Bill Hanifin
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2011 began as a year with loads of promise for Loyalty Marketing. Top of mind for most program managers was the need to add value for members while keeping costs under control, and to better manage the financial liability associated with unredeemed points and miles.
Purchase behaviors exhibited by the Millennial generation were being adopted by broader segments of the population, and early in the year we estimated Consumer 2.0 to represent about half the US population, or 150 Million people.
With the old school orientation of most loyalty marketing strategists, cracking the code of Social Loyalty to engage, entertain and retain the business of Consumer 2.0 was one of the most intimidating challenges faced by the industry over the past 10 years.
So how did the industry fare in 2011 and what’s ahead for 2012?
On the liability management front, the year started out with more rumors floating about than during an American Idol contest. Solutions designed to unify consumer loyalty wallets and create uber currencies, some of which could be redeemed in real time point of sale transactions, as well as those promising unprecedented levels of consumer targeting via internet banking and credit card transactions, were receiving lots of attention. While we still wait to hear more from Free Monee and Swift Exchange, Cardlytics took a big step ahead by closing a $33 Million capital investment from Groupe Aeroplan.
Two highly viable solutions which loyalty marketers should consider not only as liability burn solutions, but as means to to add a new wrinkle to the value proposition are KULA Causes and LoyaltyShares. KULA Causes, which launched in fall 2011, introduced a new concept of Cause Related Loyalty marketing. The “currency of giving” enables loyalty program members to convert miles and points into donations to any of over 2 Million charities around the world. This is a concept which triggers consumer emotions and allows brands to heighten their quotient of corporate social responsibility in a financially efficient manner. LoyaltyShares is equally innovative, allowing loyalty program members to convert miles or points into shares of stock in the sponsoring brand. Converting liabilities into assets is a magic trick that any financially savvy consumer should like.
PointTunes.com and The First Club each introduced solutions that change the way digital content can be obtained by consumers through a rewards program. Improved customer experience and lower costs for program operators are key advantages.
Social Shopping became a reality as Zavee.com and ThanksAgain expanded their respective footprints and delighted consumers in their chosen market segments. Zavee has grown to boast over 500 brick and mortar merchants in their network across South Florida, while Thanks Again penetrated the airport frontier seeking to become a loyalty currency that travelers will aspire to collect before they fly.
“Gamification” took a big step forward during 2011 as both Badgeville and Bunchball proved that “gamification is not a fad”. Watch for much more in this space as game theory moves from a solution designed stimulate consumer engagement to one that can change consumer behavior across a full value chain.
As consumer research consistently supported the desire for immediacy and transparency of rewards along with improved customer experience and proximity to the loyalty “experience”, some important brands proved they were listening.
Early in the year, American Express played the social card as it touted Membership Rewards as a “social currency” and tested location based promotions with Foursquare. More recently, Groupe Aeroplan rebranded as Aimia, signalling a new era of competition among industry leaders.
In a year when many industries slogged along in a mediocre economy, Loyalty Marketers could barely keep up with all the change.
What will 2012 hold in store? I’ll have a look at trends to watch in a future post as the New Year gets started.
