The  Future  of  Loyalty      Insights  from  Discussions  Building  on  an  Ini4al  Perspec4ve  by:    Christopher  Evans  |  Director  |  Collinson  Group  

Context  The  ini4al  perspec4ve  on  the  Future  of  Loyalty  kicked  off  the    

Future  Agenda  2.0  global  discussions  taking  place  through  2015.    This  summary  builds  on  the  ini4al  view  and  is  updated  as  we  progress.  

Ini4al  Perspec4ves  Q4  2014  

Global  Discussions  Q1/2  2015  

Insight  Synthesis  Q3  2015  

Sharing    Output  Q4  2015  

Loyalty  Experiences  For  brands  that  aspire  to  crea4ng  customer  loyalty  in  this  disorderly    world,  there  is  a  fundamental  ques4on  that  needs  to  be  addressed.    

Quite  simply,  what  will  ‘loyalty’  be?    

Beyond  Loyalty  Brands  may  have  been  mistaken  in  assuming  that  ‘loyalty’  behaviour  was    

ever  more  than  ephemeral.  The  challenge  lies  in  understanding  the    consumer  of  the  future,  and  their  redefined  needs  and  expecta4ons.    

The  Personal  Data  Dilemma  Lurking  ominously  in  the  background  there  is  also  the  ques4on  of  to    

what  extent  consumers  will  allow  us  to  collect  and  use  their    personal  informa4on,  and  what  they  will  expect  in  return?    

Diluted  Value  of  Loyalty  Consumers  will  increasingly  face  the  problem  of  having  a  wallet  fat  with  loyalty  cards.  In  this  scenario,  the  value  of  loyalty  may  become  diluted,  the  consumer  may  become  overloaded,  eventually  disengaging  from  loyalty  altogether.  

Pointless  Points  Will  the  ability  to  make  prices  dynamic,  rewards  instant,  and  responses  to  consumer  demands  individually  relevant,  all  mean  that  tradi4onal  loyalty  models  become  meaningless  or  (to  use  an  excrucia4ng  pun)  pointless?    

Brand  Alliances  We  will  see  a  set  of  consumer  expecta4ons  that  brands  will  no  longer  be  able  to  deliver  alone.  Strategic  brand  alliances,  designed  to  deliver  sophis4cated  

choice  and  content,  to  complex  consumer  needs,  are  likely  to  emerge.  

Consumer  Power  The  consumer  is  likely  to  gain  the  upper  hand  in  terms  of    

the  power  dynamic  and  principles  such  as  ‘great  customer  service’    will  no  longer  be  a  nego4able.  

Extreme  Customer  Centricity    Customer  engagement  will  become  a  core  func4on  that  cuts  across  tradi4onal  silos,  and  helps  to  focus  en4re  businesses  on  the  contextual  needs  and  value  opportuni4es  for  different  audiences  at  different  stages  of  a  customer  journey.  

Dynamic  Experiences  Consumers  ideas  of  u4lity  value  and  expecta4ons  of  loyalty  move  from  a  

recogni4on  of  the  value  in  standard  loyalty  proposi4ons  to  dynamic,  exci4ng,  changing  and  variable  experiences  that  are  ‘here  today’  and  ‘gone  tomorrow’.    

New  Value,  Different  Models  In  the  coming  years,  brands  will  need  to  be  disrup4ve  in  their  thinking  about  loyalty,  seeking  new  kinds  of  value  proposi4on,  exploring  different  models    

and  redefining  the  very  ways  in  which  loyalty  is  conceived.  

Device  is  King,  Consumer  is  Queen  Whether  on  devices  or  in  the  cloud,  our  digital  repositories  will  know  who  we  are,  where  we  are  and  what  we  redeem.  Businesses  need  to  understand  these  new  intermediaries  and  how  they  define  our  rela4onships  with  their  brands.  

Rewarding  B2B  Loyalty  Leveraging  high-­‐value  rela4onships  between  corporates  means  going  beyond    ‘more  savings’  for  loyal  customers.  B2B  rela4onships  come  to  resemble  the  more  qualita4ve  interac4ons  already  found  between  customers  and  brands.    

PredicIve  Not  RetrospecIve    Tradi4onal  loyalty  rewards  and  schemes  involve  measuring  past  customer  behaviours  and  transac4ons.  In  the  future  reward  could  be  linked  to  the  predic4on  or  presump4on  of  ways  customers  might  behave  in  the  future.  

