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Nordstrom heard from its customers that they wanted a more personalized and flexible loyalty program.
“We were pleased to collaborate with Aimia to deliver on that through our expanded Nordstrom Rewards program,” Chris Holloway, Vice President of Loyalty, Nordstrom, told Loyalty360. “We heard from our customers that they wanted a more personalized and flexible Nordstrom loyalty program.”
Loyalty360 caught up with Gerard Whelan, President – Americas, Global Loyalty Solutions, Aimia, to learn more about this exciting partnership that sparked member enrollment in the Nordstrom Rewards loyalty program.
How is Aimia enhancing the Nordstrom Rewards loyalty program?
Whelan: Nordstrom worked closely with Aimia to redesign Nordstrom Rewards to become a more inclusive program that allows customers to earn points regardless of how they choose to pay for their purchases. Customers can now enroll by simply providing their name, mobile phone number, and email address. The expanded Nordstrom Rewards launched in Nordstrom stores in the U.S., Canada, and Puerto Rico, and on Nordstrom.com in May 2016. In the first three months, Nordstrom has enrolled approximately 1.7 million new members.
The redesigned Nordstrom Rewards program leverages the Aimia Loyalty Platform – Enterprise (ALP-E), which incorporates Aimia’s global loyalty expertise along with its comprehensive technology suite.
How does ALP-E help loyalty marketers?
Whelan: ALP-E was developed as the next generation loyalty platform providing a suite of real-time tools to manage Loyalty Programs, Promotions, and Members. The platform is architected on an 80/20 principle wherein 80% of functionality comes from the core product, and 20% non-core functionality can be built custom to address unique enterprise client needs, with an adaptable integration framework to ensure end-to-end ecosystem delivery. ALP-E’s cloud-based model and architecture ensures ultimate scalability to grow based on client needs.
Key features of ALP-E:
Nordstrom added 1.7 million new members to the program since May. That’s a big number. What are the implications of adding that many members so quickly?
Whelan: Loyalty is an important window to understanding one’s customers. When only a limited percentage of customers are involved in a program, the marketer’s field of view into their customer portfolio is similarly limited. By redesigning a program to make it more appealing and inclusive to a wider audience, marketers improve this field of view, and by extension improve their ability to engender loyalty across their entire customer base.
How did program enhancements help spark these new member registrations?
Whelan: The redesigned Nordstrom Rewards allows customers to earn points regardless of how they choose to pay for purchases. This change made the program more appealing and accessible.
When companies listen to their customers feedback, understand their values, and focus on customer experiences, they can see a positive impact on their business. By giving its customers what they want, Nordstrom has effectively improved customer relationships and paved the way for greater brand loyalty and great service.
How is this program more personalized and flexible?
Whelan: Nordstrom Rewards’ flexibility is inherent in the ease of customer sign-up, as well as the customer’s ability to choose how to pay for their purchase, putting control squarely in their hands.
Leveraging ALP-E, which incorporates Aimia’s global loyalty expertise along with its comprehensive technology suite, Nordstrom can manage the program with easy-to-use tools and track customer interactions with a single, real-time view. By collecting transaction and interaction data and providing real-time reporting, ALP-E allows Nordstrom to better understand its customers' needs and respond at every touchpoint, from desktop and laptop to mobile device to in-store, all in an integrated fashion.
How do you define customer loyalty and has that definition evolved in recent years?
Whelan: Aimia believes today’s smartest marketers understand that true customer loyalty cannot be purchased with rewards. True customer loyalty – and, by extension, loyalty initiatives – is measured by assessing the behaviors that demonstrate the extent to which a brand relationship is valued by a customer. As evidenced by findings in Aimia’s 2015 Loyalty Lens Report, the real value a consumer places on such relationships is often not dominated by rewards, but by how well a brand understands and engages her. Loyalty marketers have increasingly had to demonstrate how loyalty strategies and programs fit into a wider strategic vision of customer’s experience, extending well beyond the traditional transaction-based rewards program construct.
Here at Aimia, we foresee that fostering and maintaining true customer loyalty will likely become even more complex and difficult in the future than it is today. Consumers are already overwhelmed by choice, making it difficult for brands to differentiate from each other. At the same time, consumers will increasingly expect to be recognized for their business in real-time, and will “talk back” to brands – often via their social networks – even more regularly and powerfully than they do now.
Additionally, recent research indicates that different consumer populations have unequal propensities for loyalty. We believe brands are becoming increasingly savvy to this reality and are seeking out solutions that can help them target incentives within their customer base with greater precision and efficiency.
What trend (s) do you see or foresee in customer loyalty?
Whelan: Recent research has shown that loyalty programs that are predominantly transactional are increasingly vulnerable to competitors. We believe consumers will continue to be more comfortable engaging with multiple programs – and mainly through their mobile devices - exacerbating the commoditization of transaction-centric loyalty programs. At the same time, as more top brands find success by creating differentiated, brand-enhancing loyalty-driven experiences (such as Nordstrom), they will “lock up” more customers and make it difficult for competitors to convert them.
Additionally, while today’s volume of data is unprecedented - and many continue to struggle to interpret and transform it into insights - we anticipate the growth of data will continue as the “Internet of Things” and other new data sources emerge. At the same time, while today’s time- and client-tested technology platforms provide effective and efficient solutions that show measurable results from more engaged customers, we envision tomorrow’s solutions will simplify and automate this even more, making today’s most sophisticated analytics more the norm than the exception.
Aimia believes that if we continue to help clients to make business personal by going beyond the expected to surprise, delight, empower and engage their customers, they will see a disproportionate return on their loyalty investment. By meeting customers’ functional needs - as well as their emotional desire for privileges and recognition - we are confident tomorrow’s programs will drive behaviors that demonstrate the value customers place on their relationship to the brand, which will always be the only true indicator of loyalty.
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