Monthly Archives: October 2023

How CPG Brands Can Improve Customer Loyalty

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Consumer Packaged Goods (CPG) brands operate in a highly competitive landscape, where consumers are bombarded with choices every day. In this environment, building and maintaining customer loyalty is crucial for long-term success. Loyal customers not only bring in consistent revenue but also serve as brand advocates, helping to attract new customers through word-of-mouth. To achieve this, CPG brands must focus on various strategies and innovations. In this article, we’ll explore how CPG brands can improve customer loyalty and provide concrete examples of successful approaches.

1. Personalization and Data Utilization

 

One of the key drivers of customer loyalty in the CPG industry is personalization. Brands that can tailor their products and marketing to individual customer preferences tend to enjoy higher customer retention rates. By leveraging data analytics and generative AI, CPG brands can gain insights into customer behaviors and preferences.

 

Example: Amazon is a prime example of a brand excelling in personalization. Their recommendation engine, powered by AI, analyzes a customer’s past purchases and browsing history to suggest products tailored to their interests. CPG brands can implement similar algorithms to offer personalized recommendations and promotions to customers.

 

2. Enhanced Customer Engagement

CPG brands can enhance customer loyalty by engaging with customers beyond the point of purchase. Building a sense of community, sharing valuable content, and addressing customer needs can go a long way in fostering loyalty.

 

Example: Oreo’s “Daily Twist” campaign is a great illustration of customer engagement. Oreo posted daily images of their cookies in various creative settings, tying them to current events and holidays. This kept the brand top-of-mind and encouraged customer participation by sharing their own Oreo moments.

 

3. Loyalty Programs

 

Implementing loyalty programs is a tried-and-true method to improve customer loyalty. These programs can offer rewards, discounts, and exclusive access to customers who consistently choose your CPG products.

 

Example: Starbucks’ loyalty program, Starbucks Rewards, is a notable success story. The program offers points for each purchase, which can be redeemed for free drinks and food. By making customers feel valued and appreciated, Starbucks has achieved impressive customer loyalty. (there’s a lot more to this story)

 

4. Product Innovation

Staying relevant and addressing changing consumer preferences is vital. CPG brands must innovate to meet evolving consumer demands, whether in terms of healthier options, sustainable packaging, or new flavors.

 

Example: Beyond Meat revolutionized the meat alternative industry by creating plant-based products that closely mimic the taste and texture of real meat. This innovation attracted consumers who were looking for healthier and more sustainable protein options, contributing to the brand’s strong customer loyalty.

 

5. Customer Feedback and Improvement

Listening to customer feedback and acting on it is a powerful way to boost loyalty. When customers feel their opinions are valued and their concerns are addressed, they are more likely to remain loyal to the brand.

 

Example: Procter & Gamble’s Tide brand took customer feedback to heart when they developed Tide PODS with a childproof closure. This change was a direct response to concerns about child safety, demonstrating the brand’s commitment to its customers.

 

6. Sustainability Initiatives

With growing environmental awareness, CPG brands can improve customer loyalty by adopting sustainable practices and transparently communicating these efforts to their audience (what is Green Loyalty?).

 

Example: Unilever, the parent company of brands like Dove and Ben & Jerry’s, launched its Sustainable Living Plan. By committing to reducing its environmental footprint and improving social impact, Unilever has garnered the loyalty of environmentally conscious consumers.

 

Conclusion

 

In the fiercely competitive CPG industry, customer loyalty is a cornerstone of success. By embracing personalization, enhancing customer engagement, offering loyalty programs, innovating products, valuing customer feedback, and adopting sustainable practices, CPG brands can significantly improve their customer loyalty. These strategies, as demonstrated by successful examples, not only retain existing customers but also attract new ones, driving growth and long-term brand success in the ever-evolving marketplace.

 

Contact a Loyalty Expert

 

How is Generative AI Shaping the World of Customer Loyalty?

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Note: This content is generated by AI and the image is also created through MidJourney. 

Generative AI is shaping the world of customer loyalty in several ways, primarily by enhancing customer experiences and personalization. Here are some key ways in which generative AI is impacting customer loyalty:

 

1. Personalized Content and Recommendations: Generative AI can analyze vast amounts of customer data to create personalized product recommendations, content, and offers. This personalization increases customer engagement and satisfaction, ultimately leading to greater loyalty as customers feel that a company understands and caters to their individual preferences.

 

2. Chatbots and Virtual Assistants: Chatbots and virtual assistants powered by generative AI can provide 24/7 customer support and assistance. They can answer inquiries, resolve issues, and offer a personalized experience, improving overall customer satisfaction and loyalty.

 

3. Content Generation: Generative AI can create high-quality, relevant content at scale, such as blog posts, articles, and product descriptions. This content can engage customers and provide them with valuable information, reinforcing loyalty and trust in a brand.

 

4. Social Media Engagement: Generative AI can help brands create and schedule social media posts that resonate with their target audience. It can also analyze social media data to identify trends and customer sentiment, allowing companies to adjust their strategies and maintain customer loyalty.

 

5. Predictive Analytics: Generative AI models can predict customer behavior and preferences, helping companies anticipate and meet their needs. This proactive approach can enhance customer loyalty by demonstrating a deep understanding of customers’ desires.

