Beyond the Transaction: Loyalty in the Time of the Social and Mobile Consumer

Looking Beyond the Transaction:
Loyalty In The Time Of The Social
And Mobile Consumer
Tuesday August 28 1:30pm ET

Speakers

Emily Murphy Richard Robins
Analyst VP

Join the conversation on Twitter! #BeyondtheTransaction

© 2012 Forrester Research, Inc. Reproduction Prohibited 2

Got a Question?
Use the Chat window in GoToMeeting to submit your questions
throughout the session; we have left time for Q&A at the end of the
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If we don’t get to your question during the session, please send
questions directly to amberlie.denny@rewardstream.com


What is the current state of loyalty?



Program stats
Loyalty 32% of loyalty
program program
members make members
up 35% of a redeem
company’s rewards
total customer
base'


Responsibility for
loyalty falls on the
marketing team


Budget support for
loyalty programs is
strong

Most programs are supported by small
teams


Marketers rely on
loyalty programs to
improve customer
relationships and
experiences


Customer retention and revenue drive
loyalty efforts
"What are the top three business objectives for your customer loyalty
program?"

Customer retention 58%

Profitability/revenue 48%

Engagement 37%

Customer lifetime value 33%

Customer acquisition 30%

Customer data collection 26%

Customer experience 25%

Customer satisfaction 14%

Customer centricity 10%

Customer service 5%

Competitive threat 1%
Base: 81 loyalty program marketers
(multiple responses accepted)
Source: Q3 2011 Global Loyalty Benchmark Online Survey

© 2012 Forrester Research, Inc. Reproduction Prohibited Join the conversation on Twitter! #BeyondtheTransaction

I
SAVINGS

When it comes to
program rewards,
it’s all about the
discounts


Most programs offer discounts
"Thinking about your customer loyalty program, which rewards mechanisms
do you utilize?"

Discount-based rewards 51%

Experience-based rewards 42%

Coupons 38%

Service-based rewards 32%

Instant wins and sweepstakes 27%

Shared products, services, and currencies with partners 25%

Cash-back 23%

Partner networks 22%

Other 6%



Consumers are most interested in
programs that offer discounts
"How interested are you in joining the following types of loyalty programs if
it were offered by a company you enjoy doing business with?"
(4 or 5 on a scale of 1 [not at all interested in joining] to 5 [extremely interested in
joining])

Programs that offer instant discounts and savings 63%

Points programs that let me redeem my points for products
55%
and services

Programs that offer printable coupons 40%

Points programs that let me redeem my points by
33%
spending them in an online shopping mall

Affinity programs that donate money to my favorite charity
17%
or cause when I make a purchase

Base: 3,847 US online adults
Source: North American Technographics Retail Online Benchmark Recontact Survey, Q3 2011 (US)


Consumer attitudes
towards loyalty
programs are
declining

Consumers limit their participation in
loyalty programs


The perceived value of loyalty programs
is changing
"Which of the following describes your attitudes towards loyalty programs?"
2008
2011

2008
2011
2008 2011
54%
2011 2011 2008 50%

2008 37% 33%
31% 29%
21% 22% 22%
15%

Most loyalty programs I tend to buy more from Loyalty programs don't When choosing Loyalty programs save
don't offer any real the companies whose influence my purchases between two similar me money
value programs I join products or services I
tend to buy from the
one with a loyalty
Base: 3,847 US online adults program
*Base: 4,802 US online adults
Source: North American Technographics Retail Online Benchmark Recontact Survey, Q3 2011 (US)
*Source: North American Technographics Marketing And Mobile Internet Online Survey, Q3 2008


Marketers
struggle to set
their programs
apart

Creating differentiation tops loyalty
marketer challenges
"What are the greatest challenges facing your customer loyalty program
today?"

Differentiating our program from similar efforts in the
28%
marketplace

Understanding customer interactions across all touch
27%
points

Maintaining customer data quality 27%

Delivering offers with a high perceived value 26%

Ensuring member awareness/understanding of the
25%
program and its benefits



How can emerging channels help
programs stand out?



Loyalty programs turn to social
channels for rewards, conversation,
and awareness

More than 80% of US online
adults participate socially.

Brands look to social to increase
awareness.

Some programs incentivize
social interactions.


© 2012 Forrester Research, Inc. Reproduction Prohibited

Regular loyalty program participants
are more likely to engage


Mobile allows brands to meet the new
terms of consumer engagement

Empowered consumers expect
more from brands

Mobile technologies increase
the number of opportunities to
engage members.

Location-based services lead to
non-transactional rewards.


© 2012 Forrester Research, Inc. Reproduction Prohibited

Marketers’ plans focus on mobile

“How would you describe your adoption of the following emerging touch
points for loyalty marketing activities?”
Planning to pilot/adopt Currently using

Mobile applications 40%
22%
Mobile website 37%
26%
2D barcodes 35%
11%
Tablet computing 31%
11%
Mobile messaging 28%
22%
Social networks 28%
40%
User generated content 27%
22%
Gamification 20%
9%
Kiosks 14%
9%


So what?

