Sunday Times : Rewards & Loyalty 2016 RewardsAndLoyalty2016 | Page 45

[ ENGAGEMENT ]

IMAGE: GRAPHICWORLD / SHUTTERSTOCK

Another challenge with engagement is measuring it. Membership numbers are no indicator of engagement. Carlos Simões, executive member for relations at eBucks Rewards, says:“ The indicator of engagement that we typically use is this: if we give X to a customer, is it being used? Our earn-to-spend ratio is at about 90 %, and when we truck that against global figures, which are about 70 %, then our rewards programme is looking healthy.

“ A reward in itself won’ t necessarily garner loyalty. The product and service that you offer also have to be good. The reward component simply helps you to differentiate your product from the next one.”

Melzer continues:“ There are two ways to approach rewards and loyalty – run your own programme, or be part of someone else’ s. So if you’ re a retailer participating in someone else’ s programme, are you really engaging?

“ REAL ENGAGEMENT HAPPENS WHEN YOU CONVERT A CONSUMER TO A CUSTOMER, BECAUSE YOU UNDERSTAND THEM – AND NOT JUST THEIR DEMOGRAPHIC DETAILS.”

“ Part of the value of rewards and loyalty programmes is getting to the data, because then you can customise and personalise your programme. Brands need to drive behaviour in more targeted ways, and offer specific incentives. If you don’ t have the data, you can’ t do that. If you’ re part of someone else’ s rewards programme, what data are you getting back?

“ Campaigns are partly to encourage loyalty, but the real crux is the data,” she points out.“ The biggest challenge is how many members you can contact – not how many you have. And do you have permission to contact them? Then it’ s about what you say – how many emails are they getting? Which will they open? Customers are asking,‘ What’ s in it for me?’ And if they’ re not getting something, they probably won’ t open that email. As they learn to recognise which ones contain benefits for them, those will be the ones they open.”

Broccardo points out that brands need to start taking notice of what their customers are saying – on traditional as well as new platforms such as social media.“ They also need to remember that customers are at different life

WHY DON’ T MEMBERS ENGAGE WITH THE PROGRAMMES THEY ARE REGISTERED FOR?

According to the Eighty20 survey, the top cited reasons for disengagement are:

• Limited affinity towards the primary or underlying offering;

• Low perceived value of rewards or limited reward appeal;

• Low reward-to-effort ratios; and

• Complexity and poor communication.

stages,” he says.“ If you take a brand like Coca-Cola, for example, it has a huge span of customers from kids through to geriatrics.

“ You have to look at all the marketing channels available. We believe traditional marketing will become less of a priority in future, because if you look at just the youth, for example, they’ re on all the digital channels, so you can target them more easily there. Your methodology becomes key, as do your mechanisms of enticement.

“ We believe mass consumer promotions will become a thing of the past. There’ ll be a shift towards micro-campaigns that are always on. Brands will move from doing mass campaigns to talking to people individually, and we’ ll have to systemise the process as much as possible.

“ The challenge is the value proposition – there are hundreds of rewards programmes, so they must be compelling to engage the consumer. And we know that engagement drops off. So you have to continuously evolve the programme – understand what people want and customise it. Give them the best experience and choices.”

But there is a noise problem: the Eighty20 survey shows that on average people belong to about nine different programmes.“ Many consumers feel overwhelmed and bombarded, so you have to do something different,” Melzer notes.

Simões concurs:“ There is a proliferation of rewards in the market, and it’ s great if you’ re

KEY INSIGHTS FROM THE EIGHTY20 SURVEY ON ENGAGEMENT:

the innovator, or if there are just one or two big players. But today there are more than 100 rewards programmes, each trying to copy someone else – how do you stand out of the crowd? Also, given all of this, how do you keep a level of personalisation and make it relevant?

“ For us, the key is to make it simple, and package the programme so it’ s easy to use. In the banking sector, we don’ t have a particular market segment, as we have a really big range of customers, so it’ s not one size fits all. It must be relevant across the board.

“ One customer might earn R2 000 a month and he’ s looking to stretch his budget and get rewards in the area of fuel or groceries or airtime. On the other side, you have someone who uses their rewards for something indulgent – travel or an experience. So it’ s many things to different people, and it has to speak to everybody. That’ s the challenge.”

There are many variables, it seems, and each brand’ s customer base will demand a different approach – simply issuing a card with points is no longer going to be enough to drive the kind of engagement most programmes are looking for.“ Brands need to figure out what consumers are passionate about and target that,” says Melzer.“ But the crux is that if your programme doesn’ t change consumers’ behaviour, it’ s not being effective.” ■

REWARDS & LOYALTY SA 43