Brands are living through a ‘Loyalty Renaissance’, where the discipline now has significant C-suite focus, commensurate with the impact it can have on customer engagement and commercial performance.
This is particularly true for travel, retail and consumer packaged goods, whose loyalty programmes have often matched, if not surpassed, the underlying brand(s) to which they belong. Avios, Bonvoy, Accor’s ALL, Nectar, Prime, Shukran, Smiles and Flying Blue are prominent examples of loyalty schemes with their own strong brand identities taking advantage of a fast-growing global loyalty market, which is forecast to record a CAGR of 9.5% from 2024-2028.
The most common strategic themes of this new wave of loyalty design, together with their functional focus are:
The Loyalty Renaissance
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Acquiring customer data and sustaining customer loyalty for long periods is a never-ending challenge that every business faces. While most consumers are members of more than 12 customer loyalty programmes, they are active in less than 50% of those programmes. What makes some programmes more successful than others and how do you make your customer loyalty programme one of those that people use, share and talk about?
At Collinson we work tirelessly with customers to unlock the magic within their business, to design build and deliver the best loyalty programmes that set them apart from their competition and drive desired change – more mindshare, wallet share, advocacy, and Loyalty.
To learn what we’ve done for businesses like yours and how we can leverage Salesforce loyalty management technology across Customer 360 to help you achieve your customer vision and bring your loyalty strategy to life, please get in touch.
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Stephen Gilbert
Vice President Salesforce Loyalty
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Conclusion
Loyalty presents a seismic opportunity for the rail industry, with its ability to:
• Retain customers and increase revenue
• Unify a complex marketplace for the customer
• Create competitive advantage
• Realise the potential of a partnerships ecosystem
• Generate and leverage permissioned data to drive relevance
• Increase customer engagement from enhanced insight
Loyalty programmes are a powerful, but still underexplored tool for transport providers. By better understanding customer needs, offering clear benefits and attainable rewards, personalising the member experience and ensuring seamless integration across the entire journey, transport providers can create loyalty programmes that attract and retain customers as well as differentiate them in competitive markets. Loyalty strategy is becoming a foundational corporate discipline for delivering exceptional customer service and achieving long-term commercial success in the transportation industry.
The complex composition of the rail sector (the branded operator landscape, the separation of network and rolling stock as well as customer usage patterns) demands a structured customer-centric, yet relentlessly commercial approach.
Loyalty strategy plays a particularly important role in the context of multi-modal travel proposition - where the journey is central – across different consumer brands, customer experiences and technology maturity stages. Loyalty programmes are both the glue (a common branded customer-fronting entity) and the oil (the mechanics and the data that binds brands together) that allow a central brand to ‘own’ a multi-modal proposition that guides, supports and rewards customers in their choice of transport.
The distribution landscape in rail and across other modes is also asking for a united, brand-led solution which can work across different operator modes. In effect, loyalty can unify and simplify a complex combination of moving parts for the customer and make the ‘journey’ (literally and metaphorically) more rewarding. It also raises the barrier for new entrants to take the role (and profit) from offering one-stop shop solutions.
Moving parts become one: The role of Loyalty in Rail
Conceived correctly, loyalty programmes create self-fulfilling virtuous circles and are capable of transforming single trips into many happy returns.
Rail loyalty is unlike other (travel) loyalty. On the upside, there is significant commercial potential for single- and multi-modal travel propositions, especially with regard to:
Loyalty: Solutions and Opportunities for Transport
• Customer experience (better data makes for better service; differential service for loyalty members)
• Payments (seamless, digitally-integrated payments)
• Customer service (especially relating to operational issues)
• Cross-mode recognition (leveraging tiered loyalty structures)
However, loyalty is also about influenced choice – which is not always possible in rail given its monopolistic traits, lack of viable alternatives and government policies emphasising travel modes. Legacy systems and control over end-to-end CX (especially the relationship with station operators) provide barriers and challenges that loyalty thinking can more easily overcome.
Specific Challenges and Solutions
Sources:
¹ 1. https://www.researchandmarkets.com/reports/5943572/global-loyalty-programs-market-intelligence
Peter Gerstle,
Head of Travel Product and Loyalty
BY
First things first though. How we do define loyalty? For Collinson, loyalty is the outcome , with a multitude of strategies, tactics and processes working in unison to achieve it. Our strategic advisory approaches brands’ loyalty objectives way beyond ‘points make prizes’ – in fact, a points-based programme is not always needed to achieve true customer loyalty. In our view, there are Six Dimensions essential to achieving loyalty success. These are: Data Strategy, Member Experience, Value Exchange, Technology, Commercial and Execution.
Assessment and enhancement of each of these Six Dimensions will invariably differ for each sector and context but this framework is a sure-fire means of elevating the loyalty offer. ‘Bespoke’ beats ‘generic’ every time and careful definition of an ownable proposition in line with the brand is essential. Building out that proposition with a clear, fair value exchange and loyalty-aligned service process is common to all successful brands.
Partnership ecosystems are much vaunted at present and can considerably enhance the proposition. A loyalty programme provides the perfect structure to leverage the power of partnerships, seamlessly knitting rewards and experiences together from a diverse coalition of brands. Loyalty programmes help customers to make sense of ecosystems, broadening appeal, rewards and redemption opportunities.
To power a real-time loyalty customer experience (a hallmark of leading loyalty programme designs), natively integrated technology with an open API philosophy is a must. Harnessing advances in technology should be a key component of the overall loyalty strategy. That’s why this area is one which Collinson considers essential for successful loyalty offers.