 

6. Custom Product Design: Some companies are using generative AI to offer customers the ability to customize products. This personalization can lead to increased customer loyalty, as customers appreciate having a unique and tailored product.

 

7. Gamification and Rewards: Generative AI can be used to design gamified loyalty programs that engage customers through challenges, rewards, and competitions. This can foster a sense of community and loyalty among participants (comprehensive guide on gamification).

 

8. Sentiment Analysis: Generative AI can analyze customer reviews, comments, and feedback to gauge sentiment and identify areas for improvement. Brands can then take actions to address issues, thereby maintaining and even increasing customer loyalty.

 

9. Automated Email Campaigns: AI-driven email campaigns can be personalized based on customer behavior and preferences. Sending relevant, timely messages to customers can keep them engaged and loyal.

 

10. Customer Feedback and Surveys: AI-powered chatbots and surveys can collect customer feedback and analyze it to identify pain points and areas of improvement. Addressing these concerns can lead to higher customer satisfaction and loyalty.

 

11. Predictive Maintenance: In industries like manufacturing and maintenance, generative AI can predict equipment failures and maintenance needs. Ensuring that customers’ products or services are always available and reliable can enhance loyalty.

 

While generative AI has the potential to significantly impact customer loyalty, it’s essential for companies to use this technology ethically and transparently. Respecting privacy, gaining customer trust, and providing tangible value are critical considerations when implementing generative AI in customer-facing applications.

Loyalty Programs: The Profitable Engine of the Travel & Hospitality Industry

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The travel and hospitality industry is known for its fierce competition, where businesses vie for customers in an ever-evolving landscape. In this sector, loyalty programs have emerged as powerful tools to secure and maintain customer patronage. These programs offer not only a range of perks for travelers but also substantial profits for the industry. In this article, we will explore why loyalty programs are so profitable for the travel and hospitality sector, along with real-world examples illustrating their impact.

 

1. Customer Retention and Repeat Business

Loyalty programs are designed to retain and reward customers who repeatedly choose a specific travel or hospitality brand. By offering incentives like discounts, free stays, or exclusive access, these programs encourage customers to return, fostering repeat business. The resulting increase in customer lifetime value significantly boosts profitability.

 

Example: Marriott Bonvoy is a standout example. With over 150 million members worldwide, this loyalty program offers numerous benefits, including room upgrades, free nights, and exclusive experiences. The program has not only increased customer retention but has also expanded Marriott’s portfolio through acquisitions, such as Starwood Hotels, further boosting its profitability.

 

2. Brand Differentiation

In a highly competitive industry, loyalty programs provide a unique selling proposition that differentiates one brand from another. Customers are drawn to businesses that offer them exclusive perks and personalized experiences, making them more likely to remain loyal to the brand, even if it means paying slightly higher rates.

 

Example: Hilton Honors is a prime case of brand differentiation. Hilton’s loyalty program offers a “Price Match Guarantee,” assuring customers of the best available rate when booking directly through Hilton channels. This feature sets Hilton apart from its competitors and encourages travelers to choose Hilton for their stays.

 

3. Increased Ancillary Sales

Loyalty program members often spend more during their travels, not just on accommodations but also on ancillary services such as dining, spa treatments, and activities. These additional expenditures contribute significantly to the industry’s profitability.

 

Example: The airline industry is a prime example of leveraging ancillary sales. Airlines like Delta offer their loyalty program members exclusive benefits, such as priority boarding, complimentary upgrades, and access to airport lounges. These perks drive higher spending on flight upgrades and in-flight services, substantially boosting ancillary revenue.

 

4. Valuable Customer Data

Loyalty programs provide travel and hospitality businesses with a treasure trove of customer data. This information allows businesses to personalize marketing efforts, enhance the customer experience, and make informed decisions regarding their offerings and strategies.

 

Example: Accor’s “ALL – Accor Live Limitless” loyalty program collects data on customer preferences, stay history, and engagement levels. This data helps Accor tailor its marketing campaigns, target specific customer segments, and create personalized offers, leading to higher customer satisfaction and repeat business.

 

5. Direct Booking and Reduced Distribution Costs

 

Loyalty programs often encourage customers to book directly through the brand’s website or app. This not only reduces distribution costs associated with third-party booking platforms but also allows brands to build a direct relationship with customers, fostering long-term loyalty and repeat bookings.

 

Example: Choice Hotels’ “Choice Privileges” loyalty program offers an exclusive Member Rate for customers who book directly through their website or app. This strategy has not only decreased distribution costs but has also increased direct bookings, strengthening customer relationships and profitability.

 

Conclusion

Loyalty programs have become a staple of the travel and hospitality industry for good reason. They drive customer retention, increase ancillary spending, provide valuable customer data, reduce distribution costs, and differentiate brands in a competitive landscape. Real-world examples from brands like Marriott, Hilton, Delta, Accor, and Choice Hotels illustrate the significant impact of loyalty programs on profitability. As travelers seek personalized experiences and added value, loyalty programs have proven to be a win-win solution for both customers and the travel and hospitality industry.

 

Contact a Loyalty Expert

 

Building a Winning Loyalty Program for the BFSI Industry: Top Factors to Consider

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The Banking, Financial Services, and Insurance (BFSI) industry is no stranger to competition. In a landscape where customers have an abundance of choices, building and maintaining a loyal customer base is of paramount importance. A well-designed loyalty program can be a game-changer in the BFSI sector, fostering long-term relationships and attracting new customers. However, creating an effective loyalty program in this industry requires careful consideration of unique factors. In this article, we will explore the top factors to keep in mind when developing a loyalty program for the BFSI sector (Capillary’s recent acquisition has an expertise in this domain).

 

1. Comprehensive Customer Segmentation

A successful BFSI loyalty program begins with a deep understanding of your customer base. Segmenting customers based on demographics, financial behavior, and preferences is crucial. It allows you to tailor rewards and incentives that resonate with each group’s specific needs and interests.

 

2. Personalized Offers and Rewards

Personalization is key in the BFSI industry. Your loyalty program should offer personalized incentives, such as discounts on relevant financial products, exclusive investment advice, or insurance policy enhancements. A one-size-fits-all approach is unlikely to yield the same results.

 

3. Multi-Channel Accessibility

 

Customers today expect convenience and flexibility. Ensure that your loyalty program is accessible through various channels, including in-branch, online, and mobile apps. A seamless, omnichannel experience can significantly enhance customer satisfaction.

 

4. Transparent and Easy-to-Understand Terms

The BFSI industry is notorious for complex terms and conditions. To earn customer trust, make sure your loyalty program is transparent and easy to understand. Clear terms for earning, redeeming, and managing rewards are essential to prevent confusion or disputes.

 

5. Security and Privacy Assurance

Security is paramount in the BFSI sector. Assure customers that their personal and financial data will be safeguarded in compliance with industry regulations. Any data breaches or security lapses can severely damage your reputation and customer trust.

6. Educational Content and Resources

BFSI customers often seek knowledge and advice to make informed financial decisions. Offer educational resources, webinars, or expert insights as loyalty program benefits. Empowering customers with financial literacy can set your program apart.

 

7. Integration with Core Services

Integrate your loyalty program with core banking and insurance services. Customers should be able to seamlessly access and manage their loyalty rewards alongside their financial accounts, making the program more integral to their overall experience.

 

8. Customer Service Excellence

Exceptional customer service is non-negotiable in the BFSI industry. Your loyalty program should be supported by a responsive and knowledgeable customer service team that can assist with program-related inquiries and concerns promptly.

 

9. Flexibility and Choice

Incorporate flexibility into your loyalty program. Allow customers to choose how they redeem rewards, whether it’s through discounted financial products, cashback, or charity donations. The ability to customize their experience can enhance satisfaction.

 

10. Regular Communication

Maintain open lines of communication with your loyalty program members. Keep them informed about program updates, exclusive offers, and relevant financial news. Regularly engaging with customers can strengthen their loyalty and interest.

 

11. Compliance with Regulatory Guidelines

Adhere to all relevant regulations and guidelines within the BFSI sector, including anti-money laundering (AML) and know your customer (KYC) requirements. Failing to comply with these rules can lead to serious legal repercussions.

 

Conclusion

A well-executed loyalty program can be a potent tool for success in the BFSI industry. By keeping the above factors in mind, BFSI institutions can create loyalty programs that not only retain existing customers but also attract new ones. A customer-centric approach, personalized offerings, transparency, and robust security measures are essential to building a loyalty program that not only differentiates your institution but also fosters long-lasting relationships with your valued customers.

 

Contact a BFSI Expert

 

Controversies in Customer Loyalty: What Loyalty Programs Must Learn

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Loyalty programs have long been an integral part of the marketing strategies employed by businesses across various industries. They serve as a means to reward and retain loyal customers, fostering brand engagement and driving sales. However, in recent years, the world of loyalty programs has seen its share of controversies. In this article, we will delve into some of the latest controversies that have emerged in the realm of loyalty programs, examining their implications and the lessons they offer for both businesses and consumers.

 

1. Data Privacy Concerns

Example: In 2019, Starbucks faced a data privacy controversy when it was revealed that their loyalty program app was storing customers’ data in an unprotected format. This vulnerability could potentially expose customers’ personal and financial information. Starbucks quickly addressed the issue, but the incident highlighted the critical importance of safeguarding customer data in loyalty programs.

 

Implications: The mishandling of customer data can lead to severe repercussions, including legal penalties, financial losses, and reputational damage. Businesses must prioritize data security and transparency in their loyalty programs to build and maintain trust with customers (read more on data privacy from a loyalty marketer’s POV).

 

2. Hidden Costs and Devaluation

Example: Airlines, like Delta and United, have faced criticism for making it increasingly difficult for customers to redeem frequent flyer miles for free flights. In some cases, airlines have raised the number of miles required for a free ticket, making it more challenging for customers to receive the expected rewards.

 

Implications: Devaluing rewards can lead to disillusioned customers, eroding trust in the loyalty program. To mitigate this, businesses should be transparent about program changes, regularly communicate their value proposition, and ensure that the rewards offered align with customer expectations.

 

3. Lack of Transparency

Example: Some hotel loyalty programs have faced criticism for their complex and unclear terms and conditions. Customers have reported difficulties understanding the rules, such as blackout dates and restrictions, which can lead to disputes and negative experiences.

