Five “loyalty truths” underpinning our status as a loyalty leader
We’re excited to announce today that Lenati, now PK, has been named a leader by Forrester Research Inc. in The Forrester Wave™: Loyalty Service Providers, Q3 2019 report. Whereas past Wave reports have focused on loyalty platform technology providers, this is the first time a Wave report focused exclusively on leading loyalty firms offering services, from visioning and strategy through design, development, and launch of new member experiences.
This recognition comes after nearly 10 years of focused specialization by the PK team, partnering with leading companies across industries to evolve methods in customer retention and loyalty. As industries have matured, PK has been at the forefront as a thought leader, defining new models for “membership” that create a deeper customer connection, spur engagement, and develop customer trust, affinity, and brand preference.
In Forrester’s own evaluation, “companies looking to reboot their loyalty strategy and challenge their thinking will like PK’s approach,” and PK “works with clients to break the traditional “membership” mold. For these reasons and more, we were ranked in the top two services firms for the strength of our current client offering. Following our many years of work in the space, we’re proud of this recognition of not only our own endeavors, but those of our many clients who we have partnered with to bring new and interesting member experiences to market. With this in mind, here are five “Loyalty Truths” that have withstood the test of time and continue to be major cornerstones of our philosophy and approach:
Five time-tested loyalty truths
#1: Truly understand the customer
This one will sound cliché, but remains an important refrain. Any good strategist worth their salt begins defining a solution by identifying the variables that influence success—and with customer loyalty, the solution must always begin with a deep understanding of the customer as human beings. If we seek to influence human behavior and emotional response, we must truly understand customers as people; not only who they are or how they behave, but why. It’s the “why” that many companies still do not understand, and where most of the innovation in our research and analytics methods has occurred. Using methods like Loyalty Driver Analysis (an integrated approach marrying quantitative, qualitative, and statistical methods), or Participatory Design (getting customers involved as direct participants in a design process) we can understand the weighted importance of key elements of the customer experience, helping arrive at the answer to why people behave or feel the way they do with respect to a brand.
#2: Loyalty = outcome; member experience > “loyalty program”
Many organizations still orient toward customer loyalty within a fairly restricted traditional loyalty program mental model, which produces a narrow focus on the potential solutions for achieving customer loyalty. It’s important to remember that customer loyalty is an outcome; achieved through delivery of a holistic customer experience that is valued. How a particular brand achieves loyalty as an outcome can be varied. Membership models, including elements from traditional loyalty and rewards programs, can be a very effective way to improve customer loyalty—but the mindset should be broad when considering what that membership experience could contain (see #3, below). Further, the quality of the experience itself is paramount to the success of any program. Seams in the experience (poor digital execution, lack of physical/digital integration, lack of dynamism / change in the program, etc.) can be the downfall of an otherwise good program design.
#3: Value takes many forms
What sets the most innovative membership programs apart is the incorporation of value-added elements that are outside what most marketers would consider the traditional loyalty program mold. Though traditional elements like monetary benefits (points, discounts, offers), shipping benefits for retailers, or classic status tiering remain an important consideration for program design, the landscape of customer “value drivers” is much, much broader. Marketers have spilled a lot of ink talking about “experiential benefits” in the past few years, though even this framing often leads organizations to more tactical executions involving special member-only events, etc. Expanding the lens on “value” means considering the role membership plays in elevating the customer experience broadly, evaluating elements such as value-added digital features or tools that provide member utility, community and cultural tie-ins, value-added member services, philanthropic or cause related involvement, and even facilitation of value through strategic partnerships with third-party ancillary brands.
#4: Technology solutions are inherently holistic
Enabling a compelling member experience through technology and data is a multi-layered endeavor. As programs have become more deeply integrated into the customer experience, the number of dependent systems has expanded. At the core, most companies will still require a strong loyalty platform to power and manage the basic structure of a program’s benefits and economics, and choosing this partner is a major decision. In addition to the strength of the loyalty platform capabilities, attention must be paid to how well that platform integrates with the full martech stack and provides future flexibility as your technology evolves to support a program roadmap. Our preferred loyalty platform partner, CrowdTwist, provides this type of flexibility that brands need to evolve over time as the technology environment changes. Beyond this core engine, however, enabling the member experience across all touchpoints requires thoughtful integration and orchestration across a variety of systems: centralized member database, CDP, marketing automation, CRM, personalization tools, commerce / booking platforms (if relevant), and customer-facing digital platforms (web, mobile) to name a few. The API strategy and supporting data architecture across the ecosystem is what enables both the member experience, and the brand, to unlock value.
#5: Membership as “product”
Customers expect their preferred brands to evolve, constantly improving the member experience they offer. To do this, and stay ahead the market and member expectations, innovative brands manage loyalty as a product. This means applying best-practice disciplines and process to the loyalty feature set and roadmap. Constant delivery of this roadmap means utilizing agile methodology for technology delivery, organizing cross-functional loyalty product teams who manage a backlog of features in a scrum process, and are using advanced analytics to measure performance and program incrementality over time. This is a large organizational change effort for many companies who still operate with loyalty as a marketing program, managed as an expense line-item, yet is a necessary evolution for those who have invested in membership as a competitive differentiator.
These Loyalty Truths continue to guide our work today, and are part of the reason Forrester stated, “Reference clients confirm PK is well versed in providing strategy and operational support and commend it for the curious, confident, and proactive way it tackles their work.”
About the Author
Clay Walton-House serves as Managing Director of Integrated Loyalty Solutions at PK. He helps Fortune 500 companies create and implement new customer engagement strategies that accelerate growth and build loyalty. His expertise lies in understanding consumer behavior and translating it into actionable customer insights. Clay has a proven track record of successful loyalty program design and optimization, helping uncover ways to build retention and loyalty strategies into a company’s broader business model.Tags: Customer Data Platforms, Customer Experience, Customer Loyalty, Loyalty, Loyalty Marketing, Loyalty Program Design, Retail