unsubscribing from your carefully crafted emails. Where to from here?
Those in the know say this is a common scenario in the rewards and loyalty arena. There are two main reasons to launch a programme: engagement and data. And of the two, engagement seems to be the more slippery slope.
Research and analytics company Eighty20’ s 2015 survey of loyalty-programme member engagement confirms this phenomenon:“ While upwards of 60 % of members of larger programmes indicate they are active users, there is a noticeable drop-off in terms of active use on a number of key programmes.”
TOUCH,
PAUSE,
ENGAGE
A KEY CHALLENGE FOR LOYALTY AND REWARDS PROGRAMMES IS TO INCREASE MEMBER ENGAGEMENT RATHER THAN FOCUSING ON THE SIZE OF THEIR MEMBERSHIP BASE. MANDY COLLINS LOOKS AT HOW TO GET THIS RIGHT.
BUILDING RELATIONSHIPS
What does“ engagement” actually mean? What is this elusive relationship brands are looking for with their customers? Illana Melzer, Eighty20 director and lead researcher on the survey, says brands sometimes get a little carried away. According to Melzer, the bottom line is:“ If a transaction is compelling, the customer will participate. They don’ t really get caught up in it – if it will do something for them, they will do it. And it has to be compelling. Sometimes there are soft benefits – it’ s not always a rand value – but there’ s usually something tangible the customer gets.
“ It’ s about getting the equation right: offering the customer something that also adds value to the business. But most often, customers are simply being rewarded for something they’ ve always done. So they’ re getting discounts, but they’ re not behaving any differently. Engagement is asking how the programme will encourage the customer to choose you – especially given that there are so many other programmes available.”
Marco Broccardo, founder and CEO of data consultancy ColonyHQ, makes an important distinction:“ At surface level, you have a consumer choosing your product over someone else, but most brands really have consumers, not customers. You can drive a consumer to do things, but it’ s not real engagement. Real engagement happens when you convert a consumer to a customer, because you understand them – and not just their demographic details. You understand what makes that customer tick, and then you leverage that to put the right thing in front of them.”
He adds that in many cases the engagement only goes in one direction.“ Most brands don’ t really engage with their customers,” he says,“ and until they get that right, there can be no relationship.”
42 REWARDS & LOYALTY SA