Category Archives: Customer Network Strategy

Four actions CMOs should take immediately

Chief marketing officers (CMOs) and marketing leaders face an uncertain and rapidly evolving situation as a result of the coronavirus, and they must take an aggressively proactive approach to preparing their organization for disruption, according to Gartner Inc. This article is copyright 2020 The Best Customer Guide.

CMOs must take immediate action in monitoring customer channels for unexpected and quick changes to customer behavior and purchasing needs, and prepare for potential disruption to budgets, plans, campaigns and strategy in the months ahead.

“CMOs who wait for shifts in customer perceptions and needs, interruptions to supply chains and operations, or restrictions on mobility, travel and mass gatherings as a result of the COVID- crisis will only increase risks to their organizations and miss potential opportunities to build customer loyalty,” said Augie Ray, senior director analyst at Gartner for Marketers. “The key to managing risks and finding opportunities in such a period of significant uncertainty isn’t to predict a single likely outcome, but to recognize the range of possible scenarios.”

Gartner recommends CMOs and marketing leaders take the following four actions to better prepare their organizations for disruptions related to the coronavirus COVID- crisis:

  1. Build COVID- Contingency Plans
    The key to mitigating risks associated with COVID- and identifying opportunities is rigorous scenario planning. Marketing leaders should create three scenarios, spanning from best- to worst-case, and consider the potential impacts to customers, the marketing team, and brand strategies and tactics. While scenario-planning, it is prudent to coordinate with functional leaders across the organization in legal, finance, supply chain, IT and operations.
  2. Monitor, Report and React to Shifts in Customer Behavior
    Maintaining customer-centricity is of utmost importance during times of stress, greater needs and quickly changing expectations. Marketing leaders must not only monitor customer values and sentiment against a global backdrop; they should also improve real-time listening to detect shifting customer sentiment so they can react immediately. In addition, as marketing leaders make decisions, they must carefully weigh short-term interests versus the value of sustaining and nurturing longer-term customer relationships during this time.
  3. Prepare Marketing Teams for Interruptions and Challenges
    The actions that marketing leaders take now will set the tone, internally and externally, for how the organization will weather the crisis. From an internal perspective, it’s important that marketing leaders anticipate how business disruptions will impact existing marketing operations and formulate strategies to protect and adjust budgets. In addition, CMOs must assess the needs of employees and prepare for alternate workplace operations. Externally, marketing organizations should be ready for rapid changes toward at-home and digital delivery of products and services. Marketers must also consider changes that may need to be made to customer policies and procedures to stay attuned to the empathy that customers need and expect.
  4. Review Marketing Plans for Potential Impact
    Failure to anticipate potential change to campaigns, promotions, event marketing, sponsorships and other marketing strategies will leave marketing teams in defense mode throughout the duration of the crisis. Marketing leaders’ scenarios should consider how restrictions to events and travel will impact sponsorship activation plans or campaign messaging. The coronavirus outbreak could also have significant impact on the timing of new products or campaign launches, and marketing organizations need to be agile in rescheduling or shifting messaging around these events. To avoid making reactive budget decisions, CMOs must begin to prioritize spending now and brace for rapid budget changes.

Additional information on what marketing leaders should be doing amid COVID-19 has been made available to Gartner for Marketers clients in the report, “Actions CMOs Must Take Now to Prepare for the Impact of the Coronavirus and COVID- Disease”.

This article was first published by Customer Network Strategy. Permission to use has been granted by the publisher.

Shoppers are now prioritizing convenience and value

Despite the persistent threat of a recession, consumers remain confident about their financial well-being and are contributing to CPG sales growth, according to IRI’s Q4 2019 Consumer Connect Survey. However, as consumers prioritize saving time, effort and money, they are shifting their shopping habits to channels they feel best support them. This article is copyright 2020 The Best Customer Guide.

In the full report, entitled ‘Channel Trends in CPG Today’, IRI analyzes how this shift is affecting consumer shopping channel preferences and in-store behaviors. Joan Driggs, IRI’s vice president of Content and Thought Leadership, explained: “Despite an atmosphere of economic uncertainty, consumer confidence and outlook remain favorable. The optimism we recorded in our Consumer Connect survey is likely to have a positive effect on sales in the CPG industry, which we expect to continue growing incrementally through 2020, and exceed $886 billion by 2021.”

