Purple Square have been speaking to customer experience leaders from top global brands about Reimagining Customer Experience (CX). In this interview Tim Biddiscombe speaks to Gianfranco Cuzziol, International CRM and Personalisation Lead at Avon.
Tim: How can brands ensure they’re running an effective loyalty programme?
Gianfranco: The term ‘value accelerator’ isn’t widely used to describe loyalty programmes, but I like it. Essentially it means that brands should take a holistic view. They should look at all the loyalty schemes they may have in play and evaluate what’s working. If certain schemes aren’t adding or accelerating value for the business or their customers, then it’s either not the right fit, or it’s not necessary.
Put simply, unless it’s solving a problem or meeting a desire, personalisation – and by extension, a loyalty scheme – is pointless. If it is of no value to the customer then it’s of no value
Tim: How do loyalty schemes deliver effective value for brands?
Gianfranco: Loyalty schemes accelerate data capture. The reason being that there’s a more obvious value exchange for customers in sharing their data. And also, loyalty schemes influence customer behaviour, if only because they make sure the brand name is front of mind when the customer is ready to purchase again.
Because as a brand, you’re understanding the customer better, it allows you to reduce dependency on discounts. For the customer, with a loyalty scheme, there’s already a benefit in buying from your brand – which is the reward element. That means customers within a loyalty scheme are more likely to buy at full price than wait for a discount, because there’s a reward element involved.
Tim: How can brands without a loyalty program use the core concepts of loyalty?
Gianfranco: There are brands that don’t have an overt loyalty program but there are certain behaviours they want to reward. This is where a recognition program comes in. Brands need to understand the behaviour mindsets they want to influence as part of that recognition program.
As an example, Aesop’s vision for loyalty is very different. As a luxury brand it is less overt than more mainstream lifestyle brands. It is based on recognition, not transactions. They take a more behind the scenes approach to extend the tenure of relationships with customers. Recognising and rewarding their long term-loyalty.
Even if a customer’s only purchase is a gift set each year for Christmas, Aesop want to recognise that. They might send the brand book to customers who show loyalty year after year as a thank you for valuing the brand. If reformulating a product, they want their customers who regularly buy it to be part of it. Aesop will send them samples and ask for their thoughts, invite them to skincare consultation events to talk about the product, attend the launch and make sure they get access to new products ahead of the general public.
Tim: Do you think brands are shifting strategy from transactional to emotional loyalty?
Gianfranco: A lot of brands talk about the evolution from a very transactional loyalty and recognition program to an emotional one. If a customer feels they are a part of the brand, the brand is starting to touch on that emotional loyalty.
Is everyone going to emotive loyalty? I don’t think you can make a generic call like that. For some brands a simple, transactional approach to loyalty makes sense. The value of My McDonalds Rewards, for example, lies in the fact that it helps get people through the door and buying their food. It is all about driving transactions, rather than enhancing the experience.
Some of the more emotional, less frequently transacted brands however, may be more focused on emotional loyalty. For certain audiences, gamification is perfect and for others it’s not.
The Body Shop offers regular discounts and incentives in the first sixty days after a customer signs up to help encourage them to keep their products top of mind – and in their baths, showers and bedrooms. From there it quiets down. Customers continue to earn points and rewards they can redeem, but the messaging changes from discounts to experiences and exclusive offers for members.
Tim: What is the key to retained loyalty after a customer is established with the brand?
Gianfranco: I’ve done a lot of work in retail and there’s a sense there that getting people to for example their fifth shop is the nirvana. They’ll stick with you after that. The loyalty piece is knowing what you can’t mess up in order to keep that customers loyalty. Is that missing a delivery slot? Is that delivering a product that isn’t up to scratch? Each brand needs to understand which elements of their CX experience are crucial for their customers and make sure they don’t get them wrong.
In the grocery sector, for example, you are much more likely to lose a customer if you repeatedly change or cancel their delivery slot than if they receive a cucumber that’s slightly past it’s best.
Tim: What are the future loyalty trends marketers should be paying attention to?
Gianfranco: Firstly I think personalisation that is of real value to the customer. CRM, personalisation, CX and loyalty are all linked, you can’t tear them apart. Brands need to spend more time thinking about which behaviours they’re trying to recognise and influence as part of their loyalty programme and which parts of it need personalising. It can be a pointless exercise to collect more data to personalise something that is of no value to the customer.
Secondly, what to do about Gen Z who are not loyal to anything? I think emotional loyalty is a big card to play with this group. How to get that right with Gen Z will be a big conversation over the next few years.
And then there’s the Metaverse. There are all kinds of conversations around how, particularly the high-end brands, are doing stuff there. I think from a loyalty perspective there is potentially an opportunity, for particular customer types, to show recognition and enhance loyalty.
And that’s happening already. For kids for example, with Barbie dolls. If they buy a Barbie outfit from the toy store, they can get the equivalent outfit for their avatar. I think that’s where the metaverse is going. Someone buys an outfit and they are rewarded by getting that outfit in the metaverse. Or if you go to a physical event, you might get a digital proof of attendance that you can show off to other people in the digital world. Within particular communities, this has a very strong appeal.
This interview was also featured in a related article on mycustomer.com on7th March 2023. Read it here.