Pinpon Report: How Rewards Help Build and Engage Communities — From Airlines to Mobile Games
Bringing forward the best-in-class brands showing how reward systems are helping them build, grow, and engage their communities.
If you prefer reports in PDF format, here’s the link: grom.org/brand-loyalty.
Table of Contents
Rewards and Customer Loyalty Framework
- Delta Air Lines
- FC Barcelona
- Nike
- Starbