Traditional points-based loyalty schemes are no longer the whole solution, says Dan Linstead. Brands should look to membership organisations for content that truly builds long-term relationships
Loyalty – in the marketing sense, rather than being faithful to your other half, Swindon FC or the Queen – is 21 this year. In 1995, Tesco and fledgling data consultancy DunnHumby launched the Clubcard, with the supermarket’s then CEO Lord MacLaurin declaring, “What scares me about this is that you know more about my customers after three months than I know after 30 years.” The phenomenal success of the scheme gave Tesco market dominance, and spawned Nectar and the whole modern points-based loyalty world.
But at 21, that proposition is not so much all grown up, as looking seriously outdated.
Not only has Tesco’s once-impregnable citadel been stormed by its rivals (led by Aldi and Lidl), but the whole notion of loyalty based purely on discounts has started to look unsophisticated. Today’s shoppers, at all points on the income spectrum, are promiscuous (or smart, depending on your point of view), mixing and matching purchases from different retailers to achieve optimum value and choice.
Many of us carry around a wallet full of loyalty cards, meaning we are effectively loyal to nobody. And there is a deeper distrust, too, of the whole agenda of big data: a sense among consumers (particularly millennials) that these schemes serve the needs of their corporate masters rather better than they do the customer.
So it’s time for a rethink, to develop Loyalty 2.0 – and for inspiration, brands could learn a lot from the approach of consumer membership organisations.
At Immediate Media, we produce content for several of the UK’s biggest players in this space, and have seen audiences and engagement levels soar. Over the same lifetime as the Clubcard, membership of the National Trust has doubled from 2 million to over 4 million. The RSPB has flown from 800,000 members to over 1.1 million. English Heritage has nearly a million. And what’s more, churn rates are low – typically 15-20% per year – meaning many members are in it for the long term, or even for life.
Now (outside the divorce courts) loyalty isn’t a black and white issue. Our allegiances to brands are a volatile mix of behaviour and attitude: we can still feel warmly disposed towards John Lewis while repeat-shopping at made.com. But what membership organisations have in common is a long-term relationship with customers based on shared interests and experiences rather than simply repeat transactions – and that’s the recipe for Loyalty 2.0.
Good content is at its heart. Through magazines, online video social interactions, membership organisations are building genuine relationships with their audience which stand the test of time. They are increasingly using member data to segment their communications, making them more relevant for, say, families or culture vultures. And this is helping to drive specific actions, whether that means supporting a campaign or buying merchandise. But data and transactions are the icing on this cake, not – as with traditional loyalty programmes – the cake itself.
So what can brands pick up from the membership approach to content? What distinguishes content which genuinely helps to drive loyalty from infotainment which is seen for a minute and then forgotten? Here are three questions to consider:
Are you providing a platform (and are people using it)?
Interactions are at the heart of the new loyalty: people are engaged by getting involved. At a basic level, that means empowering your audience to respond to content (our magazine for the RSPB, Nature’s Home, receives over 1,000 emails an issue), and ensuring you’re responding to posts smartly on social media.
But it’s also about sparking ideas for co-creation, tapping into your audience’s passions and giving them a public space for their stories. The Wildlife Trust’s 30 Days Wild campaign is an astute example of this; in the commercial space, the long-running Volvo Saved My Life project has a similarly emotive idea at its core.
Are you giving people something they couldn’t get elsewhere (be honest)?
At some level, loyalty is always about utility: relationships thrive when there are practical benefits involved. Many membership propositions are built around usefulness, and through appropriate content, most brands can be similarly helpful to their audiences.
The internet may be awash with how-tos, lists and tips, but there is still ample space for content which is well SEO-ed, clear and genuinely thought-through from a consumer perspective. One of Immediate’s consumer magazines, BBC Gardeners’ World, has had striking success recently with a new members-only area of their website, the ‘Secret Garden’, which features expert video guides to common gardening problems. Dwell time on the site has dramatically increased, and members rate the digital content as a key benefit of membership, suggesting exclusive content really can build loyalty.
Are you relevant to their lives, right here, right now?
Clubcard-style loyalty is supposed to be all about relevance, using data to offer appropriate purchases and offers to customers. The membership approach to loyalty means transferring that insight into the content arena, using a CRM-driven understanding of your audiences to shape everything from tone to timing to localization.
What brands call the purchase funnel, membership organisations call stewardship, and it’s more than a semantic difference: one aims for a transaction, the other aims for a relationship.
Forging a personal connection with members and supporters is the bedrock of charity marketing. Our work for the RSPB, for example, encompasses separate comms plans for four different age groups and four UK regions, as well as a variety of e-shots based on product adoption and membership life stage. Targeted content is helping to maintain a relationship with members from pre-school right through to retirement, matching their needs and staying relevant every step of the way. And that’s a genuine basis for loyalty; something more than any discount card can offer.
Dan Linstead, Editorial Director (Branded Content), Immediate Media Co.