Last week Upgrade Pack was very kindly asked to join one of the speaker panels at The Drum’s Future of Marketing event to discuss the future of retail and, specifically, the impact of loyalty on retail. All of us on the panel seemed to share a fairly similar view of how loyalty impacts retail and retail brands and I wanted to share a couple of the key points:
Creating personal and emotional connections
Loyalty is an essential ingredient for any brand, and it should be focused on creating a personal and emotional connection with customers. The connection achieved will be unique for each brand and, in some instances will be different for each customer. That emotional connection can range from anything - from indifference (not good) through to surprise, joy, pride (or envy if customers can’t attain something their friends can). It can come in many forms, but a positive emotional connection is crucial.
I’m a bit of a fan of Louis Theroux and recently happened across one of his documentary pieces I hadn’t seen before, which looked at the way a Las Vegas hotel treated it’s ‘high rollers’. As you can imagine the hotels ‘rolled out’ the proverbial red carpet for some of these clients and the majority of benefits they offered had nothing to do with their core offering of gambling, but everything they offered their clients was, in financial terms, coldly calculated based on the value of the client to their business. The [loyalty] services they offered were entirely driven by their clients’ individual needs and their clients’ response was overwhelmingly an emotional one. All of them, when asked about their spending, stated that they were going to gamble their money whatever happened, but they spent their money in that particular hotel because of the way the hotel made them feel. The emotional connection.
Gambling in Vegas is an extreme example, but it’s not as if brands don’t hold the ability to better understand their customers. Brands have the ability to gather data in a responsible transparent way, as well as the ability to demonstrate the relevance and value of that data to customers by providing them with loyalty-based experiences that they desire and will value, creating more personal and emotional connections in the process.
We are currently seeing the closing, updating or transforming of loyalty programs, because these schemes don’t create those personal and emotional connections - too often focused on the transactional. Is a customer going to feel excited about the offer of a ‘free coffee’, the same offer they can get from a number of other brands? Are they going to feel special with the offer of a 10% discount from a partner brand when they see that brand offering 30%+ discounts on Black Friday? Can a customer be bothered to undertake the degree levels maths required to understand how they earn from a loyalty scheme?
We started Upgrade Pack because we realised an opportunity to create a loyalty mechanic that was unique and would get consumers excited, then by working with a limited number of clients, we can ensure that their customers do feel ‘special’, can attain experiences that are sharable and create that all- important emotional attachment. .
It’s an exciting time for brand loyalty and loyalty services and, I hope, it should be a rewarding time to be a consumer!