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2018 Loyalty Marketing Year in Review – Part 1

2018 was a newsworthy year in customer engagement and loyalty marketing.

Even though we live with this industry daily, there is often so much change during a year that it’s easy to forget which news mattered most. We took some time to review everything we covered throughout the year and identified 4 big topics for your consumption as we transition from 2018 into the new year. We’ll cover the first 2 topics in today’s post and publish the next 2 next week.

1. The Biggest News in Customer Engagement and Loyalty from 2018

The biggest headlines in the customer loyalty industry were captured by some big brands and by a handful of regulators. Speculation about how and when the alignment of Marriott Rewards, Starwood Preferred Guest and Ritz Carlton Rewards would occur began early in the year. The programs were formally merged in August 2018 and the rumor mill now grinds over the name of the newly combined program. Marriott Bonvoy is one name being floated and we expect to have a definitive announcement early in 2019.

Whole Foods gave up its own loyalty program in lieu of becoming another benefit of Amazon Prime. The move made perfect sense and we only hope that the value of shopping in Whole Foods becomes more tangible for Prime members in 2019. Our sources returned initial feedback that Prime offers in Whole Foods were limited by products and offered minimal rebates.

Facebook hinted early in the year that it might use its AI capabilities as a foundation for a customer loyalty program, but not much more was heard since the initial announcement. Given the series of data-related controversies faced by the company during 2018, it is difficult to predict when Facebook might return its attention to customer loyalty in 2019.

Aeroplan and Air Canada stole most of the headlines during the summer as the prospect of a new Air Canada frequent flyer program was weighed against a continuing relationship with Aeroplan. The Wise Marketer offered insights as the debate swirled. Meanwhile, Air Canada kept its frequent travelers top-of-mind, offering reassurance on its web site that “Air Canada’s agreement with Aimia for Aeroplan remains in place until June 29, 2020.  Air Canada is committed to Aeroplan as its frequent flyer program through this date”. In November, that commitment was made firm when Air Canada announced that it was purchasing the Aeroplan program from Aimia for an announced sum of $450 million in cash.

In just the past few months, news of Uber’s intention to launch a customer loyalty program became a reality and now consumers wait for Lyft to respond with its own program. If there was ever a reason to re-imagine a path to create higher customer engagement and loyalty in order to command market share, the Uber vs. Lyft competition is a battle to watch. The ride-share experience is largely undifferentiated for consumers.

How will each of these companies assert its individual brand and set itself apart from its principal (only) competitor? 2019 will surely give us more answers, but it will be too soon to declare a clear winner in this competition.

Regulators were not to be outshined entirely by the private sector for news in 2018. In May 2018, the new regulations concerning data protection, known the General Data Protection Regulation (GDPR), became effective in the United States. Consumers were awakened to this new regulation by the stream of web-site updates and invitations to “opt-in” again from every e-commerce player, publisher and anyone (isn’t that everyone) who collects, stores, and manages customer data.

While the dust is still settling on adoption of these new regulations, the true impact of these consumer protection laws is not clear. Yes, corporate America understands the nature and potential for financial penalties through breaches of GDPR, but how the finer points of the law will play out in terms of enforcement and brand impact will only be known as time goes by.

2019 could be the year when the first penalties are issued, and you can be sure that high profile litigation will ensue before cases are settled and money changes hands.

The management of the customer data collected by the industry is vital to the future of customer engagement and loyalty. Now is an ideal time to think about how you can manage this issue proactively, not just for your company alone but through participation in setting up industry standards.

The Wise Marketer is leading an initiative to create such an industry standard and you can inquire here if you would like to participate.

2. Cannabis becomes a smokin’ hot topic (and will be a growth market for loyalty marketers in 2019)

The growth and acceptance of Cannabis retailers as merchants who can stand alongside any other retailer has been a smokin’ hot topic throughout 2018. For publications eager to generate traffic through cheap jokes like that one, click-bait headlines have made much of the conversation about Cannabis retailers more sizzle than steak. Not so at The Wise Marketer.

Early in the year, Mike Capizzi, Dean of the Loyalty Academy, wrote about a technology partnership between springbig and MJ Freeway that would enable seamless and cost-effective presentation of customer loyalty programs for retailers. Mike served up the steak when he said there were two reasons this loyalty news story caught our eye and neither of them has anything to do with marijuana. Those two reasons are explained in Mike’s article and are instructive to any retailer hoping to create more elegant customer engagement and loyalty offers.

There was encouraging news from Canada for Cannabis marketers when recreational consumption of marijuana was legalized on October 17. Despite the buzz over this announcement, the law came with multiple restrictions on the branding, packaging, and advertising of Cannabis products. These restrictions will cause retailers to seek to build customer patronage based on customer-level interactions. US retailers have an even greater challenge marketing Cannabis products as long as the substance remains on Schedule 1 of the Controlled Substances Act.

There were many other announcements about technology solutions and marketing support tools designed to enable healthy dispensary operation, many of which you can read in The Wise marketer. The big takeaway from these discussions is that Cannabis retailers share the same concerns as familiar brands in the mall and must continually focus on efficient methods to engage and delight customers.

The buzz over Cannabis does not relieve it of the need to engage a structured approach to customer marketing. In fact, the legal restrictions on social and mass marketing accentuate the importance of creating sustainable relationships with customers at the store level.

The Cannabis retail market is clearly a growth market for loyalty marketers and will become less the butt of cheap jokes and more mainstream as opportunities during 2019.

Bill Hanifin is CEO of The Wise Marketer and is a Certified Loyalty Marketing Professional (CLMP).

2018 Loyalty Marketing Year in Review – Part 1
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