Loyalty Magazine JUNE 2015
Should I stay... or should I go? Financial loyalty report
THE LOYALTY AWARDS 2015 TRENDING: WINNERS LATEST LOYALTY NEWS EDITION FREQUENT FLYER PROGRAMMES: including the business case Personality of the Year
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Contents FINANCIAL LOYALTY REPORT
To subscribe to Loyalty Magazine: 5 Comment 10-13 FINANCIAL LOYALTY Go to www.loyaltymagazine.com and hit subscribe. Alternatively, call • How retailers are annoying • Loyalty still key to the payments subscriptions: +44 (0)1572 820088 or their customers equation as banks reinvent the concept email: [email protected] • Data from the Collinson Group • Retail Banking Report 2015 from Loyalty Magazine is published by 6-9 Trending Capgemini C&M Publications, 3a Market Place, Uppingham, Rutland LE15 9QH, UK • Wyndham relaunch • Amex and Santander take positions Tel: +44 (0)1572 820088 • Czech bank goes beyond purchases • Merchant Funded Rewards • Costco leaves Amex • Aggregating for a personal approach Editor Annich McIntosh • Pret takes fresh approach to loyalty • Try something new! email: [email protected] • Samsung most meaningful Production editor Liam McLoughlin • O2 buys out wallet partners 15-43 THE LOYALTY AWARDS email: [email protected] • Customer control of data • THE WINNERS • FIs come tops in NPS Advertising and subscription • Amazon Prime most satisfying enquiries: Maxine Wernick 44-47 THE LOYALTY AWARDS email: [email protected] • Nectar points cut Tel: +44 (0)1572 820088 • Connected customers want mobile • PERSONALITY OF THE YEAR • Ketchup loyalty survey ISSN 1354-5868 • AirAsia denial 48-49 FROM THE LOYALTY • Barclays and the volatile 48-49 CONFERENCE 2015 • FREQUENT FLYER PROGRAMMES – THE BUSINESS CASE
ine APRIL 2015 Loya Lty Magaz 1 FE ATURE
loyaltymagazine.com Redemption
: Dealing with the ReDeMPtion gement HE LoyALT y problem of disenga THE LIST: T S 2015 FINALISTS SUccESSFUL AwARd mAdE ALdI : wHAT -md Paul Foley om THE wINNERS – interview with ex ä LESSoNS FR The Loyalty Conference report OCTOBER 2014 INSIDELoyalty Magazine
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JUNE 2015 Loyalty Magazine mPOS World 2015
Frankfurt • June 30 - July 1 • Germany
The only global conference & exhibition on new generation of mPOS solutions and digital interaction in retail
Connecting 300+ payments, cash register, technology & VAS mPOS providers with merchants
Hackathon and live demos of digital in-store technologies and solutions for interactive customer experience
www.mpos-world.com
Key topics: • mPOS as a holistic platform for payments, business • mPOS disruptive technology accelerating convergence management and customer experience between online and offline • linking mPOS to NFC payments • mPOS as a multi-segment solution for micro and SME merchants • App-centric mPOS ecosystem: open API platforms • mPOS as a disruptive technology for online payment • Innovation at POS: all-in-one systems with custom processors and a challenge for offline players hardware • race to gain a share from the mPOS market • Digital technologies and solutions around mPOS enabling integrated shopping experience: Apple Pay, • mPOS shaping the future of shopping experience wearable, beacons • Security: EMV, biometrics, authentication • Beyond payments: customer engagement and loyalty • mPOS implementation strategies and worldwide perspectives • New entrants and partnerships: rearranging the mPOS world • disruptive solutions breaking the traditional geographic based acquiring model ( Zapp, Apple Pay) mPOS Hackathon • Business models of acquirers targeting micro merchants, SMEs and big retailers 5 EDITOR’S COMMENT
How retailers are
annoying their customers Complaint Our (current) list of things about supermarkets 5. Multiple buy offers. that are REALLY, REALLY INFURIATING! Three for two, four for three, buy one, get one here has been a great deal of chuntering going on in the Loyalty Magazine office free, these all pressure recently. For those unfamiliar with English colloquialisms, ‘chuntering’ is under the people to buy more Tbreath complaining about something that can’t usually be fixed. Right now the main than they need, because subject for this griping (means the same thing) is supermarkets and their annoying it is very expensive to practices. buy just one. Aldi don’t The level of complaint and the agreement from colleagues has reached such a level do this, and they have that we are sharing it with you. So here is our (current)‘Top 5’ increased their market share from 5.2% to 6.2% comparing the 12 weeks to April 2015 with the Complaint 2. previous year according to Nielsen figures. £3 off your next shop if is a percentage sales 1. you spend more than change on last year Tofhis £30. This usually has a Complaint Complaint 4. nearly 20%. Not bad four day expiry, which when you consider that Paltry, insignificant and Cheap alcohol (not is infuriating as the T insulting money off your everyone in the office esco has lost 1.8% of voucher is presented sales, Sainsbury’s has lost next shop offers. agrees with this one) after a significant shop – 0.1% of sales and Asda Between us, the Loyalty but the proposer said it £78 spent in one instance. has lost a massive 2.5% Magazine team have is a killjoy tactic because of sales. Morrisons has recently received offers of Only the very hungry it kills the pub trade, lost 0.6% and the Co-op 1p, 3p and 4p off our next would want to spend a ruins people’s social has lost 0.3%. As shop (having spent further £30 within four life, and contributes Sainsbury’s, the Co-op between £50 and £100 to days. When complaining, to alcoholism, and Tesco, The offers and Asda are all offering achieve this). staff reply “We know, we like cheap junk food, pathetic amounts off are time limited. You know, we tell them...etc”. encourages people to one’s next shop, usually have to visit the buy products that are it wouldn’t surprise not good for health. store within the next us at all if there was week to qualify. Complaint 3. a correlation. The offers come from Tesco, Sainsbury’s and Sweets and fattening the Co-Op. When goods at the entrance, complaining to staff, with special offers. the usual answer is The general view is “we know, we tell them, this is unethical, and but it doesn’t make any contributing to the difference. Everyone obesity problem. Asda complains. It is is a major culprit. ridiculous.”
Loyalty should, and can be a differentiator, but it needs fostering, regularly refreshing and it needs to mean something. Loyalty, and customers, should never be taken for granted. No-one likes to feel cheated. We will be happy to add chunterings from readers to this list, and please don’t stop with supermarkets, or just retailers in the UK. Unburden! Let us know ALL the things that annoy you. It might not change anything, but it will make you feel better.
Annich McIntosh Editor
JUNE 2015 Loyalty Magazine 6 TRENDING
Company promises new card Costco moves will give loyalty rewards
exclusively ostco has struck a new exclusive Ccredit card deal which ousts from Amex to American Express in 2016 to be replaced by a Citi Visa card. Reward points will Wyndham stages a Citi Visa remain a fundamental part of the consumer offering. US$100m scheme This is a highly sought after contract, as Costco is the second largest retailer in relaunch the US, but commentators have said that Visa paid a high price to secure it. Other Game of Thrones star becomes competitors included MasterCard with JP programme mascot Morgan Chase. Still to be decided is the level of loyalty yndham Hotel Group is investing rewards the Citi Visa Costco card will give US$100m to launch a revamped compared with its Amex predecessor. rewardsW programme with a greater focus For Amex the loss is major. Costco on digital marketing activity. represented one of every 10 of its cards in The revamped marketing campaign circulation and 8% of its spending. uses Norwegian Game of Thrones actor Kristofer Hivju as the Wyndham Rewards Wyzard whose catch phrase is “You’ve earned this”. The group, which has 12 hotel brands H H and 7,500 global locations, says its Freebies from profitable Pret new Wyndham Rewards offering is Pret takes fresh approach to loyalty being simplified and made easier to understand. EO of Pret A Manger Clive Schlee has confirmed that staff are encouraged to hand The programme is claimed to buck out a certain amount of free hot drinks and food to those customers they like or the current travel industry trend of C‘find attractive’ as an alternative way of running a loyalty programme. confusing reward categories by offering As this story came on the dayT esco has announced losses of a whopping £6.4bn it is members a “generous” points earning difficult not to compare the two contrasting approaches to loyalty. structure along with a flat, free night Pret A Manager, which has built an impressive business out of providing sandwiches redemption rate. Wyndham says its it is actually pleasant to eat has given something free to 28% of customers. Clive Schlee research among the 8.5 million active explained: “They will decide ‘I like the person on the bicycle’ or ‘I like the guy in that tie’ programme members shows that a free or ‘I fancy that girl or that boy’. It means 28% of people have had something free. night is the most desired reward. It’s a nice, different way of doing it.”
Bon @bonnienanjack MAIDAY Pret keep giving me free hot drinks and I have no idea Czech bank @IAmMaiday why but it’s brilliant. Feel like I’ve won the coffee lotto. Arrrr man in Pret gave me a free coffee for no 9:40 PM – 19 Apr 2015 launches ‘next apparent reason. Thank you man in Pret. gen’ programme 4:14 PM – 1 Apr 2015 Going beyond card purchases HOther Pret newsH zech bank CSOB (Ceskoslovenská ret A Manger is trialling evening dining obchodní banka) has launched Era at its 88 Strand, London shop. At six CWorld Rewards as a ‘next generation’ o’clockP the lights are dimmed, the candles programme that extends beyond credit lit, and a proper hot food menu offered. or debit card purchases. One comment from a diner published Instead it offers rewards for additional in Time Out was: “My only complaints are banking activities including buying new that the glasses of wine are only served in products, activating mobile banking, and 125ml and that the food was so cheap, I got participating in surveys. carried away and over-ordered and then The scheme uses the miRevenue subsequently fell asleep in the cinema. We rewards platform from Canadian spent £13 each and had A LOT of grub.” company Zafin. World take-over for Pret is on course.