That said, certain channels – such as dollar stores and e-commerce – provide stronger value propositions to customers, and are gaining shopper visits, while more traditional retail channels, such as mass market, supercenters, drug and grocery show declining visits. This suggests that, despite their confidence in the future, consumers are still focused on finding new ways to save.

The index monitors the current financial health and outlook of consumers, differentiating between the sentiments of various income groups, races and generations. The Q4 report revealed that overall consumer confidence has increased by nearly 1% since the Q4 2018 report, and 1.5% against the data from last quarter, overcoming the threat of recession. Fifty-seven percent of consumers reported that they feel good about their financial health, and 73% expressed confidence that their households’ economic well-being would improve within the next six months.

IRI observed the most widespread feeling of financial stability among older generations and high-income households, as well as Asian and non-Hispanic consumers. Millennials and African Americans reported the most widespread confidence that their financial health would improve in the near future.

Shift Toward Convenience and Value
The study observed that consumer demand for convenience and value is increasingly influential in persuading a consumer to shop through a specific channel and at a specific store. Value retailers, which include dollar stores and e-commerce, have seen 1.4 and 6-point increases in penetration, respectively, since 2016.

While consumers still favour traditional channels such as grocery, drug and mass, the penetration in those channels has decreased over the same period, suggesting that they are losing shoppers to other channels. The IRI study also found that, when deciding where to shop, consumers weigh in-store experiential concepts and easy navigation services, as well as price, as heavy motivations for their choices.

“Consumers across the board cited time and cost savings as key drivers of where they choose to shop, which is causing a shift away from the channels that we are used to seeing dominate the CPG space,” continued Driggs. “In particular, we found that heavy shoppers are being attracted to dollar retailers over competing channels, likely because they are looking for ways to save. We expect this will continue to negatively impact sectors like grocery and pharmacy, which have lost their ability to protect and cultivate their core shopper base.”

The ease and value of the dollar channel led consumers to increase the frequency of trips per month and per-trip spending compared to a year ago, relative to competing channels. E-commerce platforms also experienced a greater number of trips, but saw average basket size decrease, as shoppers got more comfortable with the platform and the expectation of quick delivery.

This article was first published by Customer Network Strategy. Permission to use has been granted by the publisher.

How Loyalty can help put your business back on track

The pandemic related impact to the Australian economy is already being felt; airlines to shut down, retailers forced to close, hotels cleared out and filled with returning residents, banks re-focusing to customer support. It’s clear that the ‘stay at home’ measures and the hibernation of many businesses has caused consumers to stop spending. So how does loyalty help these and other industries navigate this health and economic shock?

From a loyalty perspective, BCG have a 4-stage framework which is a useful way to think about it: React, Rebound, Recession, Reimagination. We provide our perspective on how it can be applied.

React (short term)

Most of what we have seen so far in this domain are loyalty program members being hit with two types of messages:

  • A – the useless “Are you ok? We’re here for you” emails: arriving from brands that I hardly remember buying anything from asking if I was OK, or…
  • B – the useful “here’s something to help” emails: from companies who are leveraging their programs to help customers in their hour of need:
    • Foodworks grocery store rolling out special shopping windows for elderly and local residents. The loyalty card (or a pensioner card) becomes the ticket to access the store in the mornings, beating the rush and getting access to in-demand products
    • Nike will focus on digital in regions facing store closures. In the U.S., the digital push includes a “Play inside” campaign, making the Nike Training Club app accessible free of charge and offering up to 40 percent online discounts, free shipping and 60-day free returns

It’s not all positive, there are some punitive measures being introduced – Delta has added some new restrictions to the SkyMiles marketplace. Now only Medallion elite members and Delta Amex cardholders can redeem SkyMiles for merchandise, and the option to redeem miles for gift cards has disappeared entirely.

Rebound (short to medium term)

Brands are recognising that when their business goes into hibernation, so does the customer relationship. Some brands are making big changes to their program to welcome the customer and to be there when the inevitable thawing takes place. This includes resetting the goalposts and providing generosity. Both Virgin and Qantas have extended their status tiers for a year, giving members a reset and extending their tier benefits for when flying inevitably starts again.

Many other programs are extending the points expiry rules, Hilton have paused the expiration of all points scheduled to expire between now and December 31, 2020. Freedom upped their bonus point offers. Cathay is automatically adding monthly increments of points between now and April to get travellers closer to status thresholds even when they cannot travel.

Recession (medium)

Being there for the customer in the post-pandemic environment inevitably means making changes to deal with challenging economic circumstances. Exercising generosity with your program is a likely way that brands will drive engagement with customers. An example is lowering points price on rewards, giving customers an earlier redemption. We also expect to see programs start awarding points for positive engagement, not just sales, posting reviews, blog posts, entering contests with the brand. We’ve seen some other examples already rolled out:

  • Qantas and Virgin allowing redemptions but telling you it could take until after lockdown to receive them
  • Privacy, how you behave now impacts how you’ll be perceived after.
    • Bad: Zoom and Houseparty have both been in the news for collecting personal data (openly – it’s in the T’s and C’s) and sharing it with other third parties.
    • Good: Apple’s evolving brand promise. The old Apple promise was that you don’t have to worry if the tech works. The new promise is you don’t have to worry if the tech is scamming you. Everything Apple showed was about curation, safety and trust. No tracking, no scammy ads, no loot boxes, no weird credit card charges.

Reimagination (long term)

In anticipating this new post-pandemic world and trying to find opportunity in adversity, it’s important to consider several shaping forces: new learnings, new attitudes, new habits and new needs. It’s too early yet to see how loyalty programs evolve as a result (whilst thinking ahead is necessary, surviving the short term is an obvious priority at the moment).

What could we expect to see?

  • A tipping point for card-linking: Allowing customers to link loyalty cards to payment cards
    • E.g. Bink in the UK partnering with Barclays and many retail loyalty programs
  • Digitisation of programs: Overcoming the challenges with physical commerce
    • Move away from physical rewards into digital gift cards and ‘pay with points’
  • Accelerated personalisation of marketing
    • Supermarkets offering double points now to get an unfair share of the spikes now and then have a pre-baked advantage in value coming in the door later (and funded by no specials happening. NZ supermarkets have switched off specials).
    • In tough times, program operators can increase trust in their most valuable customers by making it frictionless to redeem points for cash equivalent rewards. In uncertain times we expect to see a ‘run’ on gift cards as members horde cash but look to avoid risk in their program currencies (remember Ansett!). Rather than fight this, make it easy, perhaps make it a pro-active offer for high status members. In travel programs, when members start to travel again it will be for business first, not leisure so they will not be looking for reward seats/free rooms anyway. But they will remember you helped take away one source of stress from their lives.
  • Subscription loyalty
    • E.g. Amazon Prime for airlines, Airlines selling subscriptions like Air Asia’s now at a discount

Reflecting back to the GFC

There was a polarisation occurring in loyalty during the recovery. Customer loyalty programs boomed as brands doubled down investment in existing customers, and those customers responded to the rewards and incentives. Trade / B2B loyalty programs cratered. These were seen as discretionary so much of the incentives in the channels dried up. It’s a pattern that may repeat; B2C programs become the focus and an important marketing channel to get households back into spending mode.

This article was first published by Customer Network Strategy. Permission to use has been granted by the publisher.

New Generation Z data poses a critical question

Employers and business leaders take note: a one-size-fits-all approach to defining a generation will cost both talent and customers. As Generation Z (the generation of those born between 1997 and 2007) begins to enter the workforce and flex its newfound spending power, connecting with them is critical. This article is copyright 2020 The Best Customer Guide.

To do that, it is important to identify and acknowledge the differences within the generation – something many employers and business leaders failed to do with millennials, to their own detriment, according to Ernst & Young’s ‘Gen Z Segmentation Study’, which confirms bucketing the most diverse generation to date into one simple type, despite their individual characteristics, goals and values, will be a costly mistake.

Gen Z contradicts many expectations
Gen Z is a walking contradiction to society and past youth when it comes to social media usage, core values and politics. Employers and business leaders should get to know the generation before basing plans on stereotypes:

1. Social media
Today’s youth are perceived to be obsessed with their social media activities, and while 84% of Gen Z say they have a social media account, they use it more for communication than for public sharing like past generations. When asked to choose their top reasons for using social media, EY research found:

  • 80% of Gen Z use social media to connect with family and friends
  • 72% use it to satisfy boredom
  • 41% use it to stay up to date on news
  • 22% share opinions through social sites

2. Values
Today’s youth are driven and future-thinking, with 79% saying doing well in school is very or extremely important and 72% spending time on activities that will help them in the future.

