0:00 - on Sia Partners proposition in Loyalty & CX • 2:50 - on step by step questions you need to address when building or revising a loyalty program • 4:50 - which features need to be in a loyalty program for it to be competitive • 8:50 - loyalty programs KPIs and consultant's "skin in the game" • 10:30 - one advice for anyone looking to redesign an existing loyalty program.
GLO
0:00 – on Sia Partners proposition in Loyalty & CX
2:50 – on step by step questions you need to address when building or revising a loyalty program
4:50 – which features need to be in a loyalty program for it to be competitive
8:50 – loyalty programs KPIs and consultant’s “skin in the game”
10:30 – one advice for anyone looking to redesign an existing loyalty program.
Read full transcript below.
00:00
GLO: Dear Khalid, it’s a pleasure to welcome you to the World Travel Market this year in London. Thank you so much for participating in the Global Loyalty Organization panel on loyalty and gamification earlier. Can touch a little bit more deeply into Sia Partners’ proposition, loyalty services and the experience your team has?
Khalid El Bachraoui, Sia Partners: Thank you, Anastasia, for giving us an opportunity to be here with you on WTM – I think it’s a marvellous event to present.
Sia Partners is a global management consulting firm – we’re active across the globe in all geographies – North America, Europe, the Middle East, and Asia Pacific. We have more than 20 offices globally where we service our customers across all industries – from fast-moving consumer goods to travel and transportation to energy or utilities.
I’m part of the marketing and customer experience service line and within that service line, we offer marketing, sales service, customer experience capabilities, and consulting services to our clients. This means looking at the commercial agenda, and CCO agenda and seeing what is next, what’s upcoming in customer interaction and the new stage in the customer journey, and how you as a company can benefit by taking the right steps in marketing, sales, and customer experience capabilities.
We observe from our customers that every brand across the industry is looking into this world of digitalization where customer expectation is changing day by day. We see the move towards digitalization of the journey. We see that a couple of leading brands are dominating their industry and their segments, which makes our customers come to us to see how we can uplift their commercial capabilities across the board.
In the context of loyalty and loyalty programs we see different questions popping up from our customers. Typically, you see the question: “I have a loyalty program running. However, I’m not able to meet my base objectives in terms of increase in revenue, customer base, and overall customer lifetime value. What can we do to upgrade our loyalty program?” That’s one category of our customers.
Another category is customers who are operating from a greenfield and who are new to their industry or into their segment or didn’t think of the concept of loyalty at all as part of their customer strategy. Here we have a “greenfield” implementation of the loyalty program as we have done at EmCan / Emarat. So depending on the questions we have different approaches to how we step in and how we bring consulting services to those customers.
2:50
GLO: You mentioned FMCG and F&B (food & beverage) industries – some of these companies have quite old, legacy loyalty programs, at least here in Europe and the UK it’s generally middle-aged and older populations with whom such programs are very popular. The young generation is very much digital savvy. Do you see a lot of such legacy loyalty programs with frequent spender loyalty cards or retail loyalty cards now converting into fully digital solutions to be able to stay on top of their game?
Khalid El Bachraoui, Sia Partners: It’s a very good question. We see some “older brands”, who already have legacy loyalty programs. To be honest, we always take the same approach – we always look at the end-to-end customer journey. How do we envision customer journeys online and offline and in parallel looking at the personas or the main audiences you’re trying to target as part of the loyalty program. We make a classification between, the “older” generations who are keener on physical card and don’t want to have a digital wallet, but they want to have a physical scanning card or an actual stamp even in some cases, to build up the loyalty points you have to cater for those audiences as well.
In our framework of how to design a best-in-class loyalty program, we look at it from different perspectives. First, what’s the customer journey you want to realize online and offline? Secondly, how do you differentiate according to the persona and customer database you have – what are the segments you are seeing? And then, how do you then design a fit for many a loyalty program – which is in these cases a blend between a digital loyalty program which should serve the majority of your population but still have an offline method which could also then work for specific segments in your in your custom database.
4:50
GLO: Today on the WTM GLO panel you made a very good comment about loyalty programs competing for the space in the wallet and the app space of the customers. It’s very valuable to have a customer attached to let’s say 1 to 10 loyalty programs. What do you see among the features that need to be introduced or implemented in the loyalty program to be in that golden space? Is it personalization? Gamification? Or may a combination of loyalty and biometrics? What is “the cutting edge” approach?