Loyalty Magazine JUNE 2015 7
Samsung named Trending
most ‘meaningful’ GAME brand CHANGERS
1 > Samsung amsung is the world’s most Smeaningful brand, according to a new O2 buys out > Google study that ranks brands by their impact on 2 consumer wellbeing and perceived wider wallet partners benefit to society (full global rankings are Marketing and 3 > Nestlé listed on the left). The consumer electronics sector advertising business to dominates in the rankings from media continue “as usual” 4 > Bimbo group Havas, which found that consumers spend more money with brands that > Sony are perceived to care. The survey polled 2 is to buy out its two fellow 5 300,000 consumers in 34 countries. network operator partners in the Havas says a meaningful brand provides WeveO mobile wallet advertising/loyalty 6 > Microsoft three types of value to customers: consortium. marketplace benefits, including the value With EE and Vodafone departing, O2 delivered by its products; personal benefits, Telefonica will now be the sole owner of 7 > Nivea such as what a brand does for individual Weve which was set up in 2013. When customers; collective benefits, including its wallet platform was launched in 8 > Visa what the brand does for society as a whole. February 2014 it was intended to become Brands with the largest percentage a major player in mobile payments, but increase globally since the last analysis the plans to add NFC payments to the 9 > IKEA in 2013 are Honda, LG, ING and AXA. Top wallet (in addition to a loyalty scheme performing categories worldwide are across all three partners) in early 2015 > Intel consumer electronics, healthcare, food, were abandoned after the launch of 10 personal care and retail. Apple Pay.
Customers want control lmost three-quarters (74%) of Aconsumers are happy to share their Nearly three-quarters are happy to share data, location-based data with third parties, but most (72%) think further regulation but over-35s remain suspicious is needed to ensure the data is used responsibly. Consumers believe that companies are not taking adequate steps to ensure the responsible use of location data and that further regulation is needed to ensure its responsible usage, according to a survey of 1,000 UK mobile phone users by the Mobile Marketing Association (MMA) and mobile engagement company Brainstorm. The under-35 age group adopts a 74% more relaxed attitude than the over- Happy to share their location based data to 3rd party with certain provisos 35s towards sharing their data. Most respondents are seeking reassurances that they won’t be bombarded by adverts, or that there is a tangible social benefit like fighting crime or improvements in health care, or that there is a personal enticement such as a money-off voucher.
JUNE 2015 Loyalty Magazine 8 TRENDING
It’s all in the NP score
The country’s top ten Net Promoter Scores (across all sectors):
First Direct +73 Nectar points cut: Nationwide Building Society +43 Sainsbury’s offers Freeview (television channels) +38 deals and extra tesco Mobile (mobile phone provider) +38 fuel points Plusnet (television channels) +37 Exodus of customers LV +34 expected after points cut Hargreaves Lansdown +34
Santander credit cards +28 ith the value of its Nectar loyalty points being cut by half in April, Tesco Bank credit card +28 Sainsbury’sW has offered special deals and Santander banking +27 more points on fuel to soften the reaction of disgruntled customers to their reward loss. veryone loves to complain about their bank, but two financial brands have come top of With just one point being awarded for the Net Promoter Score loyalty benchmarking report. every £1 spent compared to the previous ESatmetrix, the US company that produces the NP scores which are based on the two (each point is worth 0.5 pence), propensity of customers to recommend products, analysed 60 UK brands for the Sainsbury’s reward is now just half that of benchmarking report. Tesco Clubcard. In an evolution of its Nectar First Direct, Tesco Mobile, Santander and Freeview all did well, with credit card provider reward programme, Sainsbury’s intends MBNA rising rapidly through the ranks. to offer extra points or deals to individual customers on regularly-purchased items or to tempt them to shop once again for items that their analytics show the customer has recently stopped buying. Despite the points cut, Sainsbury’s says it is reinvesting in Nectar by giving more Amazon Prime tops points in special bonus events. Straight after the cut it ran its “biggest ever” points reward scheme rankings giveaway, with customers offered 10x Nectar points for every litre of fuel they Subway shows biggest rise in customer satisfaction bought for the month to May 10. In addition to Aldi and Lidl, Sainsbury’s he Amazon Prime loyalty scheme has topped the satisfaction rankings in a poll of US faces pressure from Morrisons whose customers. recently-launched Match & More scheme TSeventy-one per cent of 10,000 customers surveyed said they were ‘very satisfied’ with offers to match prices at competitors and the scheme in the rankings from reward scheme management company Bond Brand now has over 5 million cardholders. Loyalty. Amazon topped the overall and retail mid-frequency rankings, while Kroger Fuel was rated best high-frequency retailer and L’Oreal Paris Gold Rewards was ranked top in CPG (consumer packaged goods). Nectar Italia blow Nectar Italia points issued decreased by 40% in Q1 this year compared to the same period in 2014, mainly due to the loss of its anchor grocery partner from March 31.
Loyalty Magazine JUNE 2015 9
Era of Connected Trending
GAME Commerce has arrived CHANGERS Mobile coupons are most popular
he Connected Commerce era has arrived, according to a new global survey of consumers, with people taking a blended approach to shopping online and offline. TOne-quarter of respondents to the survey by Nielsen say they are already ordering grocery AirAsia denies products online for home delivery and more than half (55%) are willing to use it in the programme sale plans future. The survey of grocery shopping habits polled 30,000 people in 60 countries to understand how digital technology will shape the retail landscape of the future.
Consumers willing to use in-store digital engagment options (%)
irAsia has denied reports it is planning to sell a stake in its rapidly expandingA loyalty programme. The budget airline’s ‘BIG’ scheme has over 13 million members and is signing up 150,000 new flyers a month. The Malaysian carrier was reported to be in talks with investors interested in taking a minority 30% stake in the loyalty scheme that could be valued at a total of US$300m.
Brand awareness is main loyalty benefit Mobile apps rated as most important factor for future success in Ketchup survey
aising brand awareness is the main Asked about their approach to loyalty asset companies get from loyalty schemes, 41% of the consumers surveyed Rschemes, according to a survey by Ketchup, said sales discounts are the most followed by improving profitability. important aspect, 17% said the programme The loyalty marketing agency surveyed 105 should come up with exclusive sales offers marketers and 600 consumers in Turkey for for them, while a further 17% said they like their views on the benefits of programmes buy 1 get 1 free campaigns. for both companies and customers. In terms of what will be the most Barclays works Seventy-four per cent of marketers put important factors for the success of brand awareness as the top benefit for loyalty schemes in the near future, 64% of on the volatile companies, followed by profitability (64%), marketers said mobile/mobile apps, 44% Dealing with current and an increase in sales/revenue from said personalisation, while 32% thought it current customers (55%). would be brand partnerships. account switching
What assets have companies gained through their loyalty schemes? arclays has launched Blue Rewards to keep current account Brand awareness has risen 74% holdersB loyal. Launched in April with a fee of £3 It has affected the brand’s profitability 64% per month, customers could earn £15 in rewards a month and a net £144 a Revenue/sales have risen among current customers 55% year. There is a basic monthly bonus of £7 whether their account is in credit It allowed us to collect more customer data 43% or overdrawn. In addition there is a £5 a month bonus for mortgage holders, It had a positive effect on brand perception 43% and £3 for those who have a Barclays home insurance policy. It had a positive effect on gaining new customers 21%
JUNE 2015 Loyalty Magazine 10 FINANCIAL LOYALTY Should I stay... uld I go? 7Wrong or sh+ newo regulation= loyalty compliance cuts Interchange fee cuts + new data privacy requirements
ou have probably noticed a strong Crispin Rogers, director, targeted end of the year, far more care will have financial services focus in this issue marketing solutions, Visa Europe: to be taken over the use and storage of Y of Loyalty Magazine. There is good customer data reason for this. A maelstrom of regulation, “It is the end of one • Mobile payments innovation is now that includes massive cuts to interchange considered essential, if costly, and (the fee a card issuer charges the merchant size fits all – bringing development costs have to be paid for. for an electronic transaction), new data in merchant funding privacy rules and the reduction to seven he obvious prediction would be for days for a customer to change provider of rewards based on banks and payment card issuers to have all impacted the ability of card spend history together Tcancel loyalty programmes in their companies and banks to carry on as usual. droves, pull back on rewards and severely A few, namely Capital One and RBS/ with big data and digital restrict any new spend. Natwest, have done the predictable and technologies will enable But this isn’t happening, and banks cut their cashback reward programmes to increasingly tailored and questioned by Loyalty Magazine seem pay for the loss of interchange, but many remarkably upbeat about their plans for are taking a more considered approach to personalised content reward programmes, customer incentives the problem. Cards co-branded with Avios, where previously and future plans. including the TSB Avios Credit Card account programmes were and the British Airways American Express “The theory is that credit card have been reviewed, but there homogenous.” has been no widespread cull. They have interchange will make asked the question: ‘How can we keep our The problem: Less money for financial card transactions more customers?’ and the answer coming back is loyalty programmes in 2015. ‘Better loyalty offerings’. • Interchange fees – the amount transparent, and that Merchant funded offers are an obvious charged by issuing banks to retailers merchants will pass on choice, but there are other ways. BBVA for managing payment transactions – has employed a design consultant to have been severely cut. The Merchant the savings to customers. make bank branches more user friendly, Interchange Fee (MIF) is being capped at Few believe either of others are developing their omnichannel 0.3% for credit cards and 0.2% for debit these things.” strategies to make it easier to see one cards. Commercial cards and three party picture of the customer across all channels schemes such as Amex and Diners are Instead, banks are exploring other ways and all bank services, and Czech bank unaffected currently. to fund their loyalty programmes, and at CSOB (Ceskoslovenská obchodní banka) • There is a mass of regulation coming in the top of the list are merchant funded has launched Era World Rewards as a ‘next this year that is both expensive and time reward programmes. Also being considered generation’ programme that extends consuming to comply with. This includes is raising fees for cards with perks.T his is beyond credit or debit card purchases. PSD2 (the second Payment Services a practice already operated by high end Instead it offers rewards for additional Directive) which will make it easier for card issuers, and is common throughout banking activities including buying new new financial services providers to enter mainland Europe for most credit cards and products, activating mobile banking, and the market and require the separation bank accounts. participating in surveys. These are just of scheme and processing. The third But overall, banks say they have allowed a few examples of the many initiatives raft of legislation concerns data privacy. for the changes in their planning models, emerging across the Europe region. This is still under discussion, but by the and so it is business as usual.