3. Politics
The general assumption tends to be that Gen Z is liberal, but the research shows that these young people represent the diversity of the political spectrum. The majority view themselves as moderate (39%), with an almost-even split between liberal (28%) and conservative (25%), and the smallest percentage falling into the “other” column (8%).

The power of five
The EY Gen Z Segmentation Study identifies the five segments of the Gen Z population and shows how much of the population each segment represents:

  1. Stressed Strivers (35%)
    high achievers, driven by a fear of not being good enough
  2. Big Plans, Low Energy (18%)
    expect to do well and make money, but aren’t necessarily willing to put in the effort
  3. Carefree Constituents (16%)
    the definition of “go with the flow”; may not drive change, but will be the ones who adopt it into the mainstream
  4. Authentic Activists (16%)
    motivated by the obligation to save the world – and the fear of what will happen if they don’t
  5. Secluded Perfectionists (15%)
    focused on being the best, not for money or accolades, but for the love of what they do

“Companies need a Plan Z and to recognize the power of five – or that each Gen Z segment brings unique value,” according to Marcie Merriman, EY Americas Cultural Insights & Customer Strategy Leader. “Combining their strengths can accelerate innovation and transformation throughout an organization. The research shows us that while, as a whole, Gen Z are the true digital natives who grew up with technology and unparalleled access to information, their individual attitudes are proving to be diverse and varied. Understanding the drivers of each Gen Z segment is critical to providing them with the products, services and experiences they desire as consumers and the jobs they seek as employees.”

Societal changes impact how Gen Z is being raised
There are many components influencing the diversity we are seeing among Gen Z, such as technological innovations, medical advances and changing social norms. Gen Z is the first US generation born of three generations, meaning their parents can be baby boomers, Gen X or millennials.

The research shows that diversity also exists among the parents of Gen Z:

  1. Free-Range (ish) (38%)
    care about their children’s well-being and will help them when they’re struggling, but overall, encourage their kids to be independent
  2. Controlling Critics (33%)
    dictate what their children do and make their decisions for them, rather than raise them to be independent
  3. Helicopter Parents (16%)
    worry about their children and want to have control to ensure they are on the right path for success, a holdover from the millennial era
  4. Hands-Off (13%)
    detached from their kids’ lives, providing limited emotional support

The study found a correlation between parenting styles and the Gen Z segments they foster. The more involved parents are, the more likely their child is to be a Stressed Striver or Authentic Activist, while the more detached parents are likely to raise a Carefree Constituent or Secluded Perfectionist. The following chart further details these relationships:

Transparency addresses Gen Z’s trust concerns
As an extremely diverse, independent and proactive generation, Gen Z have strong personalities and values, making it hard to gain their loyalty – 67% of Gen Z say that people cannot be trusted. With the disposable nature of the current society, loyalty may seem like a lower priority to Gen Z, causing a greater challenge for companies. Transparency will help companies gain Gen Z’s trust and provide them with a platform to remain authentic, connected and fulfilled, and therefore, more aligned with their values.

To maintain relevancy in our fast-changing world, businesses need to adopt a Plan Z. Today’s youth are markedly different from past generations. They are more tech-savvy and globally aware, and have unprecedented access to information and opportunities to educate themselves – these truths have previously defined Gen Z. However, as they come of age, the contradictions and individuality within the generation are becoming clear. To take advantage of this endlessly empowered generation, companies need to understand the diversity within and the unique drivers in each segment, rather than viewing them as one.

Gen Z’s influence in the workplace, economy and society will be increasingly felt in the coming years, and understanding how they see and approach the world will remain important for employers, marketers, technologists, business leaders and more.

This article was first published by Customer Network Strategy . Permission to use has been granted by the publisher.

Who are your most engaged members?

If you are an established retailer planning to launch a new or improved loyalty program, you can bank on the fact that your most engaged and most valuable customers will join first and in the largest numbers.

Enrolments peak early and then taper off as high value customers sign up. If your business has seasonal peaks, you will also see enrolments increase in line with these sales ‘spikes’ as good customers visit to shop for Christmas or Mother’s Day.

Routinely we see early enrolment members; spending more, buying more frequently, redeeming more rewards, staying active longer, than later enrolees.

Marketing investment in the early life of your program is much more likely to be to an engaged group of heavy buyers. These members are more likely to respond to your calls to action and buy even more / take up your offers. Response and conversion rates should be good, return on your loyalty spending great!

