Here’s a Roundup of this week’s Loyalty and Digital Marketing News
Highlighting: Bath & Body Works, American Airlines, Microsoft Rewards, Majid Al Futtaim, OAG Travel Report, Kobie, Sainsbury’s, Brandmovers, Rovertown, Carnival, Zero Party Data, Gen Z
Quick Global News Roundup
- Kobie named as the only Leader in “The Forrester Wave™️: Loyalty Services, Q2 2024”
- Sainsburys adds BNPL option for millions of customers across its brands
- Avanti West Coast won ‘Best Loyalty Initiative within Travel’ at International Loyalty Awards
- Brandmovers announces the acquisition of The A Team, a brand development/content agency
- Medical Spa Dermis.ai launches Membership Rewards Mobile App with AI Chatbot
- Carnival Cruise lines quietly removes a loyalty program benefit for VIFP cruisers
- Majid Al Futtaim Partners with Checkout.com to Enhance Digital Payments
- Convenience retailer True North launches new mobile app and rewards program with Rovertown
- Retailers heavily investing in social media marketing to boost loyalty
- How retail membership programs harness first-party data for advertisers
- According to a McKinsey study, customers who redeem their points in a high-performing loyalty program can drive an increase in sales of as much as 15-25 percent annually
- Seth Godin urges focus on long-term important work over fire-fighting
Bath & Body Works reports growth through customer loyalty.
In news that should be added to the list of “what the CFO should know about loyalty programs”, Bath & Body Works reported in its Q1 2024 earning call that its My Bath & Body Works Rewards loyalty program accounted for 80% of US sales in the quarter. It also shared that active loyalty members increased by 18% from the first quarter of the previous year to reach 37 million total.
CEO Gina Boswell reported that the program had a 93% satisfaction rating and detailed changes to the program introduced in Q4 2023, including exclusive and timely access events to incentivize purchases.
The changes sparked program enrollment, with new customers representing 43% of loyalty program enrollments in the quarter. Terms and Conditions can be found here.
American Airlines reverses its direct distribution strategy
American Airlines Chief Executive Robert Isom recently backtracked on his plans to steer customers away from travel agents. This strategy to eliminate the travel booking middleman was announced last fall when American said it would remove 40% of its fares from many online booking platforms.
The strategy was evangelized by Chief Commercial Officer Vasu Raja and the purpose was not just to reduce costs but to gather more information about customers as well as provide better service. The strategy backfired, and after the recent announcement of an earnings downgrade, CEO Isom made the announcement along with sharing the departure of Raja from the airline. The saga makes a good case study for why customer loyalty should be treated as a C-Suite initiative to ensure that tactics and strategies conceived as favorable by one part of the business does not have enterprise impact.
Microsoft Rewards
As you hammer away at the keyboard on a busy workday, you might take for granted (if you are a PC user) that you are using Microsoft software and in turn miss their rewards program. Microsoft Rewards allows members to earn points by searching with Bing, taking quizzes, and playing trivia games that are updated daily. You can use the points to redeem gift cards or donate to a cause of your choice.
It’s one of those loyalty programs that rewards you for doing what you generally do every day – search, shop, or play with Microsoft games. They also run quick win sweepstakes and “spin to win” contests. For example, in this one, each player has the chance to win one of the following: $1,000 USD Check, $500 USD Prepaid gift card, Surface Laptop 5 (13.5 inch) Platinum (Alcantara®), Xbox Game Pass Ultimate – 12 months subscription, Xbox Series S Console 512 GB, 500 Microsoft Rewards Points, 200 Microsoft Rewards points. We didn’t hit the big prize, but you might. Learn more about this program here and play the game.
Are we in a Golden Age of Loyalty Programs?
We know that over 60% of brands surveyed have indicated they will increase their investment in customer loyalty in the coming year. We have witnessed first-hand lots of innovation as the result of our participation in the judging panel at the International Loyalty Awards this year. You can see all the winners of that competition here.
While various forms of loyalty program articulation have been in the market for over 100 years, the momentum for the concept continues to accumulate. This article points out that we may be living in a Golden Age of customer loyalty. The author quotes Sky Canaves, a senior analyst at Emarketer as saying “Everybody wants to be part of the upper 50 percent that the consumers are participating in.” The loyalty game is becoming more competitive, and the stakes are high. Read about it here.
New OAG Report shows that Gen Z is looking for something beyond traditional FFP’s
To produce its new report “Beyond the Ticket: Winning Traveler Loyalty with Rewards and Ancillary Services” OAG surveyed 2,000 North American travelers to analyze what services, ticket inclusions and rewards programs are driving purchasing behaviors. They found travelers want to travel but are cost conscious and less swayed by traditional airline loyalty programs. As Gen Z and Millennial preferences redefine what loyalty programs look like, airlines will need to rethink what matters most to travelers to engage customers more deeply.
The report also showed that travelers are jet-setting in droves, with 64% taking 3 or more trips in a year. That finding served to reinforce one reason why business travel continues to be a chore in 2024. Tight cabins, no room to work, etc. Will there ever be a section of the cabin reserved for business travelers?
Balancing cash discounts with the actual cost or processing cash
In our article New Merchant practices threaten Co-Brand Card Rewards, we raised awareness of a trend where restaurants and mainstream merchants are adding a surcharge to the tab for customers who pay with a credit card. A universal desire among merchants is to reduce the cost of merchant processing, and some are offering cash discounts to encourage a shift from card to cash.
This detailed article from PYMNTS.com cites a US Federal Reserve report and notes that while consumers still made most of their payments in person in 2023, the increase in card payments without an associated increase in cash payments suggests that the share of cash payments is not likely to return to pre-pandemic levels absent a significant shock to the payments landscape or economy. This is must-read material for people who create customer journeys.
91% of UK public engaged in loyalty schemes
According to research from The Gift Card and Voucher Association (GCVA), 91% of the UK public are now actively involved in loyalty programs. The report shows evidence of rewards schemes reflecting a broad appeal across different demographics and income levels.
Among trends cited, there is sector information shared, for example that supermarkets boast the highest penetration among all retail categories, with 88% of consumers using loyalty schemes for their essential shopping needs.
12th edition of For Love or Money™ available NOW
The 12th edition of this the annual report of Australian customer loyalty and loyalty program research is now available. Results show that 50% of loyalty program members have become actively involved in ALL of the programs in which they are a member. This is the highest active rate as tracked by the research since 2021 where only 43% of members reported they were active in all of their programs.
Report author and CEO of The Point of Loyalty, Adam Posner said “With economic uncertainty and everyday living expenses increasing, it’s not surprising members are more actively engaged with programs they know and trust to earn more savings and rewards.” Download the report here.