Tension  with  RegulaIon    Some  regional  regulatory  interven4ons  protect  consumers  whilst  others  prevent  innova4on  by  limi4ng  use  of  new  technologies.  A  power  struggle  

between  brands  and  government  emerges  around  wider  data  sharing  and  use.  

ConInuous  Proof  of  Loyalty  Brands  have  to  consistently  demonstrate  their  loyalty  to  consumers    

as  customer  mobility  and  switching  between  brands  increases.  Global,    regional  and  local  affilia4ons  blur  and  drive  wider  brand  consolida4on.  

The  Voice  of  Youth  Younger  consumers  are  more  difficult  to  pin  down  but  they  are  more  willing  to  share.  Brands  can  speak  to  the  youth  in  these  terms,  crea4ng  opportuni4es  for  interac4on,  but  also  more  personal,  human,  experiences  and  rela4onships.  

The  Composite  Consumer  Flexible  digital  iden44es  allow  consumers  to  connect  with  each  other  even    as  they  connect  with  brands.  Loyal  rela4onships  will  be  made  not  just  with  individual  customers  but  also  with  families,  couples,  and  groups  of  friends.  

10  Seconds  of  ANenIon  Increased  consumer  choices  and  channels  leave  brands  figh4ng  for  10  seconds  of  a`en4on.  A  new  paradigm  will  emerge,  based  on  dynamic,  fast-­‐moving,    calls  to  ac4on  rather  than  long-­‐term  rela4onships  with  delayed  rewards.  

CounIng  the  Costs  of  Loyalty  Keeping  customers  loyal  is  increasingly  expensive.  Brands  will  learn  to  

differen4ate  between  the  ‘truly’  loyal  and  the  merely  ‘conveniently’  loyal,  in  order  to  maximise  the  value  in  maintaining  costly  long-­‐term  rela4onships.  

Loyalty  from  Top  to  BoNom  Driving  an  authen4c  loyalty  offer  will  require  companies  to  address  the  rising  promiscuity  of  employees.  Organisa4ons  will  have  to  make  a  choice  between  facilita4ng  increasingly  flexible  career-­‐paths,  or  nurturing  internal  loyalty.  

Polyamourous  Loyalty  Brands  begin  to  embrace  customer  promiscuity,  finding  ways  to    recognise  their  emergent  desire  to  build  a  patchwork  iden4ty    

through  diverse  and  conflic4ng  choices.  

The  Human  Touch  In  a  world  of  global  and  digital  marke4ng  and  consump4on,    

consumers  will  increasingly  favour  those  brands  that  can  offer  more    emo4onal  engagements,  and  specifically  human-­‐to-­‐human  contact.  

Love:  Warts  and  All  With  corporate  transparency  becoming  a  necessity,  businesses  have  to    

address  it  as  both  an  opportunity  and  a  threat.  Successful  brands  will  find  ways  to  take  customers  with  them  -­‐  even  as  they  reveal  their  less  a`rac4ve  sides.    

The  Sharing  Economy  will  be  RegulaIon-­‐light  Consumers  will  become  more  loyal  to  business  models  that  connect  them  to  other  people.  Personal  rela4onships  will  dominate  -­‐  but  within  the  safety  of  recognised  global  networks  that  act  as  insurance/reassurance  for  users.    

TransacIonal  vs.  EmoIonal    Seamless  payments  will  distance  consumers  from  understanding    

monetary  value.  Brands  will  have  to  reconsider  the  way  they  connect    to  customers  providing  more  holis4c  and  emo4onal  value.  

Customers  Before  Shareholders  Driven  by  changing  views  of  their  social  value,  corpora4ons  will    

increasingly  seek  to  focus  more  on  real  customer  needs  and  so  decrease    emphasis  on  short-­‐term  pressure  from  shareholders.    

Dreaming  of  Humanity      The  norm  will  be  automa4on:  machines  will  respond  to  humans  who    

respond  to  machines.  Human  interac4on  will  only  be  used  to    problem-­‐solve  and  provide  more  personalised  and  premium  services.    

Combining  Neuroscience  and  Big  Data    Organisa4ons  will  take  the  opportunity  to  exploit  innova4ons  in    

neuroscience,  wearable  electronics  and  big  data  to  provide  enhanced  customisa4on  in  the  design  and  delivery  of  new  products  and  services.    

