“I’m a consumer. Why should I keep coming back to you?”
The question comes from Mastercard‘s Loyalty and Engagement President Francis Hondal as she addressed the changes brought to consumers as a result of the pandemic and changes that need to be made in loyalty programs designed to attract them. Hondal said she believes it’s time to reimagine loyalty programs for 2021, especially the element of loyalty rewards.
“Points have always been important, and they’re still relevant because they’re easy for consumers to understand because they’ve been around so long,” Hondal said in a conversation with PYMNTS Karen Webster. “But the reality is that the consumer experience itself is the new currency in loyalty.”
Whether it is with a small, medium or mega-sized merchant, Hondal said businesses need to reimagine their loyalty strategies to manage customer experiences and ensure that they are consistently delivered throughout the organization. At a time when some online businesses are seeing 50 percent, 60 percent or even 70 percent traffic growth during the pandemic and holiday shopping season, the evidence — and timing — for improved loyalty efforts has never been more clear.
But although department stores can “drive spend” by displaying tempting items near their checkout lines to entice shoppers to make last-minute impulse buys, Hondal said reimagining the same experience online is completely different.
“It must be more than points or the cash discount,” she said. “It needs to be about the whole experience and my relationship with you as a brand. And I think it becomes even more important through digital channels.”
That’s because all consumers are interacting with all sorts of brands all the time, and the ease of interaction is continuously raising the bar for businesses. As much as offering some kind of value is a constant, new era loyalty is about the personalized experience complemented by what you sold and how you sold it. In short, it’s about how you treat the customer before, during and after the sale.
While running a modern loyalty and rewards program requires a degree of data and analytical skill, the good news is that the digital era has made that easier than ever.
“It’s a great time to be in loyalty because digital commerce allows for so many more interactions with consumers,” Hondal said. “It gives you so much more information in terms of what’s working, what’s not working, which I think is a great opportunity.”
Do Good, Stand Out
With the travel-related perks of yore essentially being turned upside down as a result of the pandemic, Hondal said it’s time for businesses to embrace trends that are relevant today and reflect what people want and need. One such benefit is the recent shift toward so-called “do good” rewards that support the local community and businesses.
It’s all about being pragmatic, Hondal said, through the use of old-school cause-based marketing that emotionally connects with and matters to consumers now more than ever.
“You used to go shop and have to get in your car and go to three different retailers,” she said. “Today you go click, click, click, and you’re in three different retailers in less than 10 minutes. So, this notion of, ‘I have to actually stand out’ and ‘I have to be the one that you’re going to come back to,’ is more important in this environment that we’re living in.”
She said simple things like sending a “thank you for giving me your business” note is old-school marketing at its best — and it works.
“Know me, first of all, and recognize my loyalty,” she said.
Hondal said developing the right consumer value proposition is basically a question of, “Am I giving the consumer what they need today?” adding that “providing relevant services is critical.”
For example, with the pandemic surging, Hondal said people are nervous about their health and safety, and they want peace of mind in an environment like this one.
“It is what it is. So how are you going to help them?” she posited, before answering her own question. “Everybody pivots. We’ve pivoted from travel to virtual experiences, cooking classes, museums. We’ve pivoted our concierge services, in some countries, to medical support for [small- to medium-sized businesses (SMBs)] and consumers,” which she said is really about helping people and enabling access to the things they want.
In addition to being relevant, Hondal said businesses also have to mind how they are communicating with consumers, getting them the relevant information, and ensuring that everyone from frontline service reps to marketing teams are on the same page.
How To Proceed
“Customers ask us, ‘How do we do what you just described?'” Hondal said, noting that a lot of it is based on a strong data management strategy complimented by very sophisticated artificial intelligence (AI)-based modeling. “You’ve got to bring those together, and that is what we’re bringing to the market.”
Hondal said because Mastercard, at its core, is a global data company with expertise in payments, it is able to deliver loyalty and rewards advice that can help businesses of all shapes and sizes.
“It’s a win-win for everybody,” she said of programs that retain consumers, while boasting sales for merchants and the banks. “So, we are able to deliver something differentiated, something relevant, that also drives spend. That’s where we sit in the ecosystem.”
After all, with marketing budgets facing scrutiny, she said it’s important right now that those dollars are delivering the highest return on investment.
“It feels good when you can do things for small businesses or when we can help our customers who are in distress by helping them think about new ways of recovery and marketing strategies,” she said. “It’s good, it’s fulfilling and it’s fun. It really is.”