 

Implications: Frustrated customers may abandon a loyalty program altogether, causing businesses to lose out on valuable repeat business. Transparent and user-friendly program terms are essential to foster trust and satisfaction among participants.

 

4. Complex Redemption Processes

Example: Hotel chains have been known to have complex redemption processes, often requiring customers to navigate blackout dates, minimum stay requirements, and limited room availability. These complexities can deter customers from taking full advantage of their rewards.

 

Implications: A convoluted redemption process can lead to customer frustration and diminish the perceived value of the program. Simplifying the redemption process and removing unnecessary barriers can enhance the customer experience and encourage program participation.

 

5. Inequitable Tier Systems

Example: Hotel and airline loyalty programs have faced criticism for their tier-based structures. Some customers feel that achieving higher tiers is excessively challenging, and the benefits do not commensurate with their loyalty. For example, achieving top-tier status might require an unattainable number of stays or flights.

 

Implications: Inequitable tier systems can lead to a sense of unfairness and alienate customers. Businesses should regularly evaluate and adjust tier structures to ensure that rewards align with customer loyalty and spending patterns (explore types of loyalty programs).

 

6. Limited Redemption Options

Example: Some retail loyalty programs offer limited redemption options, restricting customers to specific products or services. This can frustrate customers who would prefer the flexibility to choose how they want to redeem their rewards.

 

Implications: By broadening the range of redemption options, businesses can attract a wider audience and better meet individual customer needs, ultimately improving loyalty program satisfaction.

 

Conclusion

Loyalty programs remain a valuable tool for businesses to cultivate and maintain customer loyalty. However, as the recent controversies in the loyalty program landscape have demonstrated, transparency, data privacy, fairness, and simplicity are paramount in ensuring the success of these programs. Addressing these issues is not only in the best interest of customers but also essential for businesses to preserve their brand reputation and thrive in the evolving landscape of loyalty marketing. By actively responding to these challenges and implementing best practices, businesses can rebuild trust with customers and ensure the continued success of their loyalty programs.

 

Contact a Loyalty Expert

Capillary and ELI partner to armor brands with real-time emotional loyalty intelligence

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Capillary Technologies, a global leader in customer loyalty solutions has entered into a transformative partnership with ELI, an innovative technology company specializing in emotional data intelligence. This strategic collaboration is poised to revolutionize how brands harness emotional insights to cultivate customer loyalty and foster meaningful engagement.

 

Co-founded by Danny Socolof, ELI (Emotional Loyalty Intelligence) is developing emotional data analytics using the fastest-growing language in human history- emojis. Emojis have become an integral part of modern communication, each symbolizing a spectrum of human emotions. ELI’s pioneering technology deciphers the emotional meanings and intensity hidden within emojis, offering brands unprecedented signal and insights into customer sentiments. The software measures, scores, and classifies individual emotions in context to Brand products, offers, experiences, and rewards using emojis and transmits that data to the Capillary platform. ELI also reports monthly on whether brand loyalty is getting stronger or weaker along with reasons and insights.

 

 

When combined with Capillary’s proprietary Brierley Loyalty Quotient (BLQ) framework, acquired earlier in 2023 from the renowned loyalty consultancy company Brierley, the Capillary platform emerges as the ultimate solution for real-time emotional loyalty intelligence.

 

The power of Capillary, Brierley, and ELI is unparalleled considering their independent expertise as a technology platform, consultant, and emotional intelligence analytics expert respectively. Put together, the Capillary platform is perfectly poised to help brands deliver excellent customer experiences and win customer loyalty.

 

In the words of Sameer Garde, CEO of Capillary Technologies, “In today’s hyper-connected world, emotions play a crucial role in customer engagement and loyalty. Our partnership with ELI, combined with the power of BLQ, allows us to provide brands with an unrivaled solution for understanding and harnessing customer emotions.”

 

Danny Socolof, Co-Founder of ELI, echoed this sentiment, stating, “Emojis are the universal digital language of emotions, and our technology makes it possible to unlock this language for brands. We are excited to partner with Capillary to help brands connect with their customers on a whole new emotional level.”

 

Don Smith, Global Chief Consulting Officer at Capillary Technologies, added his perspective, saying, “The integration of ELI’s emotional data analytics and BLQ’s loyalty insights creates a potent synergy. Brands can now tap into real-time emotional loyalty intelligence, enabling them to make data-driven decisions that drive customer loyalty and revenue growth.”

 

This partnership represents a significant milestone in the evolution of customer engagement and loyalty strategies. Brands collaborating with Capillary Technologies will gain a decisive advantage in today’s dynamic and customer-centric marketplace.

 

 

About Capillary Technologies:

 

Capillary Technologies is a global loyalty technology solutions company with a presence across the United States, India, the Middle East, and Southeast Asia. Capillary is a SaaS platform with a suite of products- Loyalty+, Engage+, Rewards+, and Insights+- which are powered by a robust consumer data platform (CDP+) that helps brands build meaningful customer engagement and win customer loyalty. Powering loyalty programs across 30+ countries, Capillary works with 250+ enterprise brands including the likes of Tata, PUMA, Shell, Al-Futtaim, Petron, Domino’s, and Kanmo Group. With a massive reach of 1Bn+ consumers and processing 5Bn+ annual transactions, the company has the backing of Warburg Pincus, Sequoia Capital, Avataar Ventures, and Filter Capital. For more information, visit www.capillarytech.com.