Loyalty Magazine JUNE 2015 FINANCIAL LOYALTY 11
Business as Recognising the power usual for Amex, of the reward while other egulatory changes and increased competition mean loyalty is now more important than ever within financial services but a mindset change is needed across issuers take Rorganisations to meet the needs of their customers and secure their loyalty, says Christopher Evans, director of Collinson Group. “Just 14% of senior managers and 29% of the board see recognising and rewarding stock existing customers as key to achieving their goals”. Looking at the top 15% of of the world’s affluent consumers 67% expect their banks to reward them for loyal behaviour however, merican Express, has no plans to only 43% believe that their bank knows and understands them.” scrap its 5% cashback cards, which These figures come from a survey for Collinson Group of 105 senior professionals working Ais not surprising as three party in UK Financial Services, conducted by Research Now, and a further survey of 4,400 schemes have not been hit by the affluent middle class consumers across eight countries. interchange cuts. The only stopping point is that as the differential between four party interchange and Amex increases, so merchants may object to the high fees and they will have to fight Weak customer experience quite hard to justify their premium. There are big rewards for customers from American Express cards. Its fee-free leaves banks vulnerable Platinum Everyday card pays 5% on £2,000 of spending in the first three months, generating a maximum of £100 cashback. lobal retail bank customer experience non-bank players. While investments in After the three months, tiered levels are stagnating, with an increase improving front office customer experience cashback rates of between 0.5% and Gin customers likely to defect over the have expanded banks’ offerings, middle 1.25% will apply. So spend up to £3,500 a next six months. and back office transformation has been year and you will receive 0.5% cashback The inability of banks to adapt rapidly to plagued by under-investment and will be on that amount. Between £3,500 and emerging technologies means that new the key to resolving disjointed customer £7,500, it is 1% cashback. Above that, it entrants are posing an increasing threat experiences and improving longer term rises to 1.25%. to their business, according to the World loyalty rates.” Santander, on the other hand, which Retail Banking Report 2015 by Capgemini The report states that retail banks must has one of the most applauded financial and Efma. make investments to improve customer loyalty programmes, pays cashback on The report found that customer experience, especially with middle and its “123” credit card, including transport experience levels at traditional banks are back offices, which have historically been (3%) and supermarket shopping (1%) stalling as non-bank players with agile ignored and are essential to providing and has said it would need to “reflect” and innovative value propositions make engaging digital services through faster on the impact of the interchange fees. it difficult for banks to keep up with processing times and reduction in errors. Ben Green, head of innovation rising expectations around personalised, says Santander is concentrating on engaging and seamless customer Other findings in the report include: appealing to the Millennial customers experiences. • Gen Y continues to report lower positive who want instant information in an The report, which questioned bank customer experience levels versus easily accessed format that “doesn’t tell executives and over 16,000 customers from other age groups, underscoring banks’ you what you should do, it tells you the 32 countries, found that the percentage of challenge to meet Gen Y’s expectations. obvious – how much you are spending customers likely to leave their bank in the Less than 50% of Gen Y customers and how much you have.” By connecting next six months has increased to over 15% globally are likely to remain with their with customers through in some regions. primary bank in the next six months. using data “Disenchanted customers, combined • Banks still have work to do in intelligently, with the agility and innovative nature of transitioning customers from branches Green hopes non-bank competitors, is leaving the door to digital channels. Customers perceive that Santander wide open for capturing market-share,” the branch as offering better service will continue said Jean Lassignardie, chief sales and than the internet for both complex and to be the marketing officer at Capgemini Global simple services. card of choice Financial Services. • The competitive threat to banks is because it offers “Improving customer experience is the accelerating due to their inability to something back. best strategy to deflect competition from quickly adapt and innovate.
JUNE 2015 Loyalty Magazine 12 FINANCIAL LOYALTY Merchant funded rewards prove favourite
Not surprisingly merchant funded rewards are the big new loyalty proposition being considered by countless card issuers.
The proposition is a no-brainer. up from this summer by the European If the programme is presented to a large Commission, the financial institution enough customer set with access to a anonymises the consumer information and significant circle of participating merchants presents the data to the rewards vendor, with desired goods and services, then the who uses analytics to interpret the data financial institutions would see the true and present segmentation options to the Reward tool vendors value of offering the programmes, and merchant. Access everyone will benefit.T his makes sense in The merchant then creates a marketing theory and practice, so long as everyone campaign based on this information Affinity Solutions works together, which isn’t always the case and the offer is presented using mobile in the continuous (and often times bitter) channels which can include geo-location Bankons struggle between merchants and financial and SMS messages as well as web and Billeo institutions. even physical coupons. There are some giant operations making a When the consumer redeems through Cardlytics living from the concept, including Groupon activation of the offer mechanism, the Cartera Commerce and Living Social. In addition, there are a payment information is captured by the FI, host of voucher and coupon companies the payment is made and the data sent to CBSI Loyalty Solutions that follow the same principle of gathering the rewards vendor, which then requests edo Interactive together sufficient propositions to appeal fees for the redeemed offers from the to the customer base. merchant. The merchant sends fees for FreeMonee Network redeemed offers to the rewards vendor, who Winners and losers sends the FI their share of the fee revenue. Linkable Networks The merchant downside is that it is difficult It has probably occurred to you by now Micronotes to prove they get repeat business, plus that this is interchange wrapped up to look fees or discounts eat into profits. Unless like a reward mechanism. Well yes, but it RewardsNow the offers can be accurately targeted, works, and there is plenty going on already. Segmint consumers can become overloaded and Both Lloyds and Barclays in the UK offer no longer interested in the “exciting and merchant funded rewards. Barclays calls its Truaxis (BillShrink) unique” offers delivered to their mail box programme Bespoke Offers. The website every day. features a range of deals from some of But when it works, there is massive the UK’s largest retailers, including Tesco, benefit for all parties.T he secret is to British Airways, Virgin and Starbucks. The personalise the offers, which can be offers will include merchant discounts as done through analysing payment card well as deals which the customers have to transactions. To meet data privacy purchase in advance, similar to daily deals regulations, which are being ramped offered by Groupon.
“ I am reminded of the opening sequences of the 1970s US TV series, ‘The Six Million Dollar Man’: Things are looking bleak for the pilot Steve Austin after a major runway crash. But whilst on life support we hear the voiceover: ‘We can rebuild him. We have the technology. We can make him better than he was. Better. Faster. Stronger.’” Crispin Rogers, director, targeted marketing solutions at Visa Europe
Loyalty Magazine JUNE 2015 FINANCIAL LOYALTY 13 Trying something NEW Taking an aggregated approach
ouldn’t it be great if issuers, taking the Amazon and Uber experience “There will always be merchants, airlines, hotels, holiday for granted, it is setting the bar ridiculously new ways of rewarding Wcompanies and all the other places high and we are starting to expect the we spend our money could be a little more experience on other platforms (banking customers,” says creative, and produce Merchant Funded for example) to mirror this precedent.T he Rewards that enable us to gain offers Digital Age means consumers are savvier Erkut Erkut, managing across the whole of our spend, rather than and more demanding and they want to partner with Ketchup just parts of it? This is the proposition we engage on their terms. The power is now Global. will be seeing a lot in the coming months. firmly in the consumers hands. Card issuers and banks certainly have Cordeiro argues too that consumers “There will always be a next big thing. the data to personalise offers in this way, expect companies to use their data However, positively surprising the and as long as data privacy rules allow, intelligently, so that offers are personalised, customers will always be a central tenet could segment in such a way to produce contextual and intelligent. to customer loyalty. Loyalty programmes more substantive levels of partnering, should reinvent themselves over and with deeper, symbiotic relationships with “ If we follow the data trail, over again to find ways to positively retailers, telcos and everyone else. surprise their customers. In most cases Terry Cordeiro, Head of Proposition we can give customers technology and data enables the loyalty Development for Transformation, Lloyds a personalised and programmes to do so. Rewarding Banking Group doesn’t only have one of the customers with a gift they have the most impressive titles we have seen engaging experience. mentioned on their Facebook page for a while, he is also something of an Amazon follows the data would positively surprise the customer evangelist. and make him/her feel valued.” Cordeiro doesn’t see much value in trail in an unobtrusive existing loyalty programmes and believes way, and it works.” it can be done better. He explained: “If a With more than 50% of digital commerce transactions now on a mobile, it will be necessary for any future financial loyalty programme to embrace both the physical and the virtual world, and aggregate both transactions and reward offers to enable personalisation and information return to customers, just as the Lloyds Erkut suggests that reward schemes Everyday Offers programme is doing. may not look like rewarding at all, The programme has over 3m registered however they have the potential to customers and means thousands of people strengthen customer loyalty as much are being presented with relevant offers as obvious rewarding schemes. For every day. instance, customers can be given the “Consumers are getting tired of overly chance to be a part of the business product doesn’t solve a problem, it might specialised applications and services and through finding a new service logo, as well not exist. The problem with loyalty the confusing amount of choice that a product name, or even a campaign programmes is that it’s so difficult to these services offer. Aggregation of the slogan. understand where I can earn and what customer journey will give us more and He also suggests that with social stored value I have that I don’t feel like I am more opportunities. If we can consider responsibility on the rise, loyalty getting any benefit from them. And whilst that loyalty and payments are just part of programmes will be integrated into Generation X and Y are important, we a wider spending experience, that will be charities and NGOs (Non-Governmental mustn’t forget the user experience for the an advantage,” said Cordeiro, who suggests Organisations) more strongly, thus generation using the product right now.” that this information exchange should instead of rewarding the customers Quoting Accenture, which reports that be kept fun, engaging and simple, with directly, social causes of the customers we “want what we want when we want tangible rewards offered that people value, will be rewarded which in turn can be it” Cordeiro said that with consumers to ensure the creation of a feedback loop. used as social responsibility projects.
JUNE 2015 Loyalty Magazine 14 MERGERS, ACQUISITIONS AND LAUNCHES 15
The Judges
Eric Austin Chairman of the Judges Freelance marketing consultant
Brian Almeida Radek Hrachovec Ian Ramsden MD and partner, Managing partner, Director of strategy, Strategic Caravan RadekHrachovec.com Direct Solutions International International, Sri Lanka
Paul Foley Chris Jacobs Graeme Thomson Formerly CEO of Aldi, Independent customer MD, Premium Group founder and managing loyalty consultant Marketing partner, Foley Retail Consulting
Adrian Hado Annich McIntosh Luan Wise Formerly head of insight (non-voting) Independent marketing and analytics, Avios Editor, Loyalty practitioner Magazine and CEO, The Loyalty Awards
Simon Hinks Mark Palmer Peter Wray Director, PARALLEL Founder, Maverick Senior consultant and Marketing Planet company founder Loyaltymatters.com
JUNE 2015 Loyalty Magazine 16 THE LOYALTY AWARDS WINNERS
The Winners
2015 is a very good year for Loyalty and this is reflected in the quality of the entrants to The Loyalty Awards.
