‘Brand loyalty programmes need to focus on driving customer engagement’

Brands’ loyalty programmes are not evolving with the digital age, leading to a missed opportunity for engagement with consumers, according to a new report.

A report by Capgemini published today (26 March) highlights that only 11% of loyalty programmes offer personalised rewards based on a digital presence such as a customer’s purchase history or location data.

Similarly 79% of loyalty programmes use a mobile channel for loyalty schemes, but only 24% allow redemption through it.

Brands are failing to create loyalty programmes for activities that encourage consumers to take online surveys and review establishments, as well as refer friends to a programme, according to Capgemini.

Mark Taylor, global lead for customer experience transformation at Capgemini explains: “Brands need to revisit their approach to loyalty. For us the key is to integrate the loyalty programme into the overarching customer experience and to reward engagement as well as the simple transaction.”

An overwhelming 97% of loyalty programmes are currently based primarily on simple transactions such as card or cash payments, according to the research.

Capgemini uses brands such as O2 and Starbucks as prime examples of how companies should be administering digital loyalty schemes.

Starbucks integrates its scheme with the overall customer experience for best results, combining mobile loyalty, payment and in-store digital experiences as well as a rewards programme through its app. The Starbucks app now has 12 million active users and accounts for seven million transactions a week.

O2, meanwhile, delivers personalised customer experiences to achieve further engagement, by using targeted location-based offers as part of its ‘Priority Moment’ mobile loyalty programme. Capgemini says that this is part of the reason that O2’s scheme became the fastest growing loyalty programme in the UK within 18 months of launch.

For the research Capgemini analysed current loyalty programmes of 160 global companies around the world from November and December 2014.