Rowles is the vice president Asia Pacific of Aimia, a global marketing and loyalty analytics company. Aimia works with a number of Kiwi retailers, including The Warehouse Group. In his talk, Rowles said the comic shop’s owner is running his loyalty programme wrong because as well as being allowed to hit him, customers can use it to get free comics.
Giving away rewards with a monetary value is a mistake, says Rowles. He says loyalty programmes should be about deepening the customer’s relationship with the brand, and offering financial rewards “debases” that relationship. He likened giving financial rewards to paying a colleague for a favour.
“The move we’re seeing is away from rewards and towards a personalised relationship.”
The popular coffee card system was singled out as “not smart” as, Rowles says, a customer who has purchased five coffees is likely to buy a sixth as well. He suggested replacing the free coffee with free rewards based on the customer’s preferences, such as making sure their favourite barista made their coffee each time.
Rowles also took aim at retailers who spam their customers online. He likened the experience to hearing a shouty ad on television. More than 70 percent of customers will unfollow a spammy retailer online, Rowles says; more than 60 percent will delete a spammy app; and a significant proportion will cease to do business with a retailer who demands too much of their attention.
Rowles shared a timeline showing the progression of loyalty programmes, reminding the crowd that each innovation built upon the last rather than replacing it:
- 1890s: Stamps and books.
- 1980s: Electronic points.
- 2003: POS and payment cards.
- 2013: Omnichannel engagement.
- 2015 and beyond: Hyper-personalised, value-driven engagement.
He says customers now expect brand engagement to be hyper-personalised and values-driven, saying that these services are now in reach of every retailer.
Rowles says analysing the data gleaned from loyalty programmes allows retailers to become more efficient by concentrating on the small number of high-value customers who deliver the majority of sales. They can also cease to expend effort on the low-value customers who don’t contribute much.
“Basically, you can fire 53 percent of your customers and lose 10 percent of your turnover, you just have to know who they are.”
On this basis, Rowles concluded that the Chicago comic shop is doing loyalty wrong in the following ways: rewards with a monetary value are being given out; no data is being harvested from the loyalty programme, and the shop is using a third-party loyalty programme rather than owning this group of followers.
As for the punch in the stomach: “It’s probably not something anybody really wants.”