This meant some very tough decisions for the judges, which Sponsored by explains the number of Highly Commended awards given this year – where the recipient only narrowly missed being a winner.
In the following pages we pay tribute toT he Winners, who have fought off stiff competition to make it to the podium. Please read the judges comments. They reflect the thoughtful approach now being taken to keeping customers; to the innovative and creative work being done, and the efforts taking place to re-engineer and improve the proposition. They highlight excellence from across the Europe, Middle East and Africa region.
These are exciting times for Loyalty and the bar is being set very high indeed.
Best Use of Gamification to enhance Loyalty /// New /// 17
Best User ExperiencE 19
Best Use of Technology In a Loyalty Programme 21
Best Use Of CRM in a Loyalty Environment 22
Best Social Responsibility (CSR) Initiative Linked to Loyalty 23
Best Use of Customer Analytics/Data 25
Best Loyalty Industry Innovation 27 Loyalty Programme of the Year – B2B 37
Best use of Communications in a Loyalty Programme 28 Best New Loyalty Programme 39
Best Loyalty programme marketing campaign 29 Best Short Term Loyalty Programme 40
Loyalty programme of the year – Financial Services 30 Best Long-Term Loyalty Programme /// New /// 41
Loyalty programme of the year – food 31 Best Programme of the Year – European Union and Turkey 43 Loyalty programme of the year – non-food 32 Best Programme of the Year – Loyalty Programme of the Year – Travel 33 Central and Eastern Europe 43
Loyalty Programme of the Year – mobile 34 Best Programme of the Year – Middle East & Africa 43 Loyalty Programme of the Year – Card Based 35 VICTOR LUDORUM 43 Loyalty Programme of the Year – Coupon or Voucher Based 36 PERSONALITY of the Year 44
Loyalty Magazine JUNE 2015 THE LOYALTY AWARDS WINNERS 17
Best Use of Gamification to enhance Loyalty /// New ///
Highly commended WINNER
Dubai Police jetBlue Airways / Comarch Virtual applications JetBlue’s TrueBlue Badges Dubai Police has employed cutting-edge TrueBlue Badges is a social-engagement extension of JetBlue’s loyalty programme that enables video games technologies to create interaction with customers outside of their normal booking and flying activities. Members are virtual incidents ranging from crime able to earn TrueBlue points for the badges they collect for various activities, share contextualized scenes to traffic accidents to hostage branded content and build their loyalty user profiles. scenarios. These require SWAT planning and intervention in an engaging way that mimics real-life situations to allow the trainee to learn-by-doing to harness their skills in a safe and practical environment.
What the judges said:
Hugely innovative programme which has “taken the principles and learnings of a loyalty programme and used them to improve the job, the training and to save lives.”
FINALISTS Members can earn points for activities such as sharing on social media, interacting with the Barilla / Advice Group programme’s partners, connecting with other members and travelling. Points come along with actual badges that members can compete for and collect over time.T hese badges, along with Amici del Mulino an interactive user map and leaderboard rankings, represent the gamification elements that are central to the overall user experience ofT rueBlue Badges. Auchan France / TCC Looney Tunes FETE DU SPORT
Cable & Wireless Win & Drive What the judges said: Dansk Supermarked Winning hearts JetBlue has taken online loyalty to a different level on and off aeroplanes. MAXIMA / Boost The massive results really engaged the Puponautai II “ users. Excellent data.” Quidco Quidco’s Christmas ‘Cookie Trail’
Topaz Energy Play or Park loyalty game FREE-Treats.
Wanda Digital gnctrkcll mobile application
JUNE 2015 Loyalty Magazine 18 THE LOYALTY AWARDS WINNERS
Loyalty Magazine JUNE 2015 THE LOYALTY AWARDS WINNERS 19
Best User ExperiencE
Highly commended WINNER
Vodafone Turkey / Turkcell Ketchup Loyalty Marketing Turkcell One RED loyalty programme Turkcell, Turkey’s leading mobile operator with 35 million customers and a wide range of digital The Vodafone RED loyalty programme products and services, is drastically rethinking and rebranding all its online properties, unifying solely focuses on making life more them into a single design system that could easily scale.T he solution had to be simple and intuitive convenient for its customer base, enough to be adopted by the mass-market audience and reward its customers. supported by the statement: “When you are in need, life stops for Vodafone RED and we take action to make your life easier”. In 2014, the RED programme became one of the major loyalty programmes in Turkey.
What the judges said:
Vodafone Turkey has worked hard to The new solution is optimised for desktop, tablet and mobile and is aimed at increasing business efficiency, lowering operational costs while providing greater value and support to users. It has “understand the needs redefined howT urkcell communicates with customers and set a new standard for the rest of the and requirements of industry. its digitised young professional customers, concluding that anything that makes life more What the judges said: convenient will be valued. Eight times more members In an omnichannel world, the company participated in Red that makes the effort to join up the channels campaigns in 2014 than “and create a seamless customer experience the previous year, and more is going to be the best in every country.T his is than half a million people especially the case in the highly competitive benefited from Red loyalty.” Turkish market.”
FINALISTS
MAXIMA / Boost Puponautai II
Monsoon Accessorize / Ikano Insight Incorporating the Accessorize brand
Qitaf / Saudi Telecom Company Qitaf Partner redemptions Sponsored by
JUNE 2015 Loyalty Magazine 20 THE LOYALTY AWARDS FINALISTS
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AviosPressRelease_Final.indd 1 26/05/2015 12:21 THE LOYALTY AWARDS WINNERS 21
Best Use of Technology In a Loyalty Programme
Highly commended WINNER
Mothercare / RAPP Whitbread Becoming the world’s most Whitbread Restaurants loyalty scheme caring retailer Whitbread Restaurants uses new smart technology to deliver a truly personal relationship in a First-time mums want the best for their highly competitive market. Moving away from mass discounting it has turned unknown guests baby, but how do they know where to into known. The programmes of three Whitbread brands (Beefeater Reward Club, Brewers Fayre start? Mothercare connected all customer Bonus Club and Table Table Tasty Rewards) provide long term value with enhanced customer channels to its database, ensuring that experience and technology to make it easy for everyone, increasing the participation of helping new mums to become the best members in 2014. they can be is at the heart of its strategy.
What the judges said:
A very good use of existing technology to “bring new life into a static company. e-receipts connect to the customer and there are lots of great touches, such as the #2am Every month over 22,000 members celebrate in the restaurants by redeeming one of the offers. hashtag which the judges Delivery of this ‘earn and burn’ points-based card initiative achieved nearly 30% growth in 2014 and particularly liked.” now has an active base of over 1.5 million members across the three schemes.
FINALISTS
Coalition Rewards PINS: the first shopper flyer loyalty programme in the world What the judges said:
Nicholson / Eagle Eye Solutions One of the most comprehensive and Ale Trail application successful UK loyalty schemes. They take to another level sales, reduction of fraud and Heathrow Airport / Comarch “ Heathrow Rewards Instant targeting to fundamentally improve the redemption app experience of the staff and the customer.”
Mastercard / Inspire Europe Inspire Europe in partnership with MasterCard Loyalty Solutions
Morrisons Match & More / Capgemini Price match and points reward card FINALISTS Vodafone Turkey / Ketchup Pegasus Airlines / Monitise Loyalty Marketing Sponsored by Yazilim Vodafone RED & Karafirin – M2M Mobile loyalty offering Integrated Digital Solutions
The Saudi Investment Bank / Ketchup Loyalty Marketing Saudi Investment Bank loyalty programme
JUNE 2015 Loyalty Magazine 22 THE LOYALTY AWARDS WINNERS
Best Use Of CRM in a Loyalty Environment
WINNER FINALISTS
Tatry Mountain Resorts Club Carlson – The Carlson GOPASS – The digital skiing experience Rezidor Hotel Group / ICLP ‘Thank you’ campaign GOPASS combines e-shop (remotely loaded ski pass) with a loyalty card and is mixed with eight other features. GOPASS revolutionizes the interaction of a ski resort with skiers. We call GOPASS CRM “the digital skiing experience”. Follow Emil the Skilover on his digital skiing trip with GOPASS. Heathrow Airport / Acxiom Realigning strategy to improve CRM contribution to corporate objectives
MultiPlus Card C@T – Coupons at till
Natura Brazil / Comarch Implementation of CRM & loyalty strategy in integrated omnichannel B2C & B2B business model
Turkcell Turkcell Care for professionals
Volvo / Ketchup Loyalty Marketing Volvo Benimle loyalty programme
Wanda Digital gnctrkcll mobile application
After skiing, personal reports based on data from the ski lift gates are generated and within seconds sent to the thousands of GOPASS skiers heading home from their trip and remembering their great skiing day. The open rates of these emails are constantly above 70%. Emails include offers for a ski pass on the next visit.
What the judges said:
They have taken one business and flipped it by thinking about relationships and data. “This programme gives skiing feedback, it helps merchants sell more, it has gamification and it fundamentally increases loyalty, not least by inviting people back.”
Loyalty Magazine JUNE 2015 THE LOYALTY AWARDS WINNERS 23
Best Social Responsibility (CSR) Initiative Linked to Loyalty
FINALISTS WINNER
Abbott Turkey / Virtual Marketplace from MySchool MyVillage MyPlanet 360DRCMarketing Youth Day campaign: Helping school kids who don’t have desks Life is Valuable Club We challenged cardholders and staff to take action over National Youth Day: swipe your MySchool card to help raise funds for the DesmondT utu Tutudesk campaign. Together we could give 2000 Cable & Wireless kids in rural communities something they needed desperately; a flat surface to write on – a Happy to Give portable lap desk!
Multipont Programme Let’s help Santa! – the best CSR initiative
XL Team SafeDrive
As a result of the Youth Day initiative, theT utudesk Campaign secured several new private donors and signed new MySchool cardholders who now actively support and fund the Campaign on an ongoing basis. MySchool partner stores benefited through increased sales, differentiation from competitors, word-of-mouth in the youth target segment and new cardholder acquisition.
What the judges said:
MySchool MyVillage MyPlanet consistently win because they perform, have ideas and “deliver value. This was a great example where mobile desks are being delivered to thousands of disadvantaged children. They really make a difference.”
