Thursday, June 9, 2011

Aussie loyalty's signs of maturity

I enjoyed a customer loyalty conference in Sydney recently; not a large forum, but certainly one attended by very engaged Aussie loyalty-philes. Pleasantly surprised that loyalty could stand up on its own in a forum in this country, and a testament to the seriousness with which Australian retailers are addressing this topic.

Impressive, too, to see some of the success of relatively new programs - Rebel Sport's "Season Pass" program, with its two-tier pricing and other benefits; and Hoyts new Rewards program, with a swag of treats - just to name a couple. Not only were these and other initiatives garnering impressive take up by customers, I was really impressed with the thoughtful planning and execution.

Intelligently applying a blend of science, cost-efficient tech-wizardry, data deftness and a liberal dose of common sense and pragmatism seemed to provide a recipe for sustainable success. The mix needs to be just right, because it was also very clear that these programs need to be executed in an environment of scarce resources. It seems no program, big or small, has the luxury of large budgets and certainly not large teams. This seems true in programs as diverse as Dymocks' successful Booklover program and the data-intensive Onecard program from Countdown supermarkets in New Zealand.

Academics aren't often touted as draw-cards at these gatherings, so it was a pleasant surprise to take in engaging presentations from John Dawes from UniSA and Nathalie McCaughey from Monash Uni. The team John hails from has been producing solid work on loyalty and related topics going right back to Byron Sharp's quantitative study soon after FlyBuys began, while Nathalie's data-rich expose on what makes frequent flyer programs tick was an absolute revelation.

Loyalty programs are no longer new in this country, but this recent gathering demonstrated that this field is burgeoning, even blossoming.

Wednesday, February 2, 2011

Only 131 kilometres to my "local" reward

As much as information collected by loyalty programs provides a great opportunity for relevant, personalised communications to, or indeed in these enlightened days, conversations with its members, it's something that occasionally gets lost in translation. With email marketing providing a low cost form of communication, I know from the program I work with, there's often the temptation to batch and blast a message to all and sundry.

But if that's a sin in loyalty land, I reckon an even greater one is attempting to provide a personalised, targeted communication and failing miserably in the execution. And without naming names, one of Australia's most prominent loyalty programs has managed to do that with an email stream in recent months.

A couple of days back I received my "exclusive January offers" promoting the program's affiliates. (Never mind it was received on the last day of January, I'm assuming the offers didn't expire that day). But tellingly the email is headed up "my range of local rewards". And that's where the problem really begins, since each time I have received these emails over the past ten months, they are full of retailers that are anywhere but "local" to me. Some examples:
  • Hair salon in Wantirna, 24 kilometres away
  • Coffee in Doncaster, 12 kilometres away
  • Liquor from Fitzroy North, 16 kilometres away
  • Jewellery in Frankston, 50 kilometres away
  • Travel agent in Ringwood, 22 kilometres away
  • Fruit from Cheltenham, 12 kilometres away
The pi├Ęce de resistance came on Monday, with an invitation to pop in for a spot of Japanese at Ballarat Tokyo Grill, a mere 131 kilometres away. About as useful an option for local casual eating as heading to Tokyo itself!

A couple of extra pointers here - it's not as if the above examples are the exceptions among a range of other truly local shopping options; these anything-but-local offerings form the majority. Also, you'll note that none of them are for specialised goods or services that warrant long travel to hunt down. A hairdresser can be found in suburban Melbourne without necessitating a 24 km trip. Fruit can also be quite handy.

However, the most disappointing aspect is this - they know from my purchase behaviour where I DO shop - and it's not in any of the suburbs listed above.

To be fair, the program in question often does a good job in using transaction data, even at a product level, to make relevant offers. In the particular case of the program affiliates, I suspect that there may be other commercial factors that get in the way. But despite ten months for them to get this right, targeting excellence, like these "offers", seems yet some distance away.