Even by the end of the first year of operation, most programs are seeing a decrease in the number of new enrolees and a decrease in the average value of these latecomers.

Smaller numbers of customers enrol each month, but they keep coming and over time they dilute the high value customers who joined early. Later, investments that were very likely to reach a highly engaged customer are more likely to touch a customer that is only marginally interested and far less likely to respond to your offers.

You can invest in customers who enrol early with minimal risk that the money will be wasted on un-responsive customers. The opposite is true as your program matures and enrollment rates fall. Expect program ROL to fall after the initial enrolment ‘rush’, then level off unless you start targeting investment early.

We recommend all program operators prepare for member engagement scoring during the set-up and planning for program launch. Observing and noting how early cohorts of customers behave and interact differently with your program than later (lower value) cohorts will help identify what scoring elements are best at identifying members worthy of your investments early in their relationship with you.

This article was first published by Customer Network Strategy. Permission to use has been granted by the publisher.

The Key Question of Loyalty

From a loyalty marketing perspective, few business tools are as useful as NPS – or Net Promoter Score – described by Harvard Business Review as “the one number you need to grow” – and the industry standard since the model was first published more than two decades ago as a way to measurably link your customer’s loyalty to your future profitability.

The ingenuity of the NPS approach lies in the question it uses which reveals customer’s true motivation. Whilst the factors that drive our buying behaviour are complex and varied, the “ultimate question” effectively sidesteps irrelevant influences to get to the true heart of the customer’s mindset by cleverly asking customers whether they would actually recommend the brand to a friend. By putting their own reputation on the line, customers commit what Fred Reichheld (the man behind the model) calls “the ultimate act of loyalty”.

An alumnus of Harvard Business School, and a Fellow and Consultant with Bain and Company for over forty-two years, Reichheld’s work has been embraced by leading global brands such as Apple Retail and American Express, so in this article, I explain both how and why I believe you should implement this simple tool in your business to understand the patterns of behaviour that are driving the profitability and growth potential of your business, starting with a short introduction video from LinkedIn.

Watch this short video for a quick introduction to Net Promoter Score methodology.

Benefits of Net Promoter Score :

Traditional customer research typically consists of lengthy questionnaires which are designed to capture specific insights across multiple issues from customers. But as busy people, we avoid lengthy questionnaires, so one immediate benefit of using NPS is that it asks just one simple question. This ensures higher response rates which are essential to achieve a statistically valid sample of data, while also eliminating the potential for customer frustration. Here is the question that customers are asked:

How likely is it that you would recommend [brand] to a friend or colleague?

Customers choose from 1 to 10 on the scale of their willingness to recommend the brand – 0 to six scores are classified as ‘detractors’, customers scoring seven or eight are ‘passive’ and only those awarding a nine or ten become ‘promoters’. Your overall NPS score as a single number is calculated by subtracting the percentage of detractors from the percentage of promoters.

The Formula to Calculate Your Net Promoter Score

In addition to a definitive measurement of the satisfaction of your customers, the analysis ensures complete visibility of who your top customers are – the ones you never want to lose and on whom the majority of your loyalty efforts and resources should be focused on.

Promoters are known to be less price sensitive, they churn less and actively recommend your brand, while passive customers are more price sensitive and also more vulnerable to competitors. Clearly detractors are a significant cause for concern as they can cause considerable brand damage and indicate more fundamental health issues in your business that need attention.

So what constitutes a good NPS score? This varies hugely by industry however as the range ranges from -100 to +100, anything over 0 is considered a good result and anything over 50 is excellent.

Focus on Promoters to Maximise Profits.

Measuring Your Net Promoter Score

There is no global recommendation how often you should measure your NPS, so the key is to ensure the sample size is valid while ensuring that frequent customers are not targeted excessively. An airline may report to management on a monthly basis, however customer-centric brands like Apple are reported to survey customers ‘every day in every store’ – sending a clear message to customer-facing staff that delighting customers is their top priority in the store’s day to day operations.

Reichheld identified the key principles which are essential for any company implementing NPS to ensure the programme’s success, such as how Apple applied the tool systematically in order to “enrich” the lives of their customers.