JUNE 2015 Loyalty Magazine 24 THE LOYALTY AWARDS WINNERS
Loyalty Magazine JUNE 2015 THE LOYALTY AWARDS WINNERS 25
Best Use of Customer Analytics/Data
FINALISTS WINNER
Club Carlson – The Carlson Club Carlson – The Carlson Rezidor Hotel Group / ICLP Rezidor Hotel Group / ICLP Nordics Campaign At Risk – Campaign Club Carlson is the frequent guest programme of the Carlson Rezidor Hotel Group. There was a shortfall in bookings for its Nordics hotels in Q4 of 2013. Eight hotels in particular were experiencing Mothercare / Rapp decreased revenue. There was a need to combat this trend head-on and encourage more bookings. Becoming the world’s most caring retailer
MultiPlus Card Coupons at till drive new sales and slash costs
Turkcell Turkcell proactive tariff consultancy
Email contents reflected members’ stay behaviour and the eight hotels in need of bookings were featured to put them top of mind.T he campaign’s depth of analysis and micro-segmenting led to fantastic results. ROI was a record-breaking 10,698%, with an email open rate of 29.4% (significantly higher than our average rates of 21%).T he majority of revenue generated was for the eight hotels we deliberately promoted to boost their bookings.
What the judges said:
There is clear evidence of segmentation to produce an excellent return and an “impressive RoI.”
Sponsored by
JUNE 2015 Loyalty Magazine 26 THE LOYALTY AWARDS WINNERS
INNOVATION DOESN�T COME EASY. SO CONGRATULATIONS.
It’s good to see unwavering dedication to excellence. At ICLP, we believe in devotion too – the devotion of our clients’ customers. For us, the heart of customer loyalty is the customer’s heart.
Whether it’s through acquisition, retention or advocacy, we drive customer devotion to drive commercial success. If you’d like to find out how we could help you, please call us on +44 (0)20 3725 0197.
iclployalty.comLoyalty Magazine JUNE 2015
LoyaltyAwardsWinnersMagazineAd-A4.indd 2 26/05/2015 10:10 THE LOYALTY AWARDS WINNERS 27
Best Loyalty Industry Innovation
FINALISTS WINNER
Cable & Wireless Morrisons Happy to Give Match & More In October 2014, Morrisons launched Match & More.T his is the first programme of its kind to Coalition Rewards combine loyalty and price match into one proposition – and the first to price match Aldi and Lidl PINS – the first shopper flyer loyalty plus Tesco, Sainsbury’s and Asda. Shoppers can also collect points on hundreds of products and fuel. programme in the world
MasterCard MasterCard Pay with Rewards
The Saudi Investment Bank / Ketchup Loyalty Marketing Saudi Investment Bank loyalty programme
Vodafone Turkey / Ketchup Loyalty Marketing Avantaj Cepte mobile loyalty platform
Combining loyalty and Price Match, we have a smart and efficient proposition.T his ‘two for one’ feature enables us to leapfrog our competitors, some of whom are locked into inflexible 1% reward schemes. With customers identifying themselves at point of sale, we are developing a rich source of data to understand them and personalise our offer to better meet their needs.
What the judges said:
In a fiercely contested category where opinion was polarised, brave Morrisons “demonstrated huge take-up. The result of focusing on the customer in a commoditising market, they brought price comparison to real time.”
Sponsored by
JUNE 2015 Loyalty Magazine 28 THE LOYALTY AWARDS WINNERS
Best use of Communications in a Loyalty Programme
WINNER Highly commended
Club Carlson – The Carlson Rezidor Hotel Group / ICLP JetBlue Airways / Comarch ‘New Year’ campaign JetBlue’s TrueBlue Badges Club Carlson is the frequent guest programme of the Carlson Rezidor Hotel Group. We wanted Social Media communication is at the core to start the new year with a bang, letting our active members know how much we appreciated of the TrueBlue loyalty scheme. Members their loyalty and encouraging them to book more trips in 2014. Rather than a standard money- can invite friends from social media to saving offer, we gave them something extra special and inspiring. A brand experience they would compete with each other on leaderboards. never forget. At the same time, the JetBlue Social Team engages members with real-time marketing and unique experiences (i.e. delivering coffee to the plane for a member complaining on Twitter or creating a personalised Valentine’s Day Badge after someone expressed their love to the brand on that day).
What the judges said:
Social engagement in a loyalty programme that “enables interaction with customers outside of their normal booking and flying activities.”
FINALISTS We sent an email inviting members to visit a Facebook app we developed.T he app integrated their Club Carlson data with any social activity connected to hotels and places they had visited.T his was Tesco Global Zrt / Hammer complemented by a trip planner tool to inspire them, suggesting a variety of global events as well MS Kft as the facility to book the nearest Club Carlson hotel to that experience. Tesco Rubik loyalty promotion
Bupa Global / Them London Brand building with birthdays
Turkcell What the judges said: Turkcell Supertradesmen
Communication for this campaign was highly targeted and relevant, producing very “good results. They capitalised on the key moments of memories.”
Loyalty Magazine JUNE 2015 THE LOYALTY AWARDS WINNERS 29
Best Loyalty programme marketing campaign of the year
FINALISTS WINNER
Avios Coalition Rewards The Avios Big Reward campaign PINS – the first shopper flyer loyalty programme launch campaign PINS is the first shopper flyer loyalty programme in the world, launched in March 2014.This unique Club Carlson – The Carlson loyalty programme model combines two different types of programmes – traditional frequent flyer Rezidor Hotel Group / ICLP and coalition type of loyalty programmes.T he launch campaign enrolled more than 1,000,000 new Q1 Campaign members in less than 12 months!
Dansk Supermarked Gruppen / TCC Animals of the World take over Denmark
Electric Ireland Electric Ireland Powering Rewards
Le Club Accorhotels Rewarding your loyalty with Le Club Accorhotels
MERKUR Austria / TCC Partners communicated PINS actively via their websites, customer letters and magazines. Hundreds Merkur Austria Looney Tunes of PINS posts appeared on Twitter and Facebook, and it was discussed in popular blogs. 3.5 million visits were made to the PINS website during the launch week, and it quickly became the third best known loyalty programme in Finland with a spontaneous awareness of 55%. Virtual Market Place Vote4Charity with MySchool MyVillage MyPlanet
Vodafone Turkey / Ketchup Loyalty Marketing Vodafone KaraKartal What the judges said:
Zorlu Property Group / From a standing start, Coalition Rewards Ketchup Loyalty Marketing achieved number one position for a Google Zorlu World – Miles&Smiles word search in Finland which engaged Campaign “ people’s interest. In fact 20% of people in Finland were engaged by the programme.”
JUNE 2015 Loyalty Magazine 30 THE LOYALTY AWARDS WINNERS
Loyalty programme of the year – Financial Services
WINNER FINALISTS
The Saudi Investment Bank / Ketchup Loyalty Marketing Lloyds Bank / Aimia Saudi Investment Bank loyalty programme Everyday Offers powered by Cardlytics The Saudi Investment Bank launched the SAIB loyalty programme comprising discounts, points for catalogue redemptions and conversion to airline miles at the beginning of 2014 to improve SAB’sI image as a strong retail bank and to increase customer satisfaction and thus NPS to grow more Akbank strongly in retail banking. Emotional Touch
Aviva / Cherry London Aviva Advantages
The overall churn rate has decreased from 3.1% on a monthly basis to 1.8% on a YonY basis, while the churn rate of high value customers has decreased from 2.8% on a monthly basis to 1.5% YonY. After collecting data via the programme and later mining it, several campaigns were designed and launched. As a result of this, the average revenue per active customer increased by 6% within 6 months of the customer joining the programme.
What the judges said:
This programme offered a cross product approach that rewarded transactions, not “just loans. The result was a huge increase in NPS of 24% YonY and reduced churn in a very short period of time. With 230 partners the programme demonstrates reach and value for all parties.”
Loyalty Magazine JUNE 2015 THE LOYALTY AWARDS WINNERS 31
Loyalty programme of the year – food
FINALISTS WINNER
Anchor / Whynot! Whitbread Anchor Rewards Club Whitbread Restaurants loyalty scheme Delivering a truly personal relationship in a highly competitive market, and moving away from COOP Adriatica / TCC Group mass discounting it has turned unknown guests into known. Combining points and targeted Supervitamini (The Super Vitamins) benefits with the customer at its heart.T he programme provides long term value, with great customer experience and use of new smart technology to make it easy.
Dansk Supermarked Winning hearts
Greggs / Eagle Eye Solutions Greggs Rewards
MAXIMA / Boost Puponautai II
Morrisons – Match & More Price match and points reward card
MyCheck / BUSABA EATHAI Smart technology is the foundation, built from a single database platform which provides a single Busaba Eathai and MyCheck set the view of the guest, pre-population of personal details on sign-in, full customer recognition from the standard for mobile loyalty loyalty call centre, and tracking of visits.T his tracking allows personalised emails, triggered daily, and delivery of ‘surprise and delight’ benefits such as a free birthday meal and the option to provide other celebration dates for family members’ birthdays and anniversaries.
What the judges said:
A good all round omnichannel programme which showed good use of data “and voucher validation.”
JUNE 2015 Loyalty Magazine 32 THE LOYALTY AWARDS WINNERS
Loyalty programme of the year – non-food
WINNER Highly commended
HMV Topaz Energy Purehmv loyalty Play or Park loyalty game Purehmv is a unique rewards programme, dedicated to bringing fans closer to the entertainment Topaz Energy is Ireland’s largest Fuels and they love. In 2014, 350,000 new members joined the points based programme which had been Convenience retailer with its Play-or-Park revived following HMV’s administration in early 2013. Member retail spend at HMV totalled over loyalty programme. Points are earned on £40m. fuel and shop purchases to be played via the Mobile App, Online, or FreeT ext, for monthly Experiences-of-a-Lifetime and guaranteed FREE-Treats.
What the judges said:
Topaz demonstrated outstanding results for the “sector.” FINALISTS
Dansk Supermarked Customers were told their pre-administration points would be honoured. During 2014, over 200,000 historic members returned to the programme to reclaim their points and importantly Winning hearts continue shopping in HMV. The programme deepened brand engagement with HMV and the entertainment industry as a whole, illustrated by 1,600 members attending exclusive meet & Soyak / Ketchup loyalty greets with their favourite artists across the country. marketing Soyak Elite Club
What the judges said:
HMV’s loyalty programme turned the company round in a failing market. This was a “stand out winner, where a joining fee ensured customers felt like members, resulting in an average increase of £4 per customer compared to those outside the scheme.”
