Some familiar faces made an appearance on Wednesday at the 9th annual Loyalty Expo, presented by Loyalty360 – The Association for Customer Loyalty. Four marketers, who have all attended numerous Loyalty Expos in the past, presented the session, “Loyalty Revisited−A Retrospective Panel Discussion with Loyalty Expo Alumni.”
The four marketers were: Ron Orgiefsky, Managing Director of emnos; Ramsey Pruchnic, VP of Marketing Systems and Data Management Platform, Red Lion Hotels; Bob Highland, Head of Business Developments and Pay Networks at Barclaycard US; and Kayla Anthony, CRM Marketing Manager at Raley’s, a supermarket chain in California.
The quartet tracked the evolution of customer loyalty, the challenges facing marketers today, and what the future might hold. Orgiefsky began by asking his peers if customer loyalty had changed since they were at their last Loyalty Expo, or from when they first began in loyalty.
“I saw there are three billion loyalty enrollments in the U.S. today,” Highland said. “That’s 29 loyalty programs per household. It’s become a really crowded and complicated space compared to 15 years ago.”
Orgiefsky asked Highland if he thought fatigue was a problem.
“Yes, I do,” he continued. “The majority of loyalty programs don’t make any money. There are very few programs that can demonstrate lasting ROI, and those are the ones that stay around. My guess is you’re going to see a lot of consolidation in loyalty.”
The panelists were then asked how customer loyalty was being prioritized in their organizations.
“The reason I consider it a top priority,” Pruchnic said, “is our program is based on fueling passion and understanding our customer. It all starts with knowing who are customers are, and then recognizing them and adapting our campaigns and promotions based on that data.”
Anthony responded: “Our leadership has made it a priority for customer engagement in stores. It’s been a huge success especially with us being a small regional retailer. One of the things we wanted to emphasize is while the customers are in the store how can we get them familiar with the program? How can we gain new acquisitions?”
That has been accomplished primarily through having employees engage the customers and remind shoppers about the program, or inform them about how much they saved on that visit thanks to the loyalty program.
The conversation turned to changes in technology, social media, and big data, and how those have impacted loyalty.
“The challenge has been immersion,” Highland said.
The majority of loyalty members navigate programs with technology, but at the same time, personal interaction is lost.
“Sometimes, technology and information can wind up hindering the loyalty experience,” Highland added.
He offered a personal example of waiting in line at a drug store, trying to purchase a bottle of water, while the customer ahead of him attempted to remember his loyalty card number.
“What should have been to quick transaction turned into a five-minute wait for me,” he said. “Not a good customer experience.”
Anthony concurred, but added that, for her organization’s program, there are other avenues for engagement such as point-of-sale or direct mail for customers who aren’t comfortable or savvy with technology.
“One of the challenges we have seen within social and technology, in general, in the grocery space is that it’s such a competitive industry there are people popping up all over,” Anthony said. “Walmart having supercenters, dollar stores stocking groceries and trying to get into the space, we’re constantly fighting for market share.”
Social media at one time was a great tool to combat this, but getting exposure is becoming more diluted now, she noted.
Orgiefsky asked the panel to peer into a crystal ball and gauge the future of loyalty marketing.
“Loyalty programs will need to simplify and fit into the way we travel and shop,” Highland said. “You see a lot of loyalty programs start and die.”
What’s more, Highland predicts that loyalty programs will have to consolidate or they will all suffocate each other in the consumers’ wallet. He sees three or four programs per consumer as the optimal number, with one program covering several brands from different sectors.
Anthony sees customers being less and less loyal to a brand, simply because of the sheer number of choices they have.
“There're so many options for them,” she said, “coming up with ways just to retain customers will be the key.”