Step by Step Guide on Revamping Your Loyalty Program

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Popular airline company Delta recently made headlines when it announced a change in its popular loyalty program called SkyMiles. Why did a popular airline like Delta update its already successful loyalty program?

 

Delta Airlines CEO Ed Bastion indicated to the press that the high demand for their premium products and services surpasses their capacity to deliver effectively. The only possible option from a financial perspective and business objective sense was to incorporate this change in their loyalty program.

 

With changing customer behavior and changing market scenarios, it becomes an important step for brands to revamp their loyalty programs. This helps them to adapt to the current climate and prepare for long-term growth. Even if you have a good game going for your current loyalty program, a regular inspection can help you realize how revamping your current program can result in improved growth rates for your brand. 

 

Many big brands, in spite of their satisfaction with their loyalty program, still consider a revamp to add some more novel features that will enhance customer experience by switching to a more manageable and flexible technology. 

 

Let’s go step by step to see how you can successfully revamp your loyalty program: 

 

1. Assessing Your Current Loyalty Program 

 

The first step is of course to understand how your current loyalty program is doing and where it is falling short. Here are some questions that you need to ponder over in order to get started- 

  • Is your loyalty program aligning with your business objectives? 
  • How is it performing with respect to the industry benchmark? 
  • Has your loyalty program become stagnant? 
  • How is the financial modeling of your loyalty program working out? Is it bringing in the money or just taking it out?
  • How are customers engaging with your program?
  • Are they dropping out at certain stages?
  • Which incentives are driving the most engagement?

 

By answering these questions you will be able to figure out how your current program is working and how customers are behaving with the offers. By doing a clear financial audit and understanding your customers, you will be able to get deep insights into your programs and understand different transaction data, touchpoints, and engagement patterns. 

 

Consider evaluating metrics like customer lifetime value (CLV), customer acquisition costs (CAC), and return on investment (ROI) per customer segment. These will help you plan out your next steps. 

 

While this can be a challenging task, it is also one of the most crucial steps to begin with while considering a revamp. Brierley’s Fast Track consultancy module is designed to make this job easier for you. It breaks your entire program into several modules and analyzes each of them to understand where your program needs a fix. Read more about it here: Brierley Fast Track Consultancy.

 

2. Defining Objectives For Your Loyalty Programs

 

After assessing your current loyalty programming, it’s time to articulate your objectives with precision. Set clear, measurable, and achievable goals as to what you want from your program.

 

What is the revenue increase you aim to achieve within a defined period? 

What level of customer engagement are you targeting, and how will you measure it? 

 

Establish your key performance indicators (KPIs) and use them to guide your revamp.

 

Also Read: Are You Tracking These Loyalty Metrics?

 

The next step would be to start segmenting your customer base. The success of your revamped program lies in understanding the diverse nature of your customer base. Your high-value customers have different needs and expectations compared to the rest. Segment your customer base thoughtfully and tailor rewards and benefits to meet the specific needs of each segment.

 

Take it a step further by creating detailed customer personas within each segment. What motivates them? What pain points do they face? Develop personalized strategies to cater to these unique groups, increasing engagement and loyalty.

 

3. Hyper-Personalization and Choosing the Right Rewards 

 

The power of loyalty programs lies in the choice of rewards. To understand what rewards to choose, dive into data-driven insights to discover what incentives motivate each customer segment. Is it points, cashback, exclusive experiences, or a combination? Go beyond the obvious transaction-based relation with your customers and provide the rewards that resonate deeply with them. 

 

Personalization is the hallmark of loyalty. It goes way beyond just customer names and uses customer buying behavior to send personalized offers. This not only leads to higher customer engagement but also increases the reward redemption rates. 

 

Capillary makes use of the Propensity Model to understand and predict customer behavior thus effectively sending personalized messages to your customers which will lead to high CTR and connect well with the customers. Read more about it here: Capillary’s Propensity Models to Predict Customer Behaviour

 

4. Modernize your program for a seamless customer experience

In the last year, Starbucks transformed its Starbucks Rewards program, enhancing its digital features, strengthening loyalty elements, and incorporating greater personalization. This involves delivering customized offers via their mobile app, providing more precise product suggestions, and simplifying advance ordering and mobile payments, resulting in a remarkable 25% boost in revenue in the third quarter of 2023.

 

Starbucks’ loyalty program revamp is a clear example of how brands can elevate their programs by modernizing their loyalty process and making the best use of world-class technology. Making the best use of their mobile app Starbucks was able to create personalized offers and rewards, they paved the way for a seamless experience for their customers and built a strong emotional connection with them. The end result of this would be greater reward redemption, high customer engagement, and substantial growth for the business. 

 

Use the power of technology to offer unique experiences for your customers and stay ahead of the game. 

 

5. Data and Analytics for Driving Informed Decisions

 

In today’s data-rich world, your loyalty program’s success is directly tied to data utilization. Implement advanced analytics to extract actionable insights.