  1. Measure feedback consistently – occasional surveys at the point of sale are simply not effective to identify and understand patterns or trends in customer feedback.
  2. Close the Loop: Within Apple retail, the store manager calls every detractor (those customers rating 0 to 6) to understand the problem they experienced, apologise, and put measures in place to address their issue.
  3. Celebrate success: Employees are critical to the success of any retail operation so peer recognition and sharing exceptional results from promoters serves to energise and reward those staff responsible and inspires them to continually deliver at their best. It also helps improve employee loyalty and retain retail staff.
  4. Share Best Practice: A final recommendation is to invite feedback from store staff through to the company headquarters in a clear, consistent and committed process. Customer-facing staff provide a unique window of feedback directly from customers to central operations, capturing ideas and improvements while ensuring positive team dynamics.

With this comprehensive approach, it’s no surprise that Apple Retail’s NPS has reached a world-leading NPS score of 89, with the retail sector overall lagging behind with an average score of 29.

The impact (or potential impact) of measuring your NPS is compelling, with recent research proving that promoters spend 3.5 times more than detractors – a key audience to impress to guarantee your future profitability. Already more than two thirds of Fortune 1000 companies are using the metric, so there’s no doubt that digital solutions (like the loyalty management platform I write about loyalty for) all offer a really simple approach to start by ensuring the survey communication is managed with the appropriate business rules for your stores automatically applied.

More and more brands are implementing the solution, for example in Oslo airport in various restaurants operated by HMS Host, customers are encouraged to scan a barcode on the menu to give feedback. Here is the case study if you’d like to understand their approach in more detail.

And if you’d like to implement net promoter score (or any loyalty strategy) in your business, please contact us.

This article was first published by Customer Network Strategy. Permission to use has been granted by the publisher.

Payment-Led Loyalty – Simply Rewarding

A favourite approach for many marketers is known as the KISS Principle – “keep it simple stupid”. It surprised me the first time I heard it, but once I learned it was the design approach used by the US Navy, it quickly impressed me. With increasing competition for customer engagement, this principle is more important than ever before. Simplicity is becoming an essential marketing mindset that benefits loyalty programme operations, propositions and even customer communications.

As retailers, taking payment is the only essential step that takes place with every customer every time, and with the increasing dominance of digital payments, the payment card has become the simplest and most effective way that you can track customer purchases and reward them effortlessly. Simply recognising and rewarding customers WITHOUT them needing to present a loyalty card or even scan an app is one of the most exciting ideas in the industry today – and customers of course just love it.

Keeping Things Simple.

Payment-Linked Loyalty

Reitan Group is one of Europe’s leading grocery and convenience retailers with almost 40,000 employees across its 3,836 stores in Norway, Sweden, Denmark, Finland, Estonia, Latvia and Lithuania. Within the Group’s convenience retail business units there is a relentless focus on reducing transaction times and eliminating friction, so the team wanted to find a way to recognise their loyal customers so they could be regularly rewarded – but they wanted to avoid the need for customers to present a loyalty card or even scan their app. The solution was the creation of an “autostamps” programme that recognises and rewards members automatically when they pay with a pre-registered payment card.

Autostamps in Sweden – Simplifying Loyalty


In our article “How To Wow”, we describe the three essential elements your loyalty programme needs in order to delight your customers. It must be clear, compelling and consistent. Payment-linked loyalty is a truly compelling concept because it is so easy for customers, and it’s a solution that the Reitan Group has already launched in two of its convenience store chains in Sweden – Pressbyrån and 7-Eleven.

Autostamps began as a way to speed up the customer’s transaction time at the till but it quickly became obvious that the idea had other benefits that customers loved – including the ability to send them digital receipts, saving thousands of unnecessary receipts being printed every day. This unique environmental benefit appeals to eco-conscious customers, while also building trust in the brand by ensuring the digital transaction receipts are always available if needed.

The automated system has also delivered much more “surprise and delight” opportunities as customers earn rewards more quickly than ever before, by simply ensuring that every single transaction and purchase is automatically recorded.

How It Works:

The Customer’s Perspective:

  1. Customers download the retailers loyalty app.
  2. Either in-store or online, the customer links their payment card with their mobile phone number and thus their loyalty member profile.
  3. Every subsequent transaction using the same payment card is automatically captured and attributed to the relevant member. The customer’s receipts are available to the loyalty member digitally and their loyalty stamps or points are given automatically.

