Loyalty and the Consumer Experience

This is Part 2 of a 2-part series. Part 1, “Five Assumptions That Will Doom Your Loyalty Program,” can be found here.

Corporate loyalty programs are designed to drive consumers to spend additional funds and to encourage consumers to be loyal enough to their brand that they are willing to “make the left turn” to shop with their favorite brands.

All too often, organizations design operational or payment processes around loyalty programs without putting as much thought into the overall customer experience of interacting with the loyalty program and the brand as a whole. Too often, I see loyalty programs in the marketplace that seem to have a nearsighted focus on launching a program; everyone who works in this space should remember that they are also consumers!  Our own behavior and experiences in the marketplace can offer tremendous insights.

Pharma Loyalty Gone Awry

I was recently shopping at a large, national pharmacy chain whose loyalty program I had joined several years ago, and was prompted to scan my rewards keychain or enter my phone number to access my rewards account. Upon enrolling many years ago,  in a prior life before consulting in the loyalty space, I didn’t understand the details of the program– how I  would accrue rewards, how I  would redeem points, etc. I still dutifully provide the cashier my rewards keychain tag or enter my phone number on the pin pad every time I shop there.

On this particular trip, the cashier asked me, “Would you like to redeem x amount of reward points for $5 off this purchase?”

I replied excitedly, “Of course!”

“Excellent, all you need to do is enter the zip code associated with your profile on the pinpad.”

As someone who uses myriad potential zip codes when signing up for loyalty programs (house where I grew up, work, various apartments, random 5 digit numbers), I knew this was not going to be something that I would readily punch in to happily redeem my reward; after three unsuccessful tries, the cashier interrupted my further attempts.

“You’ll need to update your zip code to use the rewards.  There’s a 1-800 number on the bottom of your receipt you can call to make this happen.”

This is where things get clunky; as you can imagine, I  never called that 1-800 number to update my zip code.  In this instance, my sole driver would be the potential for $5 off of a purchase.  The pharmacy chain has hit the trifecta of consumer failure with their loyalty program, as there was no clear indication to me of how using the loyalty program benefitted me as a member:

1) I didn’t understand how I earn rewards

2) I didn’t understand how to redeem the rewards

3) I didn’t care enough about the program even once I had palpable rewards to make a phone call to actually redeem them, therefore offering me no incentive to shop more with this brand

This type of experience is not encouraging any left turns or additional spend at their stores; the communication of the program, its benefits, and overall process for use don’t seem to have been designed with the consumer in mind.

You like the mobile app?  Try this punch card!

My second experience involved a brand that has an extremely popular mobile app that seamlessly combines payment and loyalty for the purchase of coffee, food, and other drinks.  With nearly 20mm monthly active users, this brand has put a lot of thought into consumer experience.

On a recent trip, the mobile transaction process was operating as usual; I had ordered my coffee, scanned the in-app QR code to pay, and received the appropriate amount of rewards for my purchase.

At this point, the employee reached out to me with a small card in hand and said, “Here’s a punch card for a free breakfast sandwich- four more drinks and you get the free sandwich.”

I must have had a look on my face of complete astonishment— as a person who had just conducted a 100% mobile transaction, I had been offered a small card to carry around for the next who knows how many weeks.  They then added, “It’s really simple and the sandwiches are great!”

I quickly retorted, “Can I do the punch card through the app?”

“No,” the barista replied, “it’s only through this physical punch card.”

This consumer experience for a company that is at the forefront of mobile loyalty was mind-boggling.  Why would anyone who participates solely through mobile want to carry around a punch card?  With 20mm monthly active mobile app users and undoubtedly a mountain of supporting customer data, the brand should recognize that the desire for their consumers to carry a punch card is likely very low.

Get it right, every time

These stories illustrate that there are many ways to get it wrong when thinking through the entirety of the consumer experience when it comes to loyalty.  This holds true whether you are initially designing a program or are already a leader in the space; the consumer experience and its ease of use will persist from the pilot design of your loyalty program through the nth feature rollout if your organization is really looking to drive engagement through the program.

At the end of the day, we are all consumers, and as programs are designed, we need to avoid a one-sided vision and think through what it would be like to interact with the loyalty program.  If anything is amiss in the initial design or future feature roll out, change it!  Make it consumer-friendly, and watch as your program drives new and additional revenue.

Designing a loyalty program that is both operationally sound and thoughtful to the consumer experience is not a herculean task.  These programs should operate flawlessly from the technical aspect, and should clearly and simply explain the benefits and program usage to the consumer.  At the same time these programs must avoid clunky operational interfaces and processes, and must not leave consumers clueless to the benefits received or dumbfounded at being offered something as simple as a punch card.

This is part 2 of a 2 part series on loyalty. Part 1 can be found here. Part 2 was written by Tim, who can be contacted at tradway@wcapra.com.


Spotlight on Loyalty: Part II of II