 

Track and measure the success of your loyalty program in real-time. How are your KPIs performing? Have you considered predictive analytics to anticipate future trends and customer behavior? The art of revamping lies in your commitment to ongoing monitoring and evaluation.

 

Capillary’s Insight+ is an AI and ML-powered advanced decision-making tool that can do this job for you easily by collecting data, analyzing it, and turning raw data into actionable insights. 

 

6. Communication and Transparency with Customers

Transparent communication is the bedrock of trust. Make sure that you keep your customers informed about changes and updates. Maintain an open line of communication through multiple channels. Your customers should have a clear understanding of how your program operates and its benefits.

 

Be proactive about addressing customer concerns and feedback. Transparent program policies and open, two-way communication demonstrate your commitment to their satisfaction.

 

Conclusion

 

Revamping your loyalty program is a profound journey, one that demands meticulous planning, data-driven decision-making, and relentless commitment. As you embark on this transformation, consider each element deeply. Your loyalty program can be the driving force behind customer retention and business growth.

 

Now, it’s your turn. Revamping your loyalty program can be a complex endeavor, but you don’t have to go it alone. The next chapter in your loyalty program’s success begins with a single action: Reaching out to us today.

 

How SaaS Loyalty Technology Solutions are Disrupting the Agency-Led Model

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The loyalty application market has changed. Gone are the days when large agencies would build a stand-alone custom solution for Fortune 500 brands. This approach is breathtakingly expensive and prone to major technical challenges. Traditionally, loyalty management has been an agency-led model where a brand would work with agencies to design and deploy a loyalty program. Some of the finest programs in the history of loyalty have been designed in this fashion but like any other industry, technology has revolutionized loyalty marketing as well. And SaaS (software as a service) is making a case for itself. 

 

Market overview and what is SaaS

 

The loyalty management market is estimated to be more than $10 billion and the USA is the most advanced in terms of acceptance. Most of the major brands have had ongoing loyalty programs and for many of them, Loyalty is a separate business line in itself. For instance, in the first six months of 2023, Delta reported cash sales from loyalty marketing agreements worth $3.4 Billion, or approximately 12% of their revenue over the same period (read more).

 

With the advent of cloud-based technologies (AWS arrived in 2006), a loyalty SaaS offering also came into the picture, and at Capillary Technologies, we’ve had the privilege of being one of the pioneering companies offering a SaaS platform for loyalty marketing (we started in 2008). Software as a service is basically a platform that brands can use to implement loyalty programs in a quicker, more flexible, and more cost-effective manner. 

 

Why choose SaaS over any other approach

 

Loyalty SaaS Benefits

There are multiple reasons why brands are opting for SaaS technology over the traditional agency-led approach. 

 

 

  • Flexible & Cost-effective

 

With SaaS, a brand doesn’t have to invest as much in technology resources, worry about integrations, or take a large risk. Brands can choose to start with a small pilot and scale as they succeed. The SaaS provider does all the technological heavy lifting of managing data and having integrations in place through APIs so that it can work with your existing technology systems. Along with this, SaaS platforms also offer a high degree of flexibility. 

 

 

For example, a large conglomerate in the Middle East shifted from an agency-led model to Capillary because it wanted to do a lot many things with its loyalty program and deliver a superior customer experience. Early in September, the brand wanted to go live with more than 50 employee offers, 26 promotions (including six cashback deals), and a game – all in one day. And this wasn’t part of the earlier plan but they could still do this easily and efficiently with Capillary. If this were repeated on any agency model in the USA, customers would need to spend around $300K as a change request on developing and delivering these promotions by coding on the platform. It would have taken at least 2 months to deliver! But with a SaaS platform, this is instantly possible and without any extra cost.  

 

 

  • Get the best product offering

 

Taking forth the first point, this is also possible because a loyalty SaaS platform has a product roadmap in place. Customers get access to the best in class technology which is being built by working with more than 250 brands across industries. 

 

Capillary’s platform with its suite of products- Loyalty+, Engage+, Rewards+, Insights+; sitting on top of a powerful consumer data platform has touched more than a billion end customers and has offerings with learnings from implementing more than 100 enterprise loyalty programs. 

 

Developments in the field of emotional intelligence (BLQ and Yawye partnership), investments in AI technology, nudge framework, and such results in pathbreaking features that would help loyalty marketers run better programs, delight customers, and achieve business goals. These features are not being built for a specific brand but the product roadmap is built with every sector in mind and any development gets rolled out to all brands on the platform.  

 

 

  • Faster go live

 

Another big advantage of headless technology like Capillary is the extensive integration marketplace it comes with. For any brand, it is inevitable that it’ll have a number of technology systems in place, and for a new one to be implemented, it has to be compatible. Capillary comes with integrations for POS systems, to communication gateways to social integration, and more. Through APIs, a brand can connect to many of the major systems to ensure seamless data flow. With existing integrations, there is minimal technology resource requirement from the brand’s side which lets it go live much faster.  

 

 

  • Ensured data privacy & security

 

In the modern digital age, consumers are increasingly concerned about their personal data and it becomes critical to have airtight data security. For a brand to do this in-house is an uphill task considering this isn’t their forte. In an agency-led model, more third-party consultants would need to be brought in to ensure compliance. But in case of a SaaS platform like Capillary, it inherently needs to be compliant with regulations like GDPR, CCPA & PDPA for it to be able to offer its services across the globe. This again means that the brand can focus on what it does best and leave the data privacy regulations to the SaaS platform. 

