HelloWorld is a digital marketing solutions company that specializes in strategizing for and developing loyalty programs. The company offers promotions such as sweepstakes, games, trivia, contests, and polls to spark engagement with customers. It helps brands build loyalty programs to reward customers and create brand advocacy. In addition, it collects customer data to generate insights and enables communications across channels. Its platform offers custom software development, hosting, and analytics.
Recently, Loyalty360 sat down with Michela Baxter, Senior Director of Loyalty at HelloWorld, to discuss customer loyalty, loyalty activation, and internal socialization.
How does your organization define customer loyalty?
We view customer loyalty as devotion to a brand—something that is in a constant state of change and requires attention and care. This is distinct from a loyalty program. In our view, loyalty programs are one way to nurture brand devotion and motivate customer behavior.
What does it mean to "activate" a loyalty program?
At its most basic level I think activate means motivating customers to interact with your program. The type of activation can vary widely by industry or by brand objective. At a macro level, program activation should align with the program objective and value proposition. Micro activations can drive people to specific behaviors the program wants to encourage, like using mobile payments or engaging with content.
What are the best strategies for activating loyalty programs?
Any strategy that comes from a core customer need and delivers the program's value proposition is the best strategy for activating a loyalty program. There is no one prescription for activation.
Do strategies differ with different industries?
Strategies should differ by industry and could even differ by brands within industries depending upon the competitive differentiation the brand wants to drive. Our 2017 Loyalty Barometer report showed that customers do have varying expectations about how they interact with brands among different verticals. For example, sending instant rewards or discounts could be one way to activate customers in a loyalty program. Two-thirds of respondents in our report said that this makes sense for retail programs, but only 40 percent felt that it belonged in travel programs.
What is the biggest challenge you are seeing regarding ineffective loyalty programs?
Far and away, lack of customer value is an issue among programs. But value is subjective and can be viewed as both tangible and emotional value. When customers aren't finding value they won't interact with your program.
When you look at successful loyalty program processes, what do you see?
I see two things: top-down alignment on program direction and investment, and viewing a loyalty program as one element in the customer experience that can help build overall brand loyalty.
How important is internal socialization to customer loyalty programs?
From my experience, programs that are managed in silos are not set up for long-term success. Socializing the program is important, but more than that, getting people to come along with you as partners in your vision is critical. Brands should develop internal communications plans to support their program, so that they can build excitement and get their colleagues invested in program success. Brands that have programs that depend on frontline employees to acquire new members need to invest in training to educate employees on program benefits.
Do more effective programs have different internal "markers"? If so, what are they?
Successful programs have executive sponsors. It's always a red flag for me when a client is pursuing a loyalty solution without executive buy-in. Managing an on-going loyalty program has significant customer, financial, legal, and operational implications. Loyalty marketers will need executive support to get over the many internal hurdles they will face when launching and managing a loyalty program.
What factors keep one loyalty program alive compared to others?
I think the most important factor is the value proposition. If customers are not finding value in program participation, whether it's financial value or emotional value like convenience, they will drop the program from the short list of programs they actively use.
Why is gamification important to loyalty programs?
Motivating behavior is what is important to loyalty program success. Gamification can help motivate behavior, but it isn't the only way and isn't right for every brand. Gamification can be a worthwhile strategy particularly for customers who are emotionally motivated toward things like mastery and purpose. For customers who primarily seek extrinsic rewards like discounts, pursuing a gamification strategy may not achieve the results the brand wants.
What are some examples of gamification driving measurable results?
The annual Starbucks For Life campaign, now in its 4th year, has been a very successful overlay to Starbucks' rewards program. While Starbucks For Life has evolved over time, the basic premise of the campaign uses challenges to motivate purchase and engagement with Starbucks over the holiday season. In 2016, Howard Schultz credited Starbucks for Life with driving "customer traffic and increasing Starbucks Rewards membership." The brand's continued investment in this holiday campaign, and expansion into summer campaigns, signals that gamification is working for them.
Are there better ways to use and talk about data that can create more engagement?
Marketers tend to make decisions based on customer trends and averages. I think there are really interesting insights to learn from data points that land outside of trends. I would encourage marketers to look at the outliers, get to understand the underlying behavior, and identify ways to drive engagement from them.
How does your technology and consulting help to "activate" these customers?
On the technology side of our business, we have core products such as sweepstakes and instant win games that can be used to create the micro-activations that drive to a specific objective that I mentioned earlier. Our core loyalty platform can help brands build the macro loyalty activations and deliver value to its customers. Our team of consultants are the ones who come up with the ideas and experiences that layer on top of these technologies and bring the loyalty activation to life.
What works best: points-based programs, experience-based programs, surprise-and-delight programs, others?
Like many things in loyalty, it depends. Brands need to understand their customers, what motivates, and how they want to interact with the brand. Brands must balance this customer knowledge against its objectives, budget, technical capabilities, and competitive position and make a strategic decision about what program structure will resonate with its customers and achieve its objectives.
If you could ask a competitor one question, what would it be?
How is your company moving "loyalty" forward?