Demotion in Loyalty Systems

Loyalty systems big flaw.  by Roger Dooley. Our brains in particular do not like demotion.  I remember my own particular example with Delta Airlines. After years of flying globally and reaching the highest platinum levels, I retired, minimized travel, and was kicked down to the lowest 'asphalt' level, it seemed.  Now I am as disloyal to Delta as possible.  Has that demotion process been included in their models of business?  Somehow I don't think so.  The article also talks about minimizing the damage.

Kelloggs Loyalty Program

In AdAge:  A considerably complete program for tracking loyalty.    " ... Kellogg's loyalty program brings in data on 90% of its products  ... Kellogg's Family Rewards loyalty program, which counts 3.5 million members, allows the brand to collect item and store-location data across 90% of its product portfolio in the U.S. The biggest obstacle to using a brand-based platform is "the current marketing structure and dependency on brand funding to run programs," said Maria Keller, Kellogg's director of application solutions, digital marketing and IT ... " 

Loyalty Via Social Intelligence

Interesting piece from .....  Susan Ganeshan, Chief Marketing Officer at newBrandAnalytics,   writes .... " ... Various industries use social intelligence to make strategic business decisions in a number of ways. Whether making large-scale decisions like how to spend a small budget or selecting a location for a new retail store, or even small decisions such as brand refreshes or uniform updates, social media plays a significant role in the decision-making process. ... " 

Supermarkets Dropping Loyalty Programs

In Time:  Numbers of people in the programs are still increasing, but number of programs are decreasing.  A fairly extensive article about this mini trend.  Customers concerned about data privacy, and the sheer inconvenience of carrying and fumbling for multiple loyalty cards.  Though the latter could be solved by carrying more of them in digital form on a smartphone.  This still does not seem to be common practice.  If this continues it will change the kinds of data we can gather.

Loyalty and Gamification

We worked with several applications using game dynamics in our enterprise.   So I have been been involved in the concept for years.  I have given several talks on the subject.   I had a conversation with Rajat Paharia, CEO and founder of Bunchball,  about the idea a few years ago.   I was struck immediately with two aspects of his new book: Loyalty 3.0: How to Revolutionize Customer and Employee Engagement with Big Data and Gamification   

     First is the introduction of the new term Loyalty 3.0 and the second was the integration of the concept of Big Data as it can be used by what are called gamified systems.  I had not thought of either of these concepts as closely related.  Paharia does an excellent job of linking gamification with theses ideas.  He also introduces the basic concept of gamification itself.  It is not as is often expected, about playing games to solve problems, but is linked to the  " ... spark of adding gamification mechanics to systems we want to enhance .. "

He goes on to carefully describe what each of these mechanics are and how they add to a Loyalty 3.0 engine for interaction with groups of people.  He also dissects different kinds of motivation and how this is key to create engagement and loyalty.   He presents the five basic motivators that can drive this.  The first 91 pages of this book do an excellent and very readable exposition.

So where does Big Data fit in?  It provides the value added element for your stronger,  higher quality, longer lasting engagement with the participant.  It produces value based on the analytics which uses the data gathered.    This results can then be feed back to the user to enhance their motivation to achieve the goals of the system.  The integration of these elements is a clever insight.

The idea is only as good as it works in practice.  We learned that with our own experience. After page 91, in a section called execution, the book provides a number of recent  examples.  Classified as case studies in customer engagement, skills and learning and employee engagement.  Despite my own research in this area, I knew only a few of the examples, so I found this very useful.  Each of the case studies is then related back to each of the building blocks of motivation and gamification mechanics.  Business benefit is directly included.   Pass this book on to management with key sections highlighted.

I particularly like the examples of LevelUp for training customers in Photshop, and Nitro for engaging employees to interact with Salesforce.  These related well with domains we experimented with.  Lots of additional examples.

The final section, on Direction, talks about how to put together gamification projects and form organizations to do this kind of work. Lots of good suggestions that are applicable to any large project, but directly related to motivation and game mechanics.  And the use of resulting data and analyses that result.

An easy read,  non technical, lots of examples, good tips and relevant project management discussion.   Heartily recommended for both management and the analyst be introduced to these concepts.

See also the Loyalty 3.0 site, with more examples..   And on Twitter.
Additonal white papers and video at the Bunchball site.

Discarding the Loyalty Card

Albertson's drops the loyalty card.  With all the data being generated by loyalty ideas, and new ones blooming, some retailers are moving the other way.  And some very large retailers don't use them at all.