 

 

Conclusion- With Capillary+Brierley, get the best of both worlds

 

As an enterprise brand looking to expand on your loyalty program or build a new one, you get the best of both worlds with Capillary Technologies. How? Earlier in 2023, Capillary acquired Brierley+Partners which is a renowned loyalty consultant with its marquee BLQ (Brierley Loyalty Quotient) for measuring emotional loyalty. Along with Capillary’s best-in-class technology platform (a Leader on the Forrester Wave), clients get an excellent combination to deliver great RoI-driven loyalty programs.  

 

Contact a Loyalty Expert

 

Maximize Airline Loyalty Programs for Profit and Passenger Satisfaction: A Guide through Examples

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Airline loyalty programs (often called frequent flier programs) aren’t just about collecting miles while flying; they’re a dynamic long-term partnership that benefits travelers and airlines alike. In the fast-paced world of travel, these programs have evolved into powerful strategies that enhance the passenger experience while boosting airlines’ bottom lines, even during the toughest economic climates. 

 

In this comprehensive guide, we’ll dive into five prominent airline loyalty programs, shedding light on their numerous advantages to travelers and the airlines. This guide will enable your journey of designing or expanding a customer loyalty program that deliver RoI and delights end customers.

 

1. Sky Miles by Delta Airlines

 

Delta Sky Miles, one of the most popular airline loyalty programs, is free to join and boasts a staggering 120 million members. As of 2020, Delta has earned around 2.2 billion alone from SkyMiles. 

 

Delta Sky Miles follows a  Medallion status hierarchy, which provides exclusive benefits as the customer ascends through Silver, Gold, Platinum, and Diamond tiers, based on their spending and flying activity. An increase in status level can be earned by flying, hotel stays, credit card spending, and much more. 

 

During the pandemic, when travel had entirely slowed down, Delta Airlines was one of the US carriers that was able to secure funding of $6.5 billion by collateralizing the future cash flows of their loyalty programs 

 

In September 2023, Atlanta-based Delta Airlines announced some changes to its Sky Miles program which has not been well received by its loyal customers. According to the new changes, the focus shifts to how much the customer spends instead of miles flown, making it two times harder for current customers to enjoy the Medallion Status. While this new shift is going to make sense considering the financial benefits for the airlines, it poses a conflict of interest for its current loyal customer base. Only time will tell as to how this will pan out but as a learning for loyalty marketers- it is crucial to analyze the repercussions of a change in loyalty program design.

 

 

2. Miles and More by Lufthansa

 

With over 20 million members, Miles and More is Europe’s go-to choice when it comes to airline loyalty programs. With an extensive network of 40 airline partners, including renowned names like Lufthansa and SWISS, this program offers a seamless travel experience. 

 

In Miles and More, the tier levels are different from other airline loyalty programs. The tiers of Miles and More loyalty programs escalate as follows- Frequent Traveler, Senator, and HON Circle Member.

 

While qualification thresholds for membership tiers are slightly higher, even Frequent Traveler members can enjoy perks. Some of them are:

  • Exclusive lounge access
  • Priority check-in and boarding

 

Miles and More’s interactive mobile app helps people keep track of their miles, set miles targets, and make it easy for travelers to redeem their rewards. They also get personalized updates on daily offers based on your reward status. And the best part- the app offers free 500 miles upon signup.  Miles and More does all this by using zero-party data, ensuring absolute data privacy of its customers.

 

Leveraging the power of coalition loyalty programs, Miles and More is in partnership with several other brands, allowing customers to earn award miles not just from flights but also through partner hotel and rental car services.

 

Also Read: Understanding Coalition Loyalty Programs

 

3. Mileage Plan by Alaska

 

With a revenue of $479 million, Alaska’s award-winning loyalty program Mileage Plan is another leading frequent flyer program. Alaska Airline’s Mileage Plan allows customers to earn 30% more miles than many other airline loyalty programs. 

 

A tier-based loyalty program, Mileage Plan offers a  flexible earning system, allowing the traveler to accumulate miles not only by booking flights but also through partner hotels and rental car providers, like Miles and More. Additionally, the traveling member can even earn rewards by dining at partner restaurants and if you are using their partner travel credit card, you earn miles on every dollar spent on the card. How convenient is that!

 

Some other key benefits of the Alaska Mileage Plan include: 

  • Premium upgrades
  • Inflight magazine subscriptions
  • Dedicated services
  • Faster boarding (no long queues at the airport!)

 

As a brand, it will be critical to have a thorough analysis of customer behaviour and design the loyalty program accordingly. With a platform like Capillary, the AI-powered Nudge Framework enables brand marketers to deliver personalized communication tailored for an individual. This helps in increasing customer retention and win their loyalty. 

 

 

4. Skywards by Emirates

 

Emirates Skywards is one of the most popular frequent flyer programs in the Middle East and takes a comprehensive approach to rewards. 

 

There are four distinct membership tiers and higher your status, the more exclusive benefits you unlock. The miles you earn depend on a combination of factors, including the route, spending, your membership tier, and fare class. 