Defining Loyalty and The Six Dimensions
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Brands without legacy constraints are however demonstrating what can be done in rail. Brightline, the privately run inter-city rail route between Miami and West Palm Beach, FL. has embraced multi-modal solutions such as offering Uber vouchers to transport passengers to and from the station. Its loyalty offer includes discounts, partner offers, premium lounges to go with premium tickets and even the chance to win holidays. All in all, this is a well-rounded proposition, offering memorable journeys which are convenient, enjoyable and rewarding.
Programmes like the UK’s National Railcard boost rail travel volumes across a myriad of operators offering different customer segments (such as students, seniors and families) tailored discounts and benefits, showing how loyalty thinking can create a unified proposition across fragmented infrastructure.
It’s clear that rail operators and brands can satisfy commercial requirements, increase customer engagement and operate as a joined up eco-system when loyalty is leveraged in the right way.
With loyalty a C-suite concern and technological advances, now’s the time for players in the rail market to make a strategic move and seriously embrace loyalty. Whether this is as a single operator on a specific route network (such as Eurostar) or as an operator of multiple products serving different market needs (SNCF for example), the opportunity is there to be seized. The biggest opportunity of all is the creation of a backbone between non-competitive, complementary operators.
If rail operators and brands wish to take the central role in multi-modal transport, then players in the industry need to co-operate in order to bind these propositions together. Loyalty should not be seen exclusively as a competitive tool but rather as an enabler of ‘co-opetition’. Loyalty can provide the ‘ecosystem brand’ which enables customers to make sense of the offering and the opportunities that ensue.
For brands wanting to seize this opportunity, Collinson’s strategic advisory is here to help. From our experience of creating lasting loyalty for travel operators internationally, several areas frequently pose significant challenges but well-conceived programmes solve these issues to become well-balanced and attractive schemes.
Balancing Cost and Value
One of the main challenges in implementing a loyalty programme is balancing the cost of rewards with the perceived value. Transport providers must ensure that the programme is financially sustainable while still offering meaningful benefits. This can be achieved by using data analytics to optimise the rewards structure and by leveraging partnerships with other businesses to offer additional value at a lower cost.
Ensuring Engagement
Another challenge is maintaining customer engagement over time. This requires regular communication with members, updates to the rewards structure and ongoing promotions. Gamification elements, such as challenges and bonus point opportunities can also keep customers engaged and motivated.
Integrating Technology
Integrating the loyalty programme with existing technology systems need not be complex. Investing in the right IT infrastructure solution and using advanced data analytics tools ensure smooth operation and provide valuable insights into programme performance. Collinson’s strategic partnership with Salesforce enables our clients to benefit from the native integration of loyalty, communications, service and data analytics – all on an open API connection philosophy.
Making the most of data
We’re entering an era where permissioned data is commercial gold dust. Customer engagement at every touchpoint generates useful data and - in conjunction with AI - creates a power-house for personalisation, hugely increasing relevance for customers as well as providing invaluable insight for use across the business. Ultimately of course, this leads to even greater commercial impact and the ability establish a deep, mutual and lasting relationship with the customer.
Brands are living through a ‘Loyalty Renaissance’, where the discipline now has significant C-suite focus, commensurate with the impact it can have on customer engagement and commercial performance.
IThis is particularly true for travel, retail and consumer packaged goods, whose loyalty programmes have often matched, if not surpassed, the underlying brand(s) to which they belong. Avios, Bonvoy, Accor’s ALL, Nectar, Prime, Shukran, Smiles and Flying Blue are prominent examples of loyalty schemes with their own strong brand identities taking advantage of a fast-growing global loyalty market, which is forecast to record a CAGR of 9.5% from 2024-2028.
The most common strategic themes of this new wave of loyalty design, together with their functional focus are:
The
Loyalty
Renaisance
Real-time (immediate) - function of systems architecture
Utilitarian (meaningful) a function of data collection and insight
Contextual (relevance) - a function of data collection and insight
Defining loyalty and the Six Dimensions
First things first though. How we do define loyalty? For Collinson, loyalty is the outcome , with a multitude of strategies, tactics and processes working in unison to achieve it. Our strategic advisory approaches brands’ loyalty objectives way beyond ‘points make prizes’ – in fact, a points-based programme is not always needed to achieve true customer loyalty. In our view, there are Six Dimensions essential to achieving loyalty success. These are: Data Strategy, Member Experience, Value Exchange, Technology, Commercial and Execution.
Assessment and enhancement of each of these Six Dimensions will invariably differ for each sector and context but this framework is a sure-fire means of elevating the loyalty offer. ‘Bespoke’ beats ‘generic’ every time and careful definition of an ownable proposition in line with the brand is essential. Building out that proposition with a clear, fair value exchange and loyalty-aligned service process is common to all successful brands.
Partnership ecosystems are much vaunted at present and can considerably enhance the proposition. A loyalty programme provides the perfect structure to leverage the power of partnerships, seamlessly knitting rewards and experiences together from a diverse coalition of brands. Loyalty programmes help customers to make sense of ecosystems, broadening appeal, rewards and redemption opportunities.
To power a real-time loyalty customer experience (a hallmark of leading loyalty programme designs), natively integrated technology with an open API philosophy is a must. Harnessing advances in technology should be a key component of the overall loyalty strategy. That’s why this area is one which Collinson considers essential for successful loyalty offers.
For more detail on rail loyalty please get in touch.
Stephen Gilbert
Vice President Salesforce Loyalty
Contact me
Real-time (immediate) - function of systems architecture
Utilitarian (meaningful) a function of data collection and insight
Contextual (relevance) - a function of data collection and insight