The new currencies of loyalty » strategy

The new currencies of loyalty

A report by Bond Brand Loyalty highlights the benefits of engaging with customers through perks that fall outside of points.
BondLoyaltyReport2018

To keep abreast of consumers’ fast-changing expectations, loyalty programs must be willing to evolve their offering and engage with consumers in new ways, according to marketing consultancy Bond Brand Loyalty. The secret to that evolution may lie in the “new currencies of customer engagement.”

Defined as “perks and benefits that are created by repurposing and monetizing existing assets,” these new currencies go beyond points to deliver on other needs, such as time, ease, convenience, meaning and confidence, according to a recent report by the consultancy.

Citing research from Bond Brand Loyalty’s Loyalty Report 2018, the report notes that 85% of consumers said they find “alternative currencies,” including Wi-Fi access and quicker check-out lines, to be “highly valuable.” That number was slightly higher (88%) among respondents from generation Y.

Moreover, according to the firm’s research, the reward and redemption of points represents only one-third of what drives their satisfaction with loyalty programs, whereas two-thirds are “the experiences that program facilitates with the brand.”

At the same time, these new currencies can help mitigate some of the costs of traditional programs, as they often have fewer or no material cost outside of an initial investment. Bond Brand uses the example of priority check-in for airline passengers. The perk is cheaper than offering a free ticket, and once experienced, can lead customers to want to experience that luxury every time they travel.

Uber has successfully leveraged the currency of access with its ride upgrades allowing customers to catch a ride in one of its “Select” or “Black” vehicles, while over in the U.S., Amazon Go enables time-starved customers to save time with its cashierless set-up. Bond Brand imagines a future in which the retail giant offers Prime members specific Amazon Go perks, such as order ahead and pick-up.

Not only do these forms of currency offer new ways to engage with customers, but consumers are increasingly open to having companies track their activity, making them easier to implement. According to the Loyalty Report, the vast majority (87%) of loyalty members are willing to have details of their activities “watched, monitored and tracked” if it means gaining something in return. Among households with children, that number sits at 88%. Ninety-one percent of those under 30-years-old and 94% of affluent consumers are also open to tracking.

While brands stand to gain from repurposing their existing assets, Bond Brand suggests they should not necessarily be used as replacements to traditional rewards. Rather, brands should consider using points as their “anchor currency” and use new ones selectively.