This post is brought to you by AIMIA.
Like many other facets of marketing, the customer loyalty space is constantly evolving with the emergence of new technologies. Just in February this year, Singapore Airlines launched a blockchain-based airline loyalty digital wallet to unlock the value of KrisFlyer miles to enable everyday spending at retail partners.
During a recent round table hosted by Marketing, Kevin Kan, managing director for Asia at Aimia, said that blockchain was something to keep an eye on right now in the loyalty space as it addresses concerns such as security and data. If there is currency attached to a loyalty programme, it provides even more value.
“We’ve seen the evolution of loyalty cards with airlines; historically it was an extra card. Then it became an extra card with foreign currency on it. Right now, loyalty is not only moving into the mobile wallets space, but also finding applications with blockchain,” he said.
He explained that a large part of loyalty marketing today was driven by technology, especially with the emergence of mobile wallets. While this has allowed loyalty cards to go digital, the need for authenticity has become greater than ever in customer engagement.
“Digital and technology is transforming loyalty and engagement with consumers and enhancing it. This allows brands to differentiate themselves from others,” he said.
Henrik Berglind, vice-president of customer experience and loyalty for Asia Pacific at AccorHotels Singapore, added that blockchain provides huge benefits for companies operating their financial transactions across borders. In terms of information, blockchain also provides a lot of value. “If there is an opportunity through blockchain to create an ecosystem which gives everyone a fair share with a lower cost distribution, it will definitely be an interesting space which disrupts fintech too,” he said.
A seamless customer journey
That being said, not all brands are on board with new technology, which means they miss a great opportunity for their loyalty programme to be readily in the hands of their consumers. New technology can also help process customer information and profiles better to create more real-time pleasures based on their preferences. Another common use of digital and technology in the loyalty space is gathering feedback. Berglind added that a lot of companies are using digital to gain reputational feedback whether it’s through review sites such as TripAdvisor for the travel industry or through company surveys.
“The interesting part now is getting that real-time feedback and augmenting that experience to create long-term brand loyalty with customers,” he said.
In the case of AccorHotels, the company works with partners such as Local Measure to drop a “tech-net” over the hotel and monitor what is being said publicly over social media about the hotel, allowing it to have instant feedback to a guest in the hotel from employees. It also allows the hotel to find out what guests like and don’t like, and in the process, help with service recovery.
“This led to an improvement in review scores because it allowed us to solve guest problems right away. Our hotels also have a reputation performance score, of which general manager bonuses are based on,” he explained.
Meanwhile, Jeremy Yeo, head of user experience at Jewel Changi Airport, added that another application of technology to spur loyalty would be making the customer experience frictionless. This can refer to acquisition, engagement and entrenchment.
“If your consumers take more than three steps to sign on to the loyalty programme, you have lost half the battle. This is especially important if your brand prioritises efficiency such as the likes of Changi Airports,” he said. Yeo added the irony of loyalty is just because a consumer spends more time with a certain brand, doesn’t make them the most loyal. The reverse is also true. Many consumers today are “footloose” and have no qualms about switching from one brand to another. While some marketers may tackle that by drilling down on personalisation and gathering as much data as possible, the advent of technology runs a risk of being too transactional.
“It’s about establishing a relationship which is authentic and relatable, it cannot be transactional,” Yeo added. Changi Airport is also big on ensuring consistency of experience to all travellers. As such, it needed to make sure all its partners were on board for a consistent customer experience. To help this, Changi Airport and its partners established three main principles across the experience – being personalised, stress free and being positively surprising. But this, of course, didn’t happen instantly because many partners and staff were still grappling with the concepts for the first three years. For Changi Airport, it took nearly five years.
“It’s only in the past five years where we started to reap the fruits, so training is a long-drawn exercise, it is an investment and the ROI only comes much later on,” he added.
Echoing the sentiment is Caroline Gazeley, regional connected product planning manager, global connected customer experience at General Motors International, who added that partnerships to bolster loyalty also needed to be relevant and make sense. This will allow for greater connectivity between the brand and customer. For example, through its data and customer intelligence, General Motors, with customer consent, was able to provide car insurance options based on how its customers drive their cars. It also sends them scores on how they can improve their driving.