Personal  Data  Store  Led  by  developments  in  authen4ca4on  systems,  new  personal  data  pladorms  migrate  into  the  world  of  marke4ng.  These  lead  to  seamless  and  universally  accepted  creden4als  stores  that  share  data  with  mul4ple  brand  partners.  

Cultural  Relevant  Conundrum    In  an  increasingly  global  and  diverse  world  how  will  brands  embrace  na4onal  consciousness  and  touch  consumers  whose  na4onal  iden4ty  is  disconnected  

 to  where  they  live?  How  will  brands  reconnect  with  the  diaspora?  

Up  Close  and  Personal    Consumers  are  increasingly  in  the  driving  seat  and  aware  of  the  use  of  their  

data.  We  may  see  loyalty  U-­‐turn:  With  greater  transparency  in  place,    brands  will  have  work  ensure  consumer  loyalty  not  the  other  way  around.  

Brand  vs.  PlaVorm  Loyalty  Digital  pladorms  will  be  both  friend  and  enemy  to  brands.  Pladorm-­‐based  loyalty  may  threaten  tradi4onal  brand  loyal4es.  Brands  will  respond  in  

different  ways,  with  temporary  price  wars  perhaps  giving  way  to  new  alliances  

Loopy  ∞  Loyalty  Brands  will  move  beyond  closed-­‐loop  transac4ons  with  individual  customers,  

and  seek  to  engage  with  social  groups,  especially  on  digital  pladorms,  enabling  con4nuous  product  and  service  itera4on  based  on  p2p/c2c  sharing.    

China:  “From  Blood  to  Business”  Businesses  in  China  have  long  operated  on  the  principle  of  making  the  kinds    of  rela4onships  with  customers  that  are  sought  with  family.  They  will  bring  

this  thinking  to  loyalty,  reimagining  brand-­‐consumer  rela4onships.  

China:  Leapfrogging  and  Expanding  Innova4ons  in  technology  and  social  media  pladorms  in  China  will    mean  that  China  leapfrogs  tradi4onal  loyalty  models  and  creates    

loyalty  models  that  are  innova4ons  for  the  whole  world.  

Government  IntervenIon  With  loyalty  pladorms  increasingly  u4lising  personal  data  –  and  social  media  pladorms  providing  private  spaces  for  poten4ally  undesirable  behaviours  –  

government  interven4on  in  loyalty  models  becomes  more  likely.  

Loyalty  is  Convenience  Loyal  customer  behaviours  may  be  revealed  starkly  as  being  nothing    more  than  convenience.  In  a  world  where  consumers  are  agile  and  

empowered  –  the  most  convenient  op4ons  will  win.  

Rise  in  Religious  Followings    There  is  a  rise  in  the  number  of  conserva4ve  religious  communi4es  –  some  

genuine,  some  underground.  These  heighten  regional  tensions  but  also  act  as  a  catalyst  to  open  or  change  viewpoints  to  pragma4cally  suit  local  needs.    

Extreme  Faiths  Religion  con4nues  to  be  a  powerful  galvanising  force  defining  our  values,    ac4ons  and  iden44es  -­‐  but  in  some  regions  is  increasingly  polarising.  

Fana4cism  con4nues  to  rise  -­‐  amplified  by  social  technologies.  

Sport  Entertainment  Changing  consumer  life-­‐styles  and  shorter  a`en4on  spans,  linked  with  more  connected  and  influen4al  fan-­‐bases,  combine  to  see  a  more  commercial  

spor4ng  landscape,  triggering  the  birth,  evolu4on  and  destruc4on  of  sports.    

Live  Experiences  Live  sport  and  fes4vals  are  put  on  a  pedestal  -­‐  a`rac4ng  cross-­‐overs    with  other  industries  and  greater  technical  innova4on  to  enhance    

fan  interac4vity  and  audience  engagement.    

More  Niche  Groups  More  alterna2ve  groups,  niche  cults  and  ideologies  bring  together  like-­‐minded  people  from  across  tradi2onal  boundaries.  Brands  adapt  to  this  rise  by  crea2ng  

more  niche  product  categories  catering  for  smaller,  dispersed  'tribes’.    

Trusted  Reviews  Social  peer  review  data  is  combined  with  other  qualita4ve  insight,  to  separate  

the  authen4c  reviews  from  the  fake  and  'bought’.  New  regula4on  in  the    review  space  also  helps  create  equal  opportuni4es  to  compete  for  trade.    

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