Loyalty Magazine JUNE 2015 THE LOYALTY AWARDS WINNERS 33
Loyalty Programme of the Year – Travel
Highly commended WINNER
JetBlue Tatry Mountain Resorts JetBlue’s TrueBlue Badges Building the first truly digital ski resort in Europe earn & burn FF loyalty with a new GOPASS combines an e-shop (remotely loaded ski pass) with a loyalty programme with eight main generation of customer engagement features. It is the first time a ski resort has implemented all these features to such an extent in one programme. JetBlue rewards its customers programme. not only for flights but also for a wide range of activities including social interactions, referrals, partners purchases, digital engagement, surveys or collecting badges. TrueBlue is a great example of the new approach to loyalty: it’s social, digital and personal.
What the judges said:
A hugely successful programme in a “competitive sector. It takes the concept of mileage miles and adds gamification and interactive experiences using a portal.”
GOPASS collects data from ski liftgates, measures skied kilometres and altitude meters and FINALISTS immediately after skiing issues a personal skiing report. Skiers can also challenge themselves to fulfil skiing levels.T ypically resorts in the Alps do not have loyalty programmes, and GOPASS Ebookers stimulates purchases within the resort (upselling and cross selling). Bonus+ : the travel rewards programme that gives customers more
Le Club Accorhotels Le Club Accorhotels – rewarding What the judges said: customers for their loyalty This programme demonstrates Whittlebury Hall Hotel and Spa ‘me time’ loyalty programme connection away from the slopes. It is “integrating commerce and activity across the whole region, with buy-in from hotels, pensions, merchants, leisure centres, in fact the whole off-piste as well as on-piste experience. Gamification has been integrated and there is feedback on skiing performance. An extremely well rounded programme.”
JUNE 2015 Loyalty Magazine 34 THE LOYALTY AWARDS WINNERS
Loyalty Programme of the Year – mobile
WINNER Highly commended
Vodafone Turkey / Ketchup Loyalty Marketing Turkcell Avantaj Cepte mobile loyalty platform Platinum Application Avantaj Cepte is a mobile loyalty platfrom that puts an end to the complexity of carrying around Turkcell Platinum is a loyalty club for physical store loyalty cards. It has a segmented approach in which the platform recognizes premium Turkcell subscribers. An exclusive customers upon their segments and tariffs, and differentiates the user experience, content club with benefits such as free valet and offers. Since platform partners’ loyalty cards digitally exist on the platform, it enhances the services, 24/7 support assistant, free customer experience and engagement by reaching them at the right time and right place by cinema tickets, and discounts in Turkcell offering only relevant offers from these brands. flagships, premium brands and places. But some of the Platinum members simply weren’t aware of these benefits. More than 90% of them were using smartphones so we decided to reach out to them there.
What the judges said:
Turkcell was narrowly pipped at the post, but it “was the judges’ emphatic recommendation that it
All push notifications are sent according to a strict calendar to touch and trigger members by should receive recognition maintaining non-disruptive frequencies for each segment. Scripts, targeting and tone of voice are for a very strong entry carefully determined for each segment’s particularities, lifestyle and expectations. that demonstrated the benefits of segmenting the customer base and offering exclusive rewards.” What the judges said: FINALISTS
This category couldn’t have been a harder Dansk Supermarked fight which required a re-vote from the judges Winning hearts to arrive at a winner. Vodafone Avantaj came “ MyCheck/ busaba eathai Group out on top against the toughest competition, Busaba Eathai and MyCheck set the and deserves the glory for creating a mobile standard for mobile loyalty loyalty platform that enhances the customer Saudi Telecom Company experience.” Qitaf by STC
MAKRO BELGIUM / TCC Global
Turkcell Turkcell Friday Rocks
Vodafone Turkey / Ketchup Loyalty Marketing Vodafone KaraKartal
Vodafone Turkey / Ketchup Loyalty Marketing RED loyalty programme
Loyalty Magazine JUNE 2015 THE LOYALTY AWARDS WINNERS 35
Loyalty Programme of the Year – Card Based
Highly commended WINNER
Nectar / Aimia PAYBACK / Loyalty Partner GmbH (part of the American Express Group) Nectar, the UK’s most popular From a single point to a whole new world of loyalty loyalty programme PAYBACK is proving a real success in Germany, Italy, Poland, India and Mexico – as a loyalty programme and as a multichannel marketing platform with very efficient and, above all, effective Ikea / Cloudbiz communication channels. Tremendous reach over all communication channels – combined with Ikea’s shopping turns loyal. Cloudbiz personalisation: no other media platform combines retail, online and mobile marketing like launches ‘IKEA FAMILY’ loyalty PAYBACK does. This makes it possible for PAYBACK partners and the advertising industry to realise scheme communication activities with virtually no coverage losses.
Inspire Europe / Mastercard Inspire Europe in partnership with MasterCard Loyalty Solutions
Saudi Telecom Company Qitaf by STC
Whitbread This year PAYBACK is celebrating its 15th anniversary. In 2014, PAYBACK went way more digital Whitbread Restaurants loyalty than before, offering synchronised services on smartphones, via eMail newsletters and even on schemes Facebook. Approximately 40% of the PAYBACK business is digital today.
What the judges said:
An overwhelming victory for an outstanding programme which has experienced 15 years “of continuous innovation, culminating in 2014 which has been its most successful year ever. Launching in new markets, with a strong focus on digitisation, Payback has kept up its extensive momentum as a very impressive card-based loyalty scheme.”
JUNE 2015 Loyalty Magazine 36 THE LOYALTY AWARDS WINNERS
Loyalty Programme of the Year – Coupon or Voucher Based
WINNER FINALISTS
SPAR / i-movo Nicholson’s / Eagle Eye A global brand with a local touch Solutions Ale Trail application i-movo worked with SPAR on its Shop&Win campaign in the summer of 2014, a major initiative by SPAR designed to attract new customers to SPAR stores and increase the visit frequency of existing customers. i-movo provided its Secure Digital Vouchers as a means to enable the distribution of Schneider Electric Turkey / prize coupons to loyal SPAR shoppers. Sanal Magaza Global Loyalty and E-Rewards FAZPUAN loyalty programme
Vodafone Turkey / Ketchup Loyalty Marketing Avantaj Cepte mobile loyalty platform
During its first two outings Shop&Win has distributed over 300,000 vouchers to consumers and given away prizes worth in excess of £250,000. One in every two consumers redeemed more than one voucher which reflects the loyalty to the SPAR brand that consumers feel and fulfils one of the main objectives set out for Shop&Win.
What the judges said:
An interesting customer journey from short code, through SMS to a unique link that “engages and ties in the user.”
Loyalty Magazine JUNE 2015 THE LOYALTY AWARDS WINNERS 37
Loyalty Programme of the Year – B2B
FINALISTS WINNER
DENTSPLY / Stream Comms TRW AUTOMOTIVE / Loyalty Prime LTD DENTSPLY sinks its teeth into loyalty Automotive Diamonds: A European Coalition With 2013 sales of US$17.4 bn,TR W Automotive ranks among the world’s leading automotive Heineken UK / Whynot@! suppliers. The Company, through its subsidiaries, operates in 24 countries and employs Heineken’s Our Shout approximately 65,000 people worldwide. TRW Automotive Aftermarket is a division ofTR W Automotive and is the leading supplier of ‘Corner Module’ parts (braking, steering and suspension) into the global aftermarket. Imperial Tobacco ignite – rewarding the very best independent retail
L’Oreal Dermo Club / Sanal Magaza DermoClub by L’Oreal Turkey
MotoNovo Finance / Performance Bonus MotorV8 REWARDS – promoting positive consumer outcomes
Vodafone Turkey / Unite AlisverisOrtagim Turkey’s first online enterprise loyalty shopping portal Launched in 2014, Automotive Diamonds is a loyalty programme that enablesTR W and other participating manufacturers to directly communicate and engage workshops/distributors with rewards in exchange for product purchases leading to an increase in share of wallet, top of mind awareness of the brand, and deeper penetration.
What the judges said:
The judges were impressed both by the quality and the depth of the communication “in their entry, and the evidence of results they provided in a difficult and hard fought category where the quality of entries was very high. It is difficult to resonate with customers and achieve loyalty in the B2B environment, but TRW has demonstrated clearly that by thinking laterally, this can be achieved.”
JUNE 2015 Loyalty Magazine 38 THE LOYALTY AWARDS WINNERS
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Loyalty Magazine JUNE 2015 THE LOYALTY AWARDS WINNERS 39
Best New Loyalty Programme
FINALISTS WINNER
Dansk Supermarked Gruppen Coalition Rewards Animals of the World take over PINS – The first Shopper Flyer loyalty programme in the world Denmark PINS is the first Shopper Flyer loyalty programme in the world, launched in March 2014.This unique loyalty programme model combines two different types of programmes – traditional frequent Ebookers flyer and coalition loyalty programmes.T he launch campaign enrolled more than 1,000,000 new BONUS+: MORE cash rewards members in less than 12 months!
Ideal Standard/ ZincNet IdealPRO – building loyalty with plumbers
Monsoon Accessorize / Ikano Insight New loyalty scheme driving engagement for Monsoon and Accessorize brands
Morrisons Match & More – Price match and points reward card
Multipont ProgramME Everyday consumers are seeking a truly integrated loyalty card offering and more targeted communication about programme benefits. After discussions with traditional Frequent Flyer Multipont real-time programme loyalty programmes and retailers from coalition-model loyalty schemes, we have joined forces with several existing loyalty programmes and launched a completely new loyalty model – the shopper Piotr i Pawel / TCC flyer programme (SFP).T his type of programme also listens to small medium (SMB) business needs and is open to everyone, rather than focusing only on large businesses. Rio 2 – The Rio Birds visit Piotr i Pawel in Poland
The Saudi Investment Bank / Ketchup Loyalty Marketing Saudi Investment Bank loyalty What the judges said: programme Members can collect PINS from 30,000 Vakıf Emeklilik A.ç merchants throughout the world in this new Vakıf pension company “programme which integrates shopping and flying with impressive results. 1.7 million people have joined the programme in the first 12 months – impressive indeed.T his was a very hard fought category that had to be extensively shortlisted, which shows the vibrancy and freshness of the loyalty business.”