“For us when it comes to loyalty and trust, it also comes down to what your customer stands for, understand where they need knowledge and also being able to provide that knowledge,” she said.
For David Chung, senior marketing manager at Trans Eurokars, creating a one-of-a-kind experience is also key in encouraging long-term loyalty of the brand. For Mazda, the brand conducts drive-aways for the customers; this includes a trip to Malaysia with wider spaces to help customers understand what the cars are capable of and how the experience is different.
“After a while, one of our customers told me he could not drive anything else despite driving other cars. It was because those other cars did not give him the same driving experience,” he said.
Chung said those “connections” are what turns customers to advocates. As the loyalty space evolves, brand advocacy is also growing in importance with consumers today, said Jeffrey Cheng, senior global brand director – Dove, Unilever Singapore.
“For me the holy grail of customer loyalty is when they become advocates for the brand. Not only do they become endorsers, they also establish communities which your brand can be part of,” he said.
Elaine Ng, head of communications at Philips ASEAN Pacific, added that while the product, of course, matters, a large part of brand loyalty comes from brand affinity. This is where storytelling can play a powerful role by building recognisable brand stories for consumers on what the brand stands for. “Hopefully, these stories resonate with them and they come back to your brand for more,” she said.
Of course, as with any niche area in marketing, challenges in the loyalty arena remain. Eric Ng, head of marketing and circulation at Singapore Press Holdings, said changing stakeholders’ mind-sets was a challenge and marketers need to try and lead the change internally by going to other stakeholders.
“This includes justifying the ROIs, as well as determining what the long-term and short-term gains are. We all know that loyalty marketing is always the right thing to do, but it is also dependent on getting management buy-in at the end of the day,” he said. Meanwhile, Nicole Lai, head of marketing for APAC at Royal Caribbean Cruises Asia, said while the company had a standardised worldwide loyalty programme, it did not resonate with local Singapore consumers. As such, it created a specialised programme just for the Singapore market.
“We had a hard time educating people what it really was. We are also the only ones in the market with a localised programme because customers ask for local land-based promotions,” she said. Benjamin Lim, director of business development, insights and loyalty solutions at Aimia, explained that at the end of the day, understanding customers through insights is also a necessary measure when it comes to the customer loyalty journey.
Having the right insights, said AirAsia Singapore’s head of marketing, Sharon Cheong, is what helps the company market to the right type of adventurous minds, when launching new routes. And this right targeting helps it stand out amid the sea of promotions in the budget airline space.
“At the end of the day, for us in Singapore alone, we fly 18 direct routes out of AirAsia’s network of over 130 destinations. So depending on the campaign, we have to look at the data and utilise what is relevant,” she added.
Weighing in on targeting even before the purchase, Christopher Tarr, head of Samsung Pay for SEA and Oceania at Samsung Asia, added that while creating a connection is important, doing so before a customer makes a purchase decision is also vital. In the case of Samsung, customers usually hear about new brand initiatives through its loyalty platform for customers. This platform provides benefits and rewards to customers, creating engagement in the process.
“I think for us the challenge is how we leverage those platforms across our other marketing activities to support our CRM and not have it just be a regular marketing message. It also needs to be part of the customer life cycle and how they engage with us,” he said. Anson Dichaves, director of brand and channel marketing, centre of excellence, sales and marketing at DKSH Management, is of the view that moving forward the key to loyalty is monetisation.
One way to achieve this would be creating specific promotion programmes to mine loyalty initiatives such as points.
“It’s not always about the points, but rather hitting the right sweet spot for customers to convert their purchases, this will allow you to hit your numbers,” he said.
For him, the next step for loyalty marketing would be membership marketing because most of the work to encourage loyalty usually starts at getting a customer to become a member. “Loyalty, honestly, is a holy grail, for some people, and for me. We have to accept that customers are now increasingly multi-brand because the amount of choices has exploded,” he said.
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