The Business Perspective:

Despite having older till systems in many of their stores, Reitan Convenience Sweden‘s CIO Gustav Almqvist was determined to ensure that every purchase in every store could be identified individually while of course respecting all data protection and GDPR regulations, so a flexible solution was created which ensures that loyalty stamps or points can be given:

  • by product
  • by category
  • by spend

The system captures just the relevant information needed to actually award the customer’s stamps. Other items on receipts are not recorded, stored or used, again ensuring best practice in permission-marketing and respecting GDPR regulations.

From a systems perspective, some development work was required for the terminal/point of sale to send the receipts to a database. The system migration then ran over-night once the development work is done.

The point-of-sale system now sends all of the receipt data electronically to the receipt database – and from there it is shared with the loyalty system, which awards the specific stamps and points to that customer’s account within a few seconds of the customer’s transaction.

Along with eliminating the need for the customer to take responsibility for identifying themselves every time they shop, the company gathers detailed transaction data which allows for greater segmentation, personalisation and relevance in its ongoing marketing, which Reitan Convenience Sweden is using to ensure it’s rewarding its most loyal customers the most using tiered rewards. For example, new customers earn every sixth coffee free, then every fifth coffee free and ultimately their gold members earn every fourth coffee free.

To learn more on how you can implement this concept in your business, click here, and you can also read the full case study here.

Tiered Rewards within the Loyalty App Created by Reitan Convenience Stores in Sweden.

Lessons and Learnings:

As a company, Reitan has published its philosophy of “common sense and skill. It’s not embarrassing to do things the simple way – it’s ingenious.” And it’s evident in their approach – becoming one of the few convenience retailers in the world that has successfully launched this compelling payment-linked concept despite the challenge of working with legacy point-of-sale systems. Farhan Akkurt of Reitan Convenience shared his perspective as one of the project leaders :

“We love to simplify things for customers here in Reitan Convenience and we are obsessed with reducing transaction time. Using their payment card to track customer purchases and automatically allocate their loyalty stamps really reduces queues and they feel effortlessly rewarded. It’s a win-win-win. We are really proud to have created such a great solution.”

This article was first published by Customer Strategy Network. Permission to use has been granted by the publisher.

Why is a coffee chain leading our adoption of mobile payments?

So why does Starbucks top the charts for the most used mobile payment apps in the U.S. in 2018*:

Starbucks app: 23.4 million users

Apple Pay:         22.0 million users

Google Pay:       11.1 million users

Samsung Pay:    9.9 million users

*in-store payments (Source: eMarketer)

Admittedly, we are still just scratching the surface where it comes to payments using a mobile device.  The same could also be said about commerce over the internet, where most consumer internet traffic relates to video.  By adding up all the online video watched on websites, YouTube, Netflix and webcams and you have 77% of the world’s internet traffic, according to US tech firm Cisco.

To really drive the uptake of mobile payments, a different approach to changing our behaviour needs to be adopted.  What can be done on a mobile phone is a fraction of what can be achieved with a desktop, laptop or tablet.  Without a clear set of consumer benefits, each targeting against a contactless payment alternative, mass adoption will take time or even worse may never occur at all.

There needs to be far greater understanding as to why a customer would be willing to exchange their existing purchasing habits for a mobile first experience.

Borne out by the statistics; the F&B sector is further advanced than the technology & payment companies in this understanding of customer behaviour.

Across the F&B sector, mobile enabled functionality such as ordering, payment & promotion is hugely valuable in an industry where profitability is directly related to the numbers of customers an operator is able to serve.

Mobile allows F&B operators to create compelling customer value whilst inside their restaurants; both time saving & money saving delivered within a fun & engaging mobile experience.

Starbucks already offers customers those major features of ordering, payment, rewards & gamification.  Now Macdonalds have started their own strategy to drive mobile adoption, pushing free deals and advertising to promote the use of their mobile app.

Like Starbucks, Macdonalds are investing heavily in mobile to encourage habit formation, engender customer loyalty & most importantly drive repeat purchase.

Other global operators will inevitably follow on once they too have the correct technology stack in place to deliver to their customers a combined mobile first ordering, payment & promotional experience.

It is still very much early days to determine those winners & losers in the adoption of mobile payments.  From the statistics, what is clear, a combined approach to ordering, payment & promotion has had the greatest success with customers.

This article was first published by Customer Strategy Network. Permission to use has been granted by the publisher.