Sponsored by
JUNE 2015 Loyalty Magazine 40 THE LOYALTY AWARDS WINNERS
Best Short Term Loyalty Programme
WINNER Highly commended
Dansk Supermarked Eu. Promotions Winning hearts ‘Il Mondo Coop’ – the bricks that build business Dansk Supermarked, the largest Danish retail company, not only lets customers win hearts (points) in the mobile based Christmas game, but also wins their hearts with an improved image of its No more stickers or cards!! When Unicoop bricks and mortar stores due to its customer interaction.T his results in increased sales online and Tirreno in Italy introduced this unique offline and is achieving an increased market share for the company. building brick programme it proved to be an unequivocal success in achieving its objectives during the crucial November to January trading period: retain and engage with customers, increase turnover and enhance the Coop brand through an innovative, stand-out collector programme.
What the judges said:
Using lego compatible bricks, Il Mondo tasked Dansk Supermarked used insights gained from previous activities and a number of new ideas (e.g. “its shoppers to collect a the addition of points/hearts, employee and supplier involvement) to optimize the award winning mobile Christmas game from 2013 to beat all KPIs set.T he initiative uses gaming mechanisms, ‘town’ by shopping at virtual vouchers and incentives in a true multichannel experience. Unicoop stores throughout a nine-week promotional period. By partnering with specific partner brands, it established strong What the judges said: consumer engagement with over 75% redemption. This programme narrowly missed winning Quite an achievement.” the gamification category and thoroughly “deserves to be on the winners podium. It FINALISTS demonstrates how powerful gamification can COOP Switzerland/ be when used for a specific period, such as Brand Loyalty International the lead up to Christmas. By concentrating on Disney Cooking emotional engagement as well as excitement, Cable & Wireless Dansk has produced a great campaign.” Happy to Give
Dansk Supermarked / TCC Animals of the World take over Denmark
MAXIMA LT Dormeo Primavera by Agne Kuzmickaite
Piotr I Pawel / TCC Rio visits Poland
PENNY ROMANIA / TCC Global Penny Romania Pyrex knives
Loyalty Magazine JUNE 2015 THE LOYALTY AWARDS WINNERS 41
Best Long-Term Loyalty Programme /// New ///
FINALISTS WINNER
Aswaaq TANI aswaaq loyalty programme “wafa” Paro, Turkey’s first coalition programme Tani’s Paro, the first and largest coalition loyalty programme inT urkey, was launched in 2006 Avios to create a consolidated customer database to enable cross sell and upsell marketing activities, The Avios journey incremental revenue and loyalty. Today Paro’s services have expanded outside of Koc (the top industrial conglomerate in Turkey). With the CRM services it provides, its rich database, its flexible CRM infrastructure and operations, Paro builds a strong bridge between the member companies Eurostar International and their customers. Frequent Traveller
SUBWAY / Havas helia Delivering long term loyalty in Europe
Turkcell Smart Women’s Club
Vodafone Turkey / Ketchup Loyalty Marketing RED loyalty programme
Until 2014, Paro mainly consisted of point and discount schemes. After conducting customer surveys and analyzing the latest trends and expectations, in 2014 a new Paro world was created. Aiming for an emotional connection, Paro placed ‘Human’ at its centre with a sensitive and innovative philosophy. With this approach, the new ecosystem of Paro began to create customized offers for every different life stage of their customers. awareness of the brand, and deeper penetration.
What the judges said:
Tani Paro is Turkey’s biggest coalition loyalty programme and has 19 million “members. The judges thought this was an oustanding entry demonstrating longevity in a market that is in a constant process of change, with excellent results for a large coalition scheme over nine years of use.”
JUNE 2015 Loyalty Magazine 42 THE LOYALTY AWARDS WINNERS
Loyalty Magazine JUNE 2015 THE LOYALTY AWARDS WINNERS 43
Best Programme of the Year – European Union and Turkey
WINNER What the judges said:
PayBack Payback has shown continual innovation A success since its launch in Germany in 2000, PAYBACK marked 2014 over its 15 year history, culminating in a by taking on major new partners such as REWE (food & retail) and Thalia (books & music). The coalition scheme also pushed its digital “highly successful 2014 when it introduced transformation process internally and in terms of customer offers, and new partners both online and offline, increased its number of online partners from 400 to over 600. At the same time, it focused on the core customer base to grow loyalty and embraced digital even more than before and increase their usage of PAYBACK services. synchronised services across all channels. A clear winner.”
Best Programme of the Year – Central and Eastern Europe
WINNER What the judges said: Tatry Mountain Resorts Tatry highlighted the integration of GOPASS created the first truly digital ski resort in Europe to improve the core skiing experience. It combines e-shop (remotely loaded ski pass) commerce and activity across the whole with a loyalty programme and several other main features.T he ski pass region, with buy-in from hotels, pensions, can be bought and loaded onto GOPASS at hotel receptions, and GOPASS “ merchants, leisure centres – in fact the also functions as a Wallet, an in-house couponing system, an e-shop, an event ticket and a means of direct communication with customers. whole off- as well as on-piste experience. An extremely well rounded programme.”
Best Programme of the Year – Middle East & Africa
WINNER What the judges said: Dubai Police Dubai Police wins the regional category for Dubai Police has introduced a hugely innovative programme using its innovation, ingenuity and use of technology gamification and cutting-edge video games technologies to create virtual incidents ranging from crime scenes to traffic accidents to to connect, inform and educate.” hostage scenarios. These require SWAT planning and intervention in an “ engaging way that mimics real-life situations to allow its trainees to learn-by-doing to harness their skills in a safe and practical environment.
VICTOR LUDORUM
WINNER
PayBack Over 200 entries, in 23 categories honed down to the prestigious Finalists, and then the Winners. Now we announce the entry that the judges have agreed stands out as the Victor Ludorum –T he Loyalty Champion of the Year 2015.
Sponsored by
JUNE 2015 Loyalty Magazine 44 THE LOYALTY AWARDS WINNERS
PERSONALITY of the Year
I believe that people want more than just clever tricks, they want to “really connect with the brand.” Helene Brand, Personality of the Year (pictured far left)
Loyalty Magazine JUNE 2015 THE LOYALTY AWARDS WINNERS 45
PERSONALITY of the Year
Just marketing wasn’t enough for Helene Brand
Helene Brand, marketing and CSI manager for MySchool MyVillage MyPlanet, is the 2015 winner of The Loyalty Awards Personality of the Year.
Helene says she knew from the start of her career that just marketing a product would never be enough; she wanted a job where she could make a difference. Working for the Woolworths-owned MySchool MyVillage MyPlanet, which is South Africa’s largest community fundraising programme, she merges the roles of brand and customer builder for the company’s partner retailers with providing much needed resources to schools and charities lacking funds. In one recent project, consumer contributions through their MySchool MyVillage MyPlanet cards have provided portable lap desks for 7,000 school children who would otherwise have nothing to write on.
What has been your career path? How has the MySchool MyVillage Helene Brand: A lot of people I trained MyPlanet business grown? with wanted to work with ‘sexy’ brands. I MySchool is part of the Woolworths Group wanted to do something that mattered. of companies, a major retailer in South My first job was for an alternative health Africa which gives us the benefit of a major pharmaceutical company which was one organisation supporting the operation. The of the first in super food supplements, and programme was started by a Johannesburg concentrating specifically on children’s based parent for fundraising, solely health. I found I really enjoyed engaging focused on providing individuals with the with customers directly, and learning opportunity to support their local school more about the ethics of business.T he every time they shopped, but expanded to industry was highly regulated so it was a assist “villages” and “planets” around 2007 challenge to build imaginative and exciting due to the vast and growing need in South marketing campaigns within these Africa, hence it is now called MySchool constraints. MyVillage MyPlanet.
When did you move to MySchool How does this work as a business MyVillage MyPlanet? and a charity? In 2008, I took the job of brand manager. The loyalty programme is business led, The brand was doing well but not so it has to have a real benefit both for amazingly. It had been around for 11 years Woolworths, and our many other business at that stage, and I remembered my partners [that include Toys R Us, Bidvest mother having a MySchool MyVillage Waltons, Reggie’s, Engen and Altech MyPlanet card when I was at school. It was Netstar]. At the same time it is a significant doing some good, but it wasn’t resonating fund raiser in South Africa raising more with a younger audience. There was a lot of than R1m every week for schools, charities work to be done to reposition the brand. and environmental organisations. Continued on page 47
JUNE 2015 Loyalty Magazine 46 THE LOYALTY AWARDS WINNERS
Loyalty Magazine JUNE 2015 THE LOYALTY AWARDS WINNERS 47
Continued from page 45
How does the scheme work? difference through a Customers who swipe a free MySchool win-win relationship. MyVillage MyPlanet card at partner retailers can choose up to three beneficiary How personal do you projects (schools or charities) which then get with the feedback? benefit from funds passed to them by the This is my next retailers. Over 8,000 schools are registered challenge – to get with the programme and 630 charities. 1-to-1 communications It is estimated that over R4m (more than Living Standards Measure (LSM). The LSM right so we can tell people exactly what £200,000) is raised each month. is one of the most widely used marketing is happening in their chosen project. We research tools in Southern Africa. It divides send out a newsletter with feedback about What have been the toughest hurdles? the population into 10 LSM groups.T his all our projects. I want to achieve 1-to-1 Initially the marketing strategy and its goes from one (the bottom) to 10 (the top). marketing for one million people: that’s my implementation was a blank slate. We The LSM is a unique means of segmenting next big goal. had no bulk communications method, the South African market. It cuts across few processes and no social media or race and other techniques of categorising What other challenges do you have? digital support. We needed to build quality people, and instead groups people using The ‘why?’ resonates with me. It is currently relationships with our partners. There was criteria such as degree of urbanisation and a frustration. I don’t want to just know a lot of legacy to clean out. We worked as a ownership of cars and major appliances. ‘what’ someone did, but ‘why’. Marketing team, with particularly strong ties between is not just about the data, it requires a marketing and sales. How many people are you aiming at? fine tuned and deep understanding of the There are currently over 850,000 people customer. I want to know my customers so What next? actively using the card. We believe it is well that I understand the ‘why’ questions. It took about a year to set up the basics perfectly possible to reach the one million and then in the next few years we refined mark of active card users in the next year. Do you have any frustrations? how we worked and the processes. We Data doesn’t mean insight. Sometimes added more schools and charities to our Give me an example of the good your it is necessary to go and talk to people to list of recipients. It took a year at least projects can do? gain that. There is never enough time – to do the thinking, the planning and The Thuso Fund for Schools and Charities either for this, or to really think through a the cleaning up. Now we are focused on helps under-resourced and disadvantaged problem. Life is moving so fast, and one has gaining quality data and insights that will children. It supports special projects that to make instant reactions, so it is necessary help our partners, so we are working on address school and learner needs, such to anticipate, and technological innovation a strong digital strategy and developing as providing stationery, library books, and makes this very difficult. ambassadorship. I believe that people want repairing school facilities. We recently more than just clever tricks, they want to provided 7,000 portable lap desks and Who and what do you admire in loyalty? really connect with the brand. helped build a food garden to supplement PINS is a programme that impresses me. a feeding scheme. It is doing an amazing job of energising You gave “cleaning up” as one of your In my opinion it doesn’t work when loyalty in what was presumed to be tasks in the first year. What do you you give people the choice of giving their a saturated market by looking at the mean by this? loyalty points or vouchers away to charity. proposition in a new way [shopper/flyer]. It is an ongoing requirement to clean and They don’t choose the charity. We allow A person I admire is Susan Broer of Marks manage the database so that we can customers to choose their own special & Spencer. She is a woman with a clear connect properly. Data quality is one of recipient, which could be a hospice, an vision and a person who can put that our biggest assets. I like to think that I can orphanage, a school, or even a home for vision into action. I will be watching her “speak IT”, which is a huge advantage. It sick animals or a charity for wildlife. In this achievements with great interest. means I can make sure the IT department way consumers become engaged with And Amazon continues to impress me feels part of the team and understands something that really matters to them. because it has stayed nimble and is always what we are striving to achieve. raising the bar on customer expectation Is there a conflict between business and delivery. What are your goals now? and charity for you? Penetration into the target market, No. I am in the business of business. Should loyalty points expire? especially the younger customer segment. The companies we are growing may be Our scheme uses cash donations, not profit making enterprises, but they are points collection, but yes, I think they How do you define this? also aligned with the ethics of MySchool should. If customers are not engaged Our key target is customers within the LSM MyVillage MyPlanet. We are not a charity, and redeeming, then the relationship is 8-10 bracket. In South Africa we talk about but we can and do make a tangible stagnating.
