The future of loyalty will not be like the past, experts say

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By: Wise Marketer Staff |

Posted on August 3, 2004

The future of loyalty will not be like the past, experts say

Templeton College's second annual loyalty marketing workshop at Oxford University was held on campus last week. After the workshop, one thing at least seems certain: the future of customer loyalty will not be like the past.

The annual workshop on loyalty marketing is organised by Templeton College, part of Oxford University, in association with US-based loyalty publication and consultancy, COLLOQUY, and UK-based loyalty consultancy CM4P. Participant numbers are purposely limited, to allow useful interaction and networking.

This year's format was a structured mix of informed discussion and case histories that were inter-actively reviewed and analysed by the group, led by Dr Richard Cuthbertson, a Senior Research Associate of the College. Delegates came from a broad commercial background: senior managers from retailing, financial services, travel, direct marketing and consulting services; from countries as diverse as the UK, Europe (especially Central Europe), Russia, South Africa, New Zealand and the USA.

Main threads Some main threads running through the workshop were the importance of implementing a strategic approach to customer loyalty; the importance of having a firm grasp of the financial issues relating to loyalty programmes; the growing complexity of the operational side of implementing loyalty programmes and the need for better segmentation techniques.

Loyalty programme managers now understand their customers in ever more detail, but their customers are also demanding ever more relevance of the brand message to their life stage interests. Anything that seems impersonal or poorly targeted gets 'punished' both directly by the consumer and by viral backlash from the consumer.

The overall thread that ran through the workshop was that strategy and finance are crucial elements of the programme design whatever the maturity of the market. It also left the group with the overriding impression that the future will not be like the past; today's 'turbo charged' consumers will accelerate the development of trends.

Case studies The presenters of the case studies were gratifyingly frank and open about their programmes, which covered a broad spectrum from a large scale coalition to a niche privilege club including The Tartan Privilege programme (aimed mainly at expatriate Scots), The Czech Republic's Renome programme (a fashion-centric coalition programme based on the Bata Klub), the French Mouvango Club for business travellers, and the UK-based Connextion programme (a joint venture between the government and the private sector, aimed at encouraging a tight cohort of 16-19 year olds to complete further education courses).

Richard Campbell, from the UK's Nectar programme, gave a keynote case study on how the original Air Miles founders reinvigorated the mature UK consumer market and encouraged their members and sponsor partners to feel better about loyalty programmes generally.

Mike Capizzi, Colloquy's executive editor, shared insights into the analytical approach to making better marketing decisions based on understanding and segmenting customer loyalty data. He showed how loyalty programmes should be designed to allocate resources to encourage the kind of consumer behaviours that deliver improved financial performance. He also reminded the workshop that a strategy to exit the loyalty scheme is best planned and decided before the programme goes live.

Lisa Modisette of InfoInsight, author of The Mobile Customer Experience 2003-2007, highlighted the growth in the importance of the mobile telephone media channel for future communications within loyalty programmes.

Dr Jonathan Reynolds, Senior Research Fellow in Retailing from Templeton College, outlined the future developments in consumer markets and mindsets that are resulting in greater price transparency, smarter consumers generally, and a resultant trend toward 'industrialised customer intimacy'.

Interesting sound bites:

  • The launch of Nectar triggered a full 1% growth in BP's market share. Fifty percent of UK households have been penetrated by the scheme.  
  • The Connextions card has now achieved a membership of over 400,000 16-19 year olds in further education, and has established a presence in over 1500 learning centres in England.  
  • Membership does not equal loyalty.  
  • Consumers are making fewer shopping trips, spending more per visit, more willing to travel, experiencing a more competitive selling environment, having more information at their disposal, and exhibiting less supplier loyalty.  
  • The critical success factor for a loyalty programme is the rapid post launch progression from non-targeted marketing to targeted marketing.  
  • It has all become too complicated and there's too much choice, too little time.  
  • Technology keeps delivering the future faster than it did in the past.  
  • Wal-Mart and the US Defence industry have mandated RFID for all their suppliers within the next 5 years. (For more details, see The Wise Marketer's sister publication Using RFID at  
  • Identify, maintain and increase the yield from the best customers.  
  • Always plan change two steps ahead.  
  • The faith in money as the language of business undermines confidence in an activity which cannot be measured wholly in those terms.  
  • Soft benefits: how much is that free flight actually costing?  
  • Consumers in the UK perfectly understand what is going on here and, providing we use the information with a good deal of integrity, they are willing to play the game.

For additional information: ·  Visit CM4P at ·  Visit Templeton at ·  Visit COLLOQUY at