How Social Media, Mobility is Revamping Loyalty Program Interactions
Business Solutions Americans do love loyalty programs: the average U.S. household is active in 8.4 of them. What's new in 2011 is that activity goes beyond flashing a plastic card, collecting points, and redeeming them a couple times a year.
At COLLOQUY, we see collectors participating more actively in their favorite programs because of three trends in the loyalty field: Community, Mobility, and Cause.
Social networking gives shoppers more power. There has been a revolution in the last three years in online interaction, and we're seeing its impact on loyalty. Retailers are using social media platforms to invite customers into conversations with the company, and each other, and they are rewarding those interactions.
GameStop, the video game and entertainment software retailer, gives members of its PowerUp Rewards program an online area to build libraries listing all their games.
"Social media is not only making loyalty program interactions more convenient and fun, it’s also giving a forum to consumers-turned-brand-advocates."
Those lists have become the stuff of bragging rights—with friends swiping cards to share their lists with friends. Members get points for establishing the libraries and for purchases,and can trade points for exclusive benefits such as codes to unlock exclusive in-game accessories.
In June, The Ritz-Carlton became the first luxury hotel chain to use social media to deliver exclusive concierge services. using the Foursquare platform, The Ritz presents tips and local information from its worldwide staff of concierges--but only to its valuable repeat guests. Social media is not only making loyalty program interactions more convenient and fun, it’s also giving a forum to consumers-turned-brand-advocates.
The website My Starbucks Idea provides a forum to post ideas about new products, potential locations,and easier ways to place orders. It also solicits ideas for better ways to run the loyalty program, generating over 8,300 ideas to date about the Starbucks Card.
Making it easier to do everything from a phone. Starbucks is also leading the innovation in mobile apps that let customers not only manage their loyalty accounts but also pay for purchases. Almost 90 percent of Starbucks locations in the U.S. became equipped during 2011 with readers that scan barcodes generated on customer devises to make payments directly from customer accounts.
Some 20 percent of transactions at U.S. Starbucks stores are paid for with a Starbucks card, and customers loaded more than $1.5 billion onto those cards in 2010. That will only grow. ABI Research estimates that by 2015, some $119 billion in payments will be made on smart phones and other mobile devices worldwide. Consumers will use phones to scan for discounts and instant promotions, too. Randy Vanderhoof, Executive Director of the Smart Card Alliance, notes that just 10 percent of Americans converting to smart phone transactions will add up to tens of millions of participant.
Points will change the world.Through facebook.com/membersproject, the Members Project from American Express asks customers to vote on which charitable projects AmEx should fund.
RecycleBank gets more people recycling by pairing it with the great American pastime of shopping. Members earn points by actions such as “pledging to recycle Kashi cereal boxes” (50 points) or mailing in old digital cameras for re-use or responsible disposal (up to 200 points),and trade points for coupons and discount offers.
Consumers are hungry for these kinds of “collaborative consumption” partnerships because they want to come together for social causes, and on a scale that makes them truly influential. Make no mistake: companies are paying attention.