JUNE 2015 Loyalty Magazine 48 THE LOYALTY CONFERENCE FFPs crucial to airline business case Loyalty marketing is now a multi-billion dollar revenue stream
Air loyalty is now crucial for generating “Issuing a mile is like issuing a bond, a profit according to Bunyamin Topcu, a very good way of financing for airlines,” consultant and formerly a strategist at says Topcu. “The miles last a long time. Only Turkish Airlines. 20% are redeemed in one year, and 10-20% of miles expire which is profit.” peaking at The Loyalty Conference Although some carriers such as Delta S– Lessons from the Winners event, Airlines have switched their loyalty Bunyamin Topcu said there are 1,800 schemes to a model that rewards the airlines in the world and they have largely highest spending passengers, Topcu struggled financially over the last two says distance-based accrual remains the decades with profits well below those of fundamental metric. other industries – although recent fuel Members converting miles into cash by price falls have improved the situation. A redeeming them at partner companies rueful Richard Branson did once remark: “If can be a major profit generator for airlines, you want to be a millionaire, start with a with United Airlines Mileage Plus scheme billion dollars and launch a new airline.” this to 50% which is incredible. Loyalty having a profit ratio of 84% (see chart 2). Topcu says frequent flyer programmes programmes are often managed better Co-brand partnerships are very important (FFPs) are a major contributor to airline than the airlines.” for airlines and a crucial vehicle to profitability in a highly competitive The programmes stimulate both direct generate and accelerate miles earning industry, and loyalty marketing is a multi- and indirect revenue. Direct through for passengers. “Credit card users have a billion dollar revenue stream for the travel selling miles to partners, co-brand credit high correlation with A+ customers and sector. If a flight is lower than 70% full, card partnerships, and selling miles to very frequent flyers,” saysT opcu. “Monthly reward tickets are an incremental revenue members. Indirect via repeat purchases, purchases are much higher than for non- that stimulates members to buy. cross-selling and up-selling, and campaign cobrand cards.” While FFPs can be a huge potential management. contibutor to airline revenue, there are also The most important ancillary revenue a number of ways they can fall short in from FFPs for airlines is direct sales of miles generating profits: to partners such as banks and grocers. The sale of FFP miles accounts for 50% of Today’s • A low value proposition of miles/points airline direct revenues (with sales to co- (lack of leverage effect) brand credit card partners being especially • Restricted accrual and redemption significant), followed by services such as Frequent Flyer options for members onboard and website retail sales (30%) and • Lack of understanding by loyalty baggage fees (20%). marketers of the financials of the “You need loyalty programmes to Programme programme management. increase retention,” says Topcu, who adds • Limited airline and non-airline that establishing partnerships with other Market partnerships (especially co-branded companies helps airlines to improve this cards) retention. • There are over 400 million unique • Rewards that aren’t attainable for the The Qantas programme generates frequent flyer programme (FFP) customer US$1.273bn in revenue from direct sales of members around the world • Loyalty not part of the business culture miles to partners, representing US$45.67 • There are 15 trillion unclaimed miles per passenger (see chart 1). in the marketplace If these pitfalls can be avoided the • 17% of all miles/points in FFPs are rewards are huge, according to Topcu. Generous FFPs never redeemed “In today’s very competitive airline FFPs are the most generous loyalty • The Air Canada programme industry, 5% profit is very high,” he says. programmes in the world. They have high- represents 12% of the airline’s total “You can get profit rates of 30% for a level and business members, so it is more revenue. loyalty programme and maybe increase expensive to acquire those customers. Source: AndLoyalty Consultancy
Loyalty Magazine JUNE 2015 THE LOYALTY CONFERENCE 49 airBaltic partners with PayPal Link offers no-fee flight bookings
$45.67 atvian national airline airBaltic has Lpartnered with PayPal as the secure payment ecosystem provider on its SeatSale campaign. $33.92 The campaign was active until April 15, and after this time until April 30 all customers who booked a flight and paid with PayPal did not have to pay airBaltic transaction fees. The Latvian flagship carrier said it had linked with PayPal to offer unique travel opportunities to customers $12.39 interested in international trips to any $9.20 of its 60 destinations. $4.77 $5.78 Air GOL LAN/TAM Qantas South Virgin Canada African Atlantic
Chart 1: Direct Sales of Miles to Partners (US$/passenger)
Chart 2: Profit Ratios for Airlines of Converting Miles into Cash US air United AF/KLM SAS Singapore Mileage Plus Flying Blue Eurobonus Krisflyer schemes 84% 82% 82% 81% merge Card offers range Delta Turkish American Emirates Skymiles Miles&Smiles Advantage Skywards of new benefits
80% 79% 77% 73% merican Airlines says that its 30 Amillion AAdvantage reward scheme Source for charts: AndLoyalty Consultancy/Bunyamin Topcu members have been migrated to the US Airways Dividend Miles scheme in a move that creates a near-100 million member programme. Reluctance to switch The two carriers merged in 2013 to create the biggest global airline. Airlines have the lowest level of loyalty of major industries, Forrester Research has The new programme will link found, with only 62% of customers reluctant to switch.T his means that 38% will frequent flyer status to distance flown. switch. This is compared to 80% reluctance to switch in retail (the most loyal sector). This goes against the recent trend of Airlines are 3% behind the second worst industies for switching (Hotels and PC rewarding passengers by how much manufacturers). they have paid for a ticket.
JUNE 2015 Loyalty Magazine 50 THE LOYALTY AWARDS & CONFERENCE
The Loyalty Awards 2016 London, 7 June
TO DO LIST Put Tuesday 7 June 2016 in your diary Think about what you learned at the for the Awards gala evening 2016. 2015 Loyalty Conference and use this to run your loyalty programme better. Look out for the launch of the Call for Entries 2016 in October 2015. Subscribe to Loyalty Magazine to make sure you don’t miss any valuable Visit the Awards website regularly to stay information. up to date: www.theloyaltyawards.com Congratulate your team if they helped Ask your team to work up a plan for your you to win or achieve Finalist status this Loyalty Awards entries for 2016. year, and incentivise them to do even better for 2016 by offering them a chance If you won in 2015 – very well done! Be sure to book your tables in advance to attend The Loyalty Conference in April We had over 200 entries and competition to get a good position. 2016 in Istanbul. was fierce.
Think about which clients you want to Make sure you get your Loyalty Awards To those who were finalists. Don’t invite and ask them early. entry in before the closing date of 26 be disheartened. This was a fantastic February 2016. achievement.
A very special event The Loyalty Conference 2016 Istanbul, 20-21 April New Frontiers
If you took part in the 2015 Lessons from the Winners conference, you will know that the 2016 event promises two days packed with learning, expertise, discussion, networking, ideas sharing, workshops and case studies. And it’s in Istanbul!
We guarantee the best of the loyalty industry as speakers, in one of the world’s great cities, with wonderfulT urkish hospitality. www.theloyaltyconference.com
Loyalty Magazine JUNE 2015
Two events One date October 6, 2015
6 October 2015 / The Roundhouse, London The Mobile Innovations Awards recognises and celebrates the exciting, the ground-breaking, the innovative and the successful. With categories that include mobile marketing, gamification, technology, the internet of things, user experience and loyalty, The Mobile Innovations Awards demonstrates extreme innovation and inventiveness in a business context. Join an impressive audience of high level decision-makers for an entertaining, useful and enjoyable evening. Meet those who made the shortlist of over 100 entries and network with the best of those using mobile in a commercial setting. Tonight’s finalists are among the brightest examples of next-generation innovators across the market... they’ve moved beyond the ‘norm’ and have been expanding @Katerussell boundaries with their spirit of creativity, risk There is a real buzz taking and high customer touch. in the room at the #TMIAwards :) Kelley Knutson (pictured top left) executive vice president, international services, TSYS @Mobile_Awards Book your table today for a truly spectacular evening www.themobileinnovationsawards.com
6 October 2015 / Be part of the future The chance to Join an exciting line up of industry innovators Prime sponsor Media partner to discuss tomorrow’s mobile opportunities in the context of what is happening today.
A new title from the McIntosh Media Group supporting the Mobile Innovations Awards • Connect with customers • Encourage sales and bookings
Comment /5 • Provide an omnichannel approach News /7 Moboids /37 category sponsor People /41 Events /43 • Enhance the User Experience • Join together the parts of a business still in silos
Possibilities • Discuss things you probably haven’t thought of yet Unlimited Book your places today – or for more information It’s time! /17 www.themobileinnovationsconference.com