Don’t Be Left Behind: Think Differently About Loyalty

The Evolution of Loyalty

This is a guest article by David Leeds, founder and CEO of Tango Card

Today consumers are rewarded for loyalty in almost everything they do. Check in with foursquare to earn badges or become mayor; reach a new level on Mega Jump and get a 10% off coupon as a prize; research and book your family trip to Atlanta on the web to earn credits; complete an online survey in return for the gift card of your choice. Our interactions with products and brands are increasingly gamified, and given the growing overlap of personal and professional lives, gamification spans everything we do.

Gamification has become an undeniably effective tool to drive the Holy Grail of marketing: real and lasting loyalty. In the past consumers would join a few big loyalty programs, accrue points and then once or twice a year redeem for a big ticket reward. Large denomination gift cards were sent via snail mail, big screen TVs would show up in time for the big game, and airline mileage was exchanged for a family’s trip to an exotic locale. But what was the impact of these rewards? How did a TV relate to and reinforce the behavior the loyalty program was trying to drive? What if the reward experience was negative, like the airline miles couldn’t be adjusted for blackout dates or the television was delivered with a big dent?

In the consumer’s eyes the loyalty program may have been more of a hassle than a benefit. Customer expectations have changed. They require immediacy – from responses to feedback and service requests, speed of product updates, timing of notifications, and instant gratification. Teams that design and operate modern loyalty programs must respond, refresh, and retool by taking three actions:

1) Engage differently.

Teams are using gamification in everything they do and you can see it everywhere. One cool area is in the “second screen.” Popular TV shows can now interact directly with you. Watch New Girl on FOX or Celebrity Apprentice on NBC and earn points for answering questions about your favorite characters, commenting on funny lines in the show, or sharing content on social media. The more engaged you are, the more points you earn. The more points you earn, the more likely you are to top a leaderboard. And if you top the leaderboard, you win! In a world now filled with literally thousands of options and the ability for consumers to skip ads, media can reach, engage, and reward you directly. This is happening in more and more places today – look around and you’ll see it.

2) Reward differently.

There is a fascinating and counterintuitive trend happening: companies are engaging more and spending less. Digital delivery has made smaller denomination products economically feasible. Take gift cards, the #1 requested reward in any loyalty program. Historically the ‘go to’ gift card was a $25, $50, or $100 denomination. These were the lowest value gift cards that could be physically mailed in an economically viable way. Now with digital delivery, programs can easily send a $1 gift card. Companies can now engage more frequently, reward more frequently, and spend less. In order to better reward the user, Tango Card’s customer Microsoft decided to move to an all-digital rewards experience in its Bing Rewards redemption center. This digital approach and ability to deliver rewards usually within minutes helped drive user satisfaction up. “Engagement has improved due to this speed and almost instant gratification that members now experience,” said Alex Danskin, Bing Product Marketing Manager. Research shows early customer recognition and more regular rewarding drives better results. Plus no one wants physical delivery any more. Send me a digital good. Put it in my inbox or put it on my mobile.

3) Leverage data differently.

An often overlooked byproduct of both gamification and loyalty programs is the incredibly rich data. Loyalty programs are all about rewarding the best, most loyal customers. Personalization and 1:1 marketing is the result of good data, which can be leveraged into better offers, better rewards, and deeper loyalty. Use gamification and loyalty program data to align your business and product incentives with your customers’ needs. Don’t forget to take advantage of the improved visibility, tracking, and measurement of how a customer uses a product or service, engagement levels, ROI on spend, and much more.  Gamification represents an important tool for loyalty marketers to improve their business impact and keep costs down, and companies and brands would be wise to take advantage of these three actions to supercharge their loyalty programs.

David Leeds is the founder and CEO of Tango Card, a Seattle startup that makes gift cards and rewards strategic for enterprise customers. Learn more at www.tangocard.com or follow him on Twitter @TangoCard.