Khalid El Bachraoui, Sia Partners: Indeed, that’s also how we advise our customers – a loyalty program on its own irrespective of what kind of features it has will never bring you the big potential and the benefits you envision. So, for us, we see a loyalty program as a component in your wider marketing and customer experience strategy and even your sales strategy. What does it mean? We enter our customers’ businesses, and we have conversations on what future customer journey would look like, what are the most important channels where do they want to have that conversation with their customer? Where to differentiate that journey, where to bring a wow effect to your customers? Then, we start thinking about how we can have a loyalty program fulfilling that customer journey and that customer promise I want to bring to my customer. That is one aspect.
Another aspect is how do you market and sell your loyalty program? To be successful you need to be able to promote the program in the best possible way, but also to have the right personalized offerings. You should have the fundamentals – the program should be easy to use (intuitive application), should have all the basics in (earn & burn mechanism, profile completion, finding stores, finding your physical points of sales), having some kind of in-app promotions in it as a fundamental layer and basis layer I would say irrespecful of the customer journey.
And then built on that – you should look at what is really the differentiating factor in my customer journey to win the battle for the customer. That requires, on one hand, looking at your competitors but also looking at other leading industries in what they’re doing. Typically, you see an element of specialized rewards – very precise rewards directed towards the specific customer you have because you have all the customer data, e.g. I know the profile of Anastasia and I can give her the specific promotion and having more tier elements in your program and also giving you the opportunity to complete that to move to the next tier. Next step is then building in an innovation where innovation is a subset gamification, e.g. fun elements that can be introduced in the loyalty program. Also, looking into adoption of metaverse and AI technologies, (I can give some examples later). And finally, as I said in the panel an integrated loyalty app means having a super app that not only has a loyalty program on its own, but also where you can integrate other lines of businesses within one touch point to customers – for example, customer service, your product e-commerce capabilities, etc.
08:50:
GLO: Historically loyalty in many large companies was treated as the cost centre as you say sitting within the market you know but never clearly showing the revenue that the programs produce or interactions. What do you see now among your customers? Do you see companies starting and trying to measure the impact of loyalty programs, gamification, and personalization in more defined KPIs? Or do you still see loyalty as more of the kind of a cost centre?
Khalid El Bachraoui, Sia Partners: Actually, even stronger Anastasia. The majority of the customers who are with us typically ask us to bring “skin in the game” – a commitment being asked on the business case behind the loyalty program. So, at the start of every engagement, we define and specify tangible KPIs that we expect loyalty program to achieve. The basics are to increase customer base by attracting new customers and retaining customers longer but more fundamentally what’s the incremental revenue and cash flow we can attribute to the loyalty program? By that it becomes a very tangible question because it must contribute to the bottom line. By the way Sia Partners does commit to the success of the program through the consulting fee – so that’s the “skin in the game” component. We believe that we can build up the capability jointly with our customers as we have done with Emarat to showcase the actual benefit of the loyalty program.
10:30
GLO: This is very interesting. With your experience across industries and geographies is there one piece of advice you could give the guys who are just starting to launch a new program or if they are looking at the redevelopment of the legacy program adding maybe new features, and personalization? Is there any advice you can give?
Khalid El Bachraoui, Sia Partners: I would say always to take a step back if you already have a program. If you’re just starting – start really with a big whiteboard, drawing out at first how will this loyalty program contribute to the overall commercial strategy? That directly answers and brings the point on KPIs and performance measurement. How will this loyalty program make me successful as a business overall – meaning how will it contribute to my incremental sales? How will it contribute to my brand and my brand strength? How will it contribute overall to the customer experience and customer satisfaction? To do that it requires thinking over again the end-to-end value chain and the customer journey. Be very concrete on how that loyalty program is going to be of true value add in that journey. From there on start to design out you know the features and the components you want to bring into your loyalty program. If you don’t do that then typically you get a typical situation of a loyalty program with basic functions, but as a customer, you don’t feel attached or engaged to it, and/or it’s not bringing value to your business to the extent you would expect from the loyalty program.
12:00
GLO: Brilliant, thank you so much – it’s a pleasure having you here at World Travel Market this year, and hope to see you next year!
Khalid El Bachraoui, Sia Partners: Thank you, Anastasia, very much appreciated, and see you next time!
Source: GLO
