CMO talks to four brands running customer loyalty programs to find out what they’re doing to buck the trend and meet the changing needs of technology-savvy, mobile and less faithful customer
More benefits through digital innovation: American Express
For vice-president of brand, loyalty and membership rewards at American Express, Morgan Hunter, constant evolution is the key to success for American Express’ customer loyalty program, Membership Rewards.
The program, which has been around for more than 20 years and was ranked in the top 10 in the Share the Love 2014 report, allows members to accrue reward points for dollars spent on their card, which they can then use to redeem travel, shopping and entertainment rewards.
Points can also be transferred to other loyalty programs such as Airline Rewards Frequent Flyer and Hotel Rewards Frequent Guest programs dependent on what reward option an individual is enrolled in.
“Customers want choice, value and convenience when it comes to how and what they can redeem their points for, so having a loyalty program that delivers this is key,” Hunter told CMO. “We want our card members to have the flexibility to use reward points for the things they need and want most, whenever they want, that’s why we’ve introduced ‘Select and Pay with Points’ so card members can conveniently choose specific transactions they wish to redeem their points against.”
To keep rewards fresh and relevant, American Express focuses on developing more benefits and more choices. One example this year was extending its ‘Shop with Points’ capability with David Jones, allowing eligible card holders to now use rewards points as payment at the David Jones webstore.
The biggest area of innovation, however, has been digital. Investing in digital capabilities was necessary to reflect the significant role mobile is playing as more card members do things on the go, Hunter said.
One key offer launched through the new digital platform is ‘Made for you’, which leverages American Express’ proprietary Smart Offers technology and allows eligible members to save curated merchant offers to their card in one click, from the iPhone app or online portal.
“When they make a qualifying purchase at the merchant, they will get a statement credit to reflect their savings – no paper dockets or printouts necessary,” Hunter said.
Another new feature is ‘Places’. Based on customer spending history and location data, the American Express iPhone app will provide shopping or personal dining recommendations to members.
Real-time suggestions include places chosen by card members with similar spending habits; the most popular places within a specific category or location; new American Express merchants; and those with live offers available nearby.
On the iPhone app, American Express has launched ‘Local Champion’, which Hunter claimed goes beyond standard account servicing features in banking apps. Card members frequently visiting their favourite businesses can be recognised by those locations for their loyalty. For the length of time a member keeps their ‘Local Champion’ status, they are rewarded with one extra rewards point for every dollar spent.
"One of our objectives in launching new digital capabilities has been to enhance the experience of Card Members when it comes to being made aware of content relevant to them,"Hunter said. "Based on the offer enrolments and redemptions rates our Card Members have embraced the convenience of those enhancements. Since launch in November 2013 many of our special offers for Card Members have reached their enrolment cap in a matter of days, and the average redemption rate has exceeded 24 per cent."
American Express has also launched the American Express Pass for Apple Passbook in Australia. Card members can register and add the Amex Pass to their Passbook for access to their account information on their iPhone or iPod Touch including recent spending updates, push notifications for each transaction, real-time account balances and customer service information.
“Australians are more rewards focused than any other consumers,” Hunter concluded. “Australians like to redeem their points in different ways – whether for travel, merchandise, gifts, credit on their card, or gift vouchers – and it is for this reason American Express has continued to develop its Membership Rewards program to offer more benefits, more choices and more relevant rewards.”
Globally recognised value: Accor
Australian director of loyalty for global hotels group Accor, Renae Trimble, admitted the organisation is relatively new to the customer loyalty game for a hotels business, launching its program in 2008. Despite this, it has already attracted 14 million members worldwide to the points-based program.
Members can join for free and are tiered into Classic, Silver, Gold and Platinum status. Based on the number of nights stayed across the group’s 2700 owned, managed and franchised hotels, members then get access to points and various experience-led rewards. The hotels range from basic through to luxury brands.
“The key is getting the balance right between not making it too hard, and not too easy,” Trimble said. “Customers need to see and get value from the program.
“Depending on the market, you may know one brand over another. Australians for example know Accor, but in Europe they are more familiar with the Novotel brand. So it’s pretty easy for us to add even more depth to the program through having these brands.”
Customer feedback is vital in keeping the program alive, and Trimble said regular market feedback has driven changes and new directions. One lesson learnt early-on was ensuring communication to members was relevant and timely.
We know that active members spend more, stay longer, and can see that at an individual hotel level and in terms of revenue
“We don’t want to over communicate, but we have to send out the right message to members,” Trimble commented. “This comes down to having accurate data and positioning offers that have genuine value for that customer.
“The single most important thing we learnt is that what works as an offer in the UK won’t work here in Australia. And that comes down to how we communicate. These offers are what drive people and their view of our value.”
Customer data is another component, and Trimble said the group strives to look at data in its totality, rather than in isolation. Accor also regularly surveys members, and looks at activity rates and Net Promoter Scores to determine customer satisfaction.
According to Trimble, another differentiator hotels have over other types of industries is that staff have regular opportunities to engage in face-to-face conversations with members and glean insights that way.
Like other loyalty programs, technology is also growing in importance for Accor. In 2013, the group launched a new website and additional booking functionality to allow members to use points, or a combination of ‘points plus pay’, for new bookings. Other new features include the ability to access richer content, view account information and personalise experiences.
Last September, Accor also revamped member benefits to give members at a Silver level or higher free Internet at any hotel worldwide. This decision was based on customer feedback, Trimble said, and represented a significant change in strategy.
The next step is to look at how to better package stays based on points and help loyalty program members with create the ideal experience for them.
“We know that active members spend more, stay longer, and can see that at an individual hotel level and in terms of revenue,” Trimble added. “Our commitment is that the customer is at the centre of what we do. We will continue to create a culture where people feel they belong and are recognised in a meaningful way, particularly at the hotel and individually.”
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