Convenient Loyalty vs Thoughtful Loyalty: One Woman’s Quest To Unlock Deeper Value for Her Clients

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By: Wise Marketer Staff |

Posted on March 21, 2022

Two schools of loyalty

When I was a teenager, I would get two kinds of gifts from my elders. The first kind was money. It gave me a temporary high. The second kind recognized facets of me as an individual. My joys. My dreams. These gifts included things like a library card or a signed poster of a beloved tennis star. It should come as no surprise that these ‘thoughtful’ gifts, as opposed to the other ‘convenient’ gifts, truly touched my heart and deepened my bond with the giver.

By: Saira Mehdi, CLMP™, Epsilon

The world of loyalty marketing works on the same psychology. Traditional loyalty programs that offer just points and cashbacks create ‘convenient’ loyalty; it’s reward-centric and vulnerable to competition. On the other hand, ‘Thoughtful Loyalty’ programs tap into customers’ unique preferences and purchases, offering curated journeys and personalized rewards. This creates long-term relationships.

In my role as Epsilon Sales Lead for the Middle East region, I’ve always been passionate about a truly consumer-centric approach to loyalty. So, when I got the chance to raise my loyalty game with CLMP, I was very excited about what it could mean for my work and the nuanced, new outcomes I could deliver for my clients. 

I was also pleasantly surprised at how natural the experience felt. Because, I’m proud to say that Epsilon’s approach to loyalty is just like the Loyalty Academy’s approach. Insightful. Empathetic. Well-rounded. We both believe that loyalty is not about making transactions. It is about building bonds.

I strongly feel that more than any other time in marketing history, now is when marketers need to think about building bonds. This means evolving from convenient ‘earn and burn’ loyalty programs to ‘Thoughtful Loyalty’ programs where we create personalized, meaningful moments that connect with customers on a human level.

Marketers, it’s time to rethink loyalty

Firstly: The brave new digital world is radically reshaping the loyalty question. According to Marketing Metrics, customer acquisition costs have increased by almost 50% in the past five years. Now, this doesn’t mean we shouldn’t pursue new users. But nurturing relationships with existing customers who already know your brand and are more receptive to repeat purchases at a lower cost to serve — that’s extremely lucrative. According to PR Newswire, happy customers have 306% higher lifetime value. And they won’t just buy your brand again; they also form an emotional connection and influence friends and family to purchase. This creates valuable financial and psychological equity for marketers.

Secondly: Demographics.

The marketplace is getting younger and more demanding. It’s important to note where you live to get more context. For example, the Gulf Cooperation Council States where I live has an average age of 27, as per a report by the Middle East Journal of Age and Ageing Volume. That’s your archetypal millennial. And the plot twist is they are indifferent to traditional loyalty programs. 100 points or 2 dollars in cashback will not impress them. They are informed. They spend at least five hours a day on their smartphones, according to research by B2X and have a big comfort zone when it comes to using apps, as per Forbes. And they are open to experimentation. According to Business Wire, 50% of millennials and Gen Z have switched to a new brand based on an influencer’s decision. Crafting loyalty in this world happens only with emotional connections that are underpinned by insightful, relevant and generous offerings. Is it at all possible? Yes. It takes data. It takes shifting from handling user transactions to studying user journeys to increase personalization and growth. It takes a sound tech partner. And it takes leadership that’s curious, empathetic and positive. At Epsilon we have driven many successful loyalty programs this way.

Take the case of what we did for Preferred Hotels & Resorts. They wanted a loyalty solution that could intuitively bind 750 diverse, independent hotels and resorts while delivering the flexibility and experience their luxury customers have come to expect. The Epsilon PeopleCloud Loyalty Solution helped the brand create personalized conversations with members and opportunities for future growth. It also improved efficiency by 50% in such areas as trend analysis, updating heat maps, member data pulls, dynamic content, and triggered emails.

Lastly: Loyalty is a complex world.

Strategy, data, technology, member experience, partnerships, ease of redemption, financing, deployment — it can get overwhelming. As just one more item on the marketer’s gigantic job list, it won’t deliver exceptional outcomes. It needs vision, technology, process.

How CLMP raised my loyalty game

CLMP provided me profound insight into the parameters and challenges of a loyalty program as seen from the point of view of customers. It also gave me an end-to-end perspective on loyalty that included topics like:

  1. Principles of modern, ‘Thoughtful Loyalty’
  2. The importance of knowing your loyalty goal
  3. Crafting a sound loyalty strategy
  4. Latest, industry best practices
  5. Modern technologies and financing

Most of all, it was a deeply empowering experience! Just like Epsilon, the Loyalty Academy is a close-knit community of passionate professionals, all united in their mission to strengthen loyalty marketing. I met so many like-minded people, all determined to offer the most insightful, relevant experiences to customers by creating endless moments of meaning. It is a great feeling when you’re standing on the shoulders of practitioners who are as user-centric as you are, when you know you’re gearing up to go where you and your clients have not gone before.

Acing the program was easy, thanks to Epsilon!

I’m proud to say I aced the certification and it was due to two main reasons. Firstly, the way the course is delivered makes it very easy to understand the concepts. It covers not only the challenges one may face when designing modern loyalty programs but also offers different ways of addressing those challenges and finding meaningful outcomes.

Secondly, working at Epsilon has attuned me to think win-win. In all our loyalty projects, we try to maximize both member experience and share of wallet. Ultimately, the economics needs to work both ways. Applying that lens enabled me to be a top scorer in CLMP. I’ve always enjoyed being a practitioner in the science of creating loyalty. Getting this top score validated the joy and the inclination to be radically consumer-centric on behalf of all the clients I engage with.

Three days for me, one giant leap for loyalty going forward

I have an even clearer picture in my mind now about 1) the expectations that users have, 2) the various challenges that brands face, and 3) the practices and technologies involved. That empowers me to approach things in a streamlined way. My first question to a client is now going to be, “What is the goal of your loyalty program?” I think it’s crucial to get that right first. Then I plan to use the learnings of the session to help brands see the advantages of ‘Thoughtful Loyalty’ programs that deliver not just transactions that generate points but experiences that build lifelong bonds and memories.

Finally, I am going to add more rigor to my implementation in terms of process, member experience, tech and finances — and really run a tighter, more robust ship for my clients. In the end, I see it as a giant leap forward in our ongoing journey of viewing loyalty not as a program but as an outcome.

Another day in loyalty wonderland with Epsilon

Crafting ‘Thoughtful Loyalty’ programs that go beyond run-of-the-mill loyalty programs is a new and dynamic space. It requires and repays a marketing mindset shift. But I am very confident about Epsilon’s global commitment in this area. We’ve been delivering outcome-based loyalty programs for 50 years. Personalization at scale is a reality for us. Recently, we were named a ‘Leader’ in The Forrester Wave, Loyalty Solutions, Q2, 2021. 

That, along with the training I just received give me two valuable things: The confidence to make bold commitments to clients based on what their consumers truly value and need. And the capability to fulfil those commitments. The best part is I’m not the only one.

There is a whole global cohort of loyalty marketing enthusiasts like me. We’re all excited about redefining the loyalty lexicon from ‘convenient’ to ‘thoughtful’. I look forward to us learning from each other and cross-referencing each other and creating a vast, growing body of loyalty marketing expertise that would help CMOs around the world find their holy grail: the ability to turn transactions into relationships, and customers into loyal, lifelong fans.

Saira Mehdi is Sales Director at Epsilon and a Certified Loyalty Marketing Professional™.