Long-running coalition loyalty progammes such as Nectar in the United Kingdom and Air Miles in Canada were born in the age of direct mail and paper vouchers and now find themselves facing pressure to transform themselves into 21st Century digital- and mobile-first programmes. UK's Campaign magazine has an interesting if too-brief look detailing Nectar's own transition into the digital age.
As the article points out, Nectar has faced numerous challenges coming on the heels of the programme's tenth anniversary. Facing blistering challenges from low-cost rivals, Nectar anchor partner Sainsbury's halved the number of Nectar points its customers could earn, resulting in a 4.5% drop in the number of Nectar points issued last year.
In addition, the programme itself faces pressure to modernise rapidly, adding value to the member experience via increased offer relevance and mobile-first engagement. Nectar managing director Will Shuckburgh has led this march to modernization, launching a new mobile app and increasing the number of offers sent to members from 30 to 150 per year. Central to Nectar's reinvention is its use of artificial intelligence (AI) to increase offer relevance. Money quote from Shuckburgh:
"Relevance is central. The whole [Nectar mobile] app is based on machine learning and the offer stream - the more it knows what you want, the more we can make sure [the customer] gets more relevant offers. I think everyone's at the early stages of thinking how best to use [machine learning]. But I do think in marketing generally that AI will play a really big role in making marketing more relevant and helping listen to customers. AI can really allow brands to listen to customers and respond to that."
The article also reveals Nectar's plans to embark on a full-scale marketing blitz over the next 12 months. Count us excited to see how the programme continues to evolve.
Read the Campaign article here.