Loyalty programs found to be lacking
Retailers are surely getting tired of hearing about how their digital capabilities fall short of customer expectations but that familiar drumbeat is contained in a new report from Capgemini Consulting called, “Fixing the Cracks: Reinventing Loyalty Programs for the Digital Age.”
U.S. companies spend $2 billion on loyalty programs, according to CapGeminig, but the investment isn’t yielding the type of increased engagement which drove implementation of the programs. For example, the firm found that the average U.S. household is a member of 21 loyalty programs, but only actively uses 44% of them.
A more troubling finding relates to loyalty program participants dissatisfaction which tends to be voiced and amplified via social media. Looking only at the retail industry, 93% of the sentiment expressed on social media was negative, according to CapGemini. To arrive at those findings the firm researched the loyalty programs of 160 global companies across seven sectors including retail, banking, consumer products, telecom, airlines, hotel chains and consumer electronics. In addition, Capgemini also conducted a scan of 40,000 consumer conversations on social media to gauge customer sentiment towards loyalty programs.
The research revealed that most loyalty programs follow a basic transactional philosophy where rewards are based on purchase. Only a small minority of programs recognize and reward consumers for engaging and interacting with the brand in other meaningful ways. Furthermore, most loyalty programs lack personalization and fail to offer cross-channel redemption services. As for the overwhelmingly negative social media sentiment, it stemmed mainly from the lack of reward relevance, rigid reward structures, user experience issues with online channels and poor customer service quality levels.
“Brands need to revisit their approach to loyalty. For us, the key is to integrate the loyalty program into the overarching customer experience and to reward engagement as well as the simple transaction,” said Mark Taylor, Capgemini’s global lead for customer experience transformation. “Additionally, since relevance is the highest form of customer intimacy, offering advanced levels of customization and tailored experiences will enrich loyalty programs and further encourage customer engagement.”
Some of the shortcomings that detract from engagement would appear to be quick fixes. For example, only 16% of loyalty programs reward customers for activities, such as taking online surveys, rating and reviewing establishments or referring friends to the program. Only 14% employ gamification mechanisms to reward customers.
The broad recommendation from the report is that loyalty programs be seen within the larger context of a marketing strategy that is focused on driving customer engagement. Organizations need to look at each step of the loyalty program, from design to evolution, through the prism of engagement.
P&G campaign focuses on Latina shoppers
Proctor & Gamble is trying to increase Latina interest in its products with a new “Living Fabulosa” (living fabulously) initiative.
It is part pf the company’s Orgullosa campaign, which highlights the unique and complex experience of the modern, bicultural Latina — the Nueva Latina.
"Through Living Fabulosa, Orgullosa aims to continue capturing the voices and stories of what it means to be a Nueva Latina,” said Luis Restrepo, brand manager for Orgullosa. “We recognize the U.S. Latina experience is vast and broad, but the pride in having two cultures is a driving force behind the impact they are having in this country. That’s why we want to continue a national dialogue among bicultural women that encourages them to share their experiences and opinions while positively reinforcing how their unique journey allows them to live fabulosa in every facet of their lives.”
Along with the Living Fabulosa forum, Orgullosa activities include:
- Living Fabulosa takeover at Hispanicize 2015, one of the largest annual events for Latino trendsetters and newsmakers in social media, journalism, advertising, PR, film, music and innovation, with hands-on activities from COVERGIRL, Crest 3D White, Gain, Olay, Pampers and Pantene. Additionally, a select group of Latinas were treated to a photo session by renowned celebrity photographer, Omar Cruz, for beautiful headshots to keep their social media profiles looking fabulous.
- Curation of beauty "how to" tutorials, with leading Latina social influencers, which provide the Orgullosa community with makeup and skincare tips via YouTube.com/Orgullosa.
- Partnership with Latina Mom Bloggers (now DiMe Media) to host Orgullosa's first Instagram sweepstakes rewarding Nueva Latinas with an array of great prizes for participating in a photo challenge using #LivingFabulosa. To learn more about Orgullosa's Living Fabulosa program or to be part of the community, customers can visit the Orgullosa Facebook page or register at Orgullosa.com. Follow the conversation on social media with #LivingFabulosa.
Orgullosa is a P&G-owned program that celebrates Latinas and empowers them to feel confident about their personal appearance, style and homes by offering solutions that satisfy their beauty and household needs through a variety of trusted brands.
Amazon expands 1-hour delivery to Dallas
Amazon is accelerating the expansion of its one-hour delivery servcie with a rollout of the program in Dallas.
The e-commerce giant started its Prime Now rapid delivery service in December in parts of Manhattan, andexpanded to Baltimore and Miami this month.
The ultra-fast service initially launched as a benefit for Prime members.
“Customers in Manhattan and Brooklyn love Prime Now — it means you can skip a trip to the store and get the items you need delivered right to your door in under an hour,” said Dave Clark, Amazon’s SVP worldwide operations. “Since launching, we’ve seen high demand on everything from essentials like water and paper towels to more surprising deliveries like getting a customer a hard-to-find, top-selling toy in 23 minutes — we are excited to continue delivering to customers in record-breaking time.”
All Prime members can download the Prime Now app, available on iOS and Android devices, and be notified when the service is available in their local area. In Miami and Baltimore, Prime Now is available from 8 a.m. to 10 p.m., seven days a week. Two-hour delivery is free and one-hour delivery is available in select zip codes for $7.99.