COVID-19 Will Change the Concept of Loyalty

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By: Wise Marketer Staff |

Posted on April 7, 2020

The horrifying realities of the pandemic spreading across the country and around the globe have already changed our lives.

  • On March 30th, two-thirds of Americans were under stay-at-home orders. That’s over 225 million people told by their governors and mayors to only leave their homes for groceries and supplies. 
  • 3.3 million Americans filed a new unemployment claim the week ending March 21st. That more than quadruples the highest new claims week ever seen historically.
  • Restaurants across the nation are either closed or only open for carry out orders which according to the National Restaurant Association could cost up to $225 million in sales and over seven million jobs.

These are shocking numbers. They will have a lasting effect on each of us. Even if this disease were to fizzle quickly, the impact of what is happening today and in the coming weeks will linger in our collective memory for years to come.

By: Ric Neeley

How will this pandemic impact the loyalty business?

We talked with Mladen Vladic, General Manager of the Loyalty Division at FIS, to get some insights. FIS is the world’s largest provider of retail payments and banking technologies. Mladen’s expertise in banking and retail loyalty combined with his front-line experience managing practically every aspect of FIS’ loyalty operations over the past 15 years offers a unique perspective on an evolving industry. But now Mladen isn’t thinking about evolutionary changes, he’s looking at the revolutionary changes the coronavirus will force brands to make.

“These are scary times both personally and professionally for all of us,” said Mladen as he began talking about the pandemic. “But these moments will stay with you. Some 320 million people now have the coronavirus as a memorable moment. And it will re-shape the way we think about necessities versus nice-to-haves. We will question whether we had become a little too comfortable. And perhaps make us more realistic about our needs. After this, the concept of loyalty engagement will look radically different.”

Over the years, Mladen explained, the loyalty industry has trained the consumer to think of brand loyalty as being about experience and convenience. Loyalty was measured by the customer in terms of what they could get and experience in real time. It was about experiential rewards and living in the moment. But everything was becoming a commodity. To highlight this, Mladen reminded us of study after study asking people to tell us about their experience with a loyalty order placed in the last 18 months.

“We have all done these studies and consistently see the same type of results. About 30% of customers are very loyal and remember details about their order and their experience with the award. But 70% asked what order?”

These moments will define a brand for years to come

He went on to say that in crisis lies opportunities. The biggest opportunity for brands in this crisis is to shift from transactional experiences to deeper and more meaningful relationships. But how?

“Now is the time for brands to discuss how to become more relevant to their customers,” continued Mladen. “How brands respond to their consumers right now will determine if you have a customer for life.”

As an example, he cited Ford’s swift and dramatic shift from manufacturing cars to re-tooling for medical supplies. He called it a smart and wise move with the dealers not selling cars right now to make a change to help society. Americans will recognize when Ford started producing medical masks and forever connect them as a brand that stepped up in a time of crisis.

But let’s face it, a financial services company like FIS can’t suddenly start making ventilators. So, what can they do to help in this time of crisis?

Mladen suggests first looking at things through the eyes of the consumer and see how to become more relevant to them in their new world.

Loyalty marketers must adapt

Stay-at-home orders are changing the lives of millions. People who only a few short weeks ago were in an office with colleagues are now working remotely from home. Regular health club workouts are cancelled as are dinner and a movie with friends. Loyalty marketers may need to rethink much of their previous focus to deal with these new norms.

  • Gasoline discounts become unimportant if people are not driving much. If you were focusing efforts on promoting gas awards as an engagement approach, consider shifting your emphasis to a more home-based engagement.
  • Health and wellness are top-of-mind for customers right now. Take stock of the assets you have in this area and how you are promoting them. 
  • Home-based entertainment or online tools for staying connected can be a huge relief in a world requiring people to shelter-in-place.
  • And if you haven’t already done it, reschedule any promotions highlighting travel, tickets, or events.

School closings are creating a new kind of stress at home. As a Floridian, Mladen shared the challenge of entertaining his children at home when a hurricane closed the schools for three days. 

“Now,” he says, “the virus has forced me and millions of parents into the leading role in educating our children. I thought it was hard entertaining them for a few days while they were out of school.  Suddenly, I’m asking how to prepare my daughter to go into third grade in the fall if the school year is over now.”

Think outside the box

He’s not alone and you should be looking at how your tools and loyalty currency can help. Do you have any learning components to leverage right now? Are there home-schooling subscription services or learning modules you could add to your platform quickly? What resources and experts could you offer to help parents adapt and make your platform and structures more relevant?

Finally, let’s not forget loyalty points are an alternative currency. Re-educating customers to think of those points as a currency could encourage them to use points for charitable giving or even for dealing with loss of employment. While any loyalty marketer would tell you to make sure awards are memorable, perhaps allowing a customer who just lost their job due to an invisible enemy to redeem points for statement credits to buy groceries during the pandemic is the most memorable thing you could offer.

Ric Neeley is a Director of Marketing for Hinda Loyalty Group, a US-based loyalty solutions provider that helps engage, inspire, and reward the people most important to your business.