Many Brands See Equity Sharing Benefits, But Not All Customers Do
We’ve all been there. A message notification pops up on your phone; you eagerly open your email, and voilà — you’ve just earned a free meal from your favorite delivery service. It’s the surprise of the week. You tap a link, open an app, and within seconds, your reward is zooming straight to your doorstep. And similar to whatever morsel of irresistible decadence captured the gravity of your attention after a hard day of work, the whole redemption process is a piece of cake. You can track its progress, get support, engage with the brand in any way you like... all within the confines of a familiar platform that you know and trust.
Customers love rewards that are valuable. But they also love rewards that are easy. Rewards that are easy mirror the impetus of the behavior that earned them in the first place. Customers simply aren’t attracted to convoluted paths-to-purchase or barriers to accessing your brand. So why muddy a sound, strategic, tactical loyalty model with a reward that takes the steam out of all the positive energy that was built before it?
This can be the problem with stock ownership as a loyalty reward. Now, the format in its raw conceptual nature makes a lot of sense. Companies such as North Face, Lowe’s, eBay, Lululemon, and many other recognizable brands are rewarding their customers up to 8% of their purchases with fractional shares of stock. And a survey of over a thousand consumers referenced in Chief Marketer Magazine revealed 66% of respondents believe stock ownership increased the likelihood of buying the offering company’s products.
Customers today don’t just want to be a passive bystander in a churning sea of commerce that washes obliviously past them. They crave active participation — to be a part of social and economic change. Stock ownership rewards handily accomplish this burgeoning instinct. But more than anything, customers want to realize the benefits of their engagements. Stock ownership as a loyalty reward is a relatively new concept, so perhaps some of the trailblazers may be excused for a few systemic imperfections. But there are a few ways stock rewards can be done better:
1) Integrate The System
The method of implementation for stock ownership reward tactics currently rely on third party apps and websites, directing users away from in-house branded platforms to external interfaces. For example, North Face, Lowe’s, eBay, Lululemon leverage the financial technology startup Upstreet, an app that has established a 4 step process for interacting with brands once a credit card has been linked to its system. There are plenty of these companies circulating. Bumped is a similar app, which has been around for more than two years and offers fractional shares of stock from major brands like GAP, Home Depot, Apple, McDonald’s and hundreds more. What is much rarer is having the financial experience built directly into the brand’s loyalty platform itself, offering the ability for customers to track their stock gains in the comfort of a familiar experience. The first stock ownership rewards programs to construct an organic monitoring component in this fashion will outshine the others in terms of simplifying the overall customer experience.
2) Enrich The Experience
Apart from the most linear-thinking, right-brained folk amongst us, most would agree: stocks aren’t exactly the most glamorous act in the circus. Aside from watching the ticker flick by, there isn’t that much to do in terms of participatory, meaningful interactions. But interacting with a loyalty program couldn’t be more different than monitoring a financial portfolio. Marketers must remember that loyalty needs to engage, excite, and inspire. So, what else can brands do to enrich the stock rewards experience? How about extra surprise and delight bonuses if the brand’s equity performs well? Or gamifying the experience by implementing virtual leaderboards tracking top-earners? There is a litany of proven tactical toolboxes to embellish a potentially drab experience and invigorate customers’ attitudes towards this novel concept.
3) Offer Alternatives to Stock Ownership Rewards
There is an undeniable trend in loyalty programs to make a new feature the spotlight of attention. Marketing communications and PR typically center around these launches, and websites, apps, and internal messaging encourage participation — sometimes at the expense of legacy features. But the truth is, stock rewards simply won’t be attractive to everyone. And while it’s important to shine a light on exciting new developments within a program, it’s likewise important to realize that even within a perfectly aligned stock rewards strategy, there will be a large subset of customers who will want an alternative reward scheme of equal value.
Make sure that the core values of a program don’t fall by the wayside, and realize that while stock rewards might be an interesting facet of merit to compel membership rationale, it is unlikely the strategy will be the primary driver for most consumer brands. Because at the end of the day, a free chocolate chip cookie may mean much more to some than increasing the value of their Lululemon holdings by $2.