 

Travelers can enjoy a range of benefits based on their membership tier: 

  • Extra baggage allowance
  • Waitlist priority’
  • Flight upgrades
  • Priority services
  • Access to business-class lounges and more

 

Skywards by Emirates also provides a feature to create a family account where travelers can pool their miles. 

 

Additionally, you can accumulate Emirates Skywards miles not only with Emirates but also through partner airlines like JetBlue and Malaysian Airlines. The customer can redeem their Skywards miles with Emirates and their partner brands.

 

5. Flying Blue by Air France 

 

Air France’s Flying Blue program boasts 20 million members and adopts a revenue-based rewards system, where the more you spend, the more you earn. 

 

Flying Blue miles can be earned by flying with Air France, KLM, and Transavia, with miles credited to your Flying Blue account. From booking a flight, hotel, shopping with partner brands or using a co-branded credit card, Flying Blue provides a lot of opportunities for its members to collect miles.  This system ensures that travelers are rewarded based on their financial commitment, making it a higher ROI source for the airline and ensuring premium services for member travelers.

 

Flying Blue offers a number of exciting ways to spend miles through partnerships with other brands. A few to mention are:

  • On-flight meals
  • Extra baggage allowance
  • Promo rewards on the first of each month
  • Lounge Access and more

 

Using the miles in your Flying Blue account the member can also purchase items from the Flying Blue Store, the payment being in miles.

 

Conclusion

 

When the pandemic posed a tough time for several airlines, it was the ones with a strong loyalty program that could steer clear through the tough economic times. Although people had temporarily stopped flying, they continued to spend with the loyalty program partners, especially the co-branded credit cards, ensuring a strong source of cash flow for the airlines. 

 

This clearly shows us that a well-structured loyalty program can be a life savior for airlines during difficult times. 

 

With the right balance between airlines’ financial modeling and customer satisfaction, airlines reap billions through their loyalty programs. This requires a mix of the right loyalty consultancy and tech platform which comes together with Capillary and its acquisition of Brierley. 

 

At Capillary, we provide comprehensive traveler engagement solutions, built for the Aviation industry. By combining a robust CDP, advanced data segmentation, and AI-driven prediction, airline brands can create a loyalty program that gives incremental value to their travelers in every phase of their journey.

 

Find out more about Capillary’s aviation solutions here. 

 

The Future of the Foodservice Industry: Technology or Quality Driven

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The Foodservice Technology Conference (FSTEC) 2023 wrapped up a few weeks ago in Dallas, and it lived up to the conference’s theme of ‘the restaurant industry and technology converge.’ Countless sessions by industry leaders shared insights and innovative strategies for using technology to drive business growth, providing value to customers, and transforming the customer experience. 

 

In July, Capillary shared some trends driving growth in the loyalty industry. These ever-evolving dining trends use new technology to create an innovative, data-driven, digital-first customer experience (CX) ecosystem. These recent trends drive repeat purchases with the ability to alter customer behaviors while still delivering value to the customer. 

 

Here are some of Capillary’s key takeaways from FSTEC 2023:

 

Everyone’s talking about loyalty, but everyone isn’t convinced loyalty works.

 

Several brands attending the conference spoke about their loyalty programs, but many did not believe their programs were effective. A prevailing theme in the restaurant industry is that their programs are not standing out — “punch card” programs are the most common industry standard, but this system doesn’t seem to move the needle.

 

Why have these programs become so commonplace? Many brands selected full-stack restaurant marketing/technology solutions with built-in restaurant-oriented loyalty modules.

Indeed, these generic loyalty programs may not be effective. The answer is to build a loyalty solution unique to your brand! McDonald’s, Starbucks, and Dunkin’ prove that loyalty works in this industry.

 

The secret is creating a custom-tailored loyalty program designed to enhance your customer experience (CX), is unique to your brand, allows for rich personalization and flexibility, and improves operations.

 

Every restaurant business is a technology business.

 

Technology is everywhere in the restaurant business today. Since much of that technology is now dated, many brands are exploring new technologies to help them improve their operations, margins, and customer experience.

 

Of course, the hot topics are generative AI and tools like ChatGPT. Restaurant brands are deciding the best way that AI can help them streamline and automate back-of-house operations, improve marketing and customer engagement, handle customer service, and optimize and automate their business operations. Exciting times ahead!

 

Fast-casual concepts are booming: customers love quality.

 

As a consumer, it doesn’t surprise me that customers consistently choose quality, interesting, fast-casual concepts over brands that specialize in making food fast and cheap. We live in a “golden age” of unique, high-quality, fast-casual concepts, and many brands are scaling quickly. The winning brands are building modern technology stacks with high-utility apps and websites to power mobile ordering, loyalty, etc. They also use technology to create highly engaging experiences, power marketing journeys, and automate offers and content. But at the end of the day, doing these things helps these brands optimize their businesses. 

 

FSTEC 2023 proved what Capillary has been saying: new technology plays (and will continue to play) a critical role in success in all industries, but especially in food service and restaurants. Choosing the right technology partner is vital in creating a unique restaurant loyalty program aligned with your brand and that is not a cookie-cutter version of your competitors.

 

Connect with me or one of Capillary’s F&B loyalty experts to learn how we can help your business today!