•Loyalty is increasingly a strategic imperative for
brands and budget support is strong

•Discounts are king, but marketers struggle to create
programs that stand out

•Social, mobile, and location-based services provide
loyalty marketers with a greater opportunity to provide
relevant offers and real value to consumers

© 2012 Forrester Research, Inc. Reproduction Prohibited Join the conversation on Twitter! #BeyondtheTransaction 25

What can you do now?
Up Next: Richard Robins on Practical Ways
to Achieve Loyalty Program Differentiation
Through Acquisition and Engagement



• The value of loyalty programs, as perceived by
consumers, is declining.

• Market differentiation of their program is the greatest
challenge for loyalty marketers.

• Loyalty marketers have pegged mobile
and social as key emerging tactical
areas for their loyalty programs.


“How can you create a
differentiated offering
and positively impact
perception of your
loyalty program?”


… BE DIFFERENT

• Focus on different objectives from competitors’
programs, or

• Aspire to accomplish the same objectives using
different methods


Forrester asked what the top three business objectives
were for customer loyalty programs. Let’s take the top
five…

1. Customer retention
2. Profitability and revenue
3. Engagement
4. Customer lifetime value
5. Customer acquisition


…now flip them around, and focus on the top three:

1. Customer acquisition
2. Customer lifetime value
3. Engagement
4. Profitability and revenue
5. Customer retention


Look Beyond the Purchase

• Increase your customers’ value by incenting them to
do more than just purchase from you. Extend your
program to include other valuable behaviors, like social
sharing, reviews, comments—and more.


Buyer Behaviors along the Loyalty Continuum

Awareness Research Consider Activation Engagement

• Marketing & • Advice from • Sign up for a • Make purchase • Loyalty and
Advertising Friends, Family trial advocacy
• Sign up for
• Referral from a • Visit brand • Visit service • Referrals
satisfied website competitors’
customer sites • Promotional • Share
• Read reviews & offer
•Recommendatio consumer • Price/Service • Comment on a
ns through a opinions comparison • Become a social network
trusted network member
• Join a fan page • Repeat
Purchase


Advocacy, Referrals and Recommendations

• Increase customer acquisition with a customer
advocacy or referral program delivered via social
media

• Trust is the new currency:
Get people talking about you—if
it’s something they’re excited
about, moved by, passionate
about make it easy for them
to share that with friends and
family


Top 100 eTailer: Customer Acquisition Increased by 98%

• Launched a social referral
program to reward existing
customers for recommending
the company to friends and
family
• Customers share coupon
offers over social channels –
it’s easy
• In the quarter after launch,
the program was responsible
for …


Take it on the Road.

• Leverage mobile devices to facilitate customer
product recommendations, 80% of which happen
offline.

• By taking advantage of mobile, you can allow your
customers to refer your brand whenever, wherever
they are “in the moment.”


Top Telecom: Lowering Attrition Rates through Social &
Mobile Referrals

• Acquire new customers
through customer and
employee referrals
• Mobile and web-based
social sharing program
• SMS, email, in-store
and in-pack awareness
• Building relationships
with prepaid
customers
• Lower attrition rate
over other acquisition
methods


CPG of Food Products: Gathered Invaluable CI

• Aspects of their program include: incents and rewards
purchases, sharing with friends, referrals, participating
in polls, surveys, contests.
• Catalog offers items that customers LOVE (and keep
coming back for).
• Utilizes badges and leveling as a way to keep
customers engaged long-term.
• Leverages surveys and polls to improve CI.

“This program is a great example of how a brand took the
basics of traditional loyalty and married in some new
elements – such as sharing, referring and badging – to
create a highly engaging program that is exceeding both
its member and its business owner’s needs.”

Join the conversation on Twitter! #BeyondtheTransactio

Socialize Your Program to Drive Awareness

Kula Causes makes the act of donating talkable.


Get your members talking to increase awareness and
engagement.


What are your next steps?

• Don’t stop what you’re doing, massive change scares
away customers.

• Accentuate your program with fresh ideas. Utilize
initiatives like a social referral program, social sharing and
comments to name a few.

• Use polls and surveys to increase customer intelligence on
your website and social properties.

• Experiment. Take a step-wise approach. Change doesn’t
have to be massive to move the needle.

About RewardStream

Since 1999, RewardStream has been a leading
provider of viral marketing, social referral, social
loyalty, traditional loyalty and engagement solutions
for some of the world’s most esteemed brands.

Spark™ is a viral marketing & social referral solution
powered by the trusted recommendations of happy,
satisfied customers.

• Makes it fast and easy to recommend a brand
through referrals and generates interaction with
customers

• Delivers insight into the recommendation lifecycle.
Track impressions, referrals, shares, referrals by
channel, conversions and more

Thank You for Joining Us Today

Richard Robins, Emily Murphy,
VP Client Success Analyst
RewardStream Forrester Research
Direct: 604.282.7554 Direct:617.901.4944
richard.robins@rewardstream.com emurphy@forrester.com
www.rewardstream.com www.forrester.com

Socialize with us!
facebook.com/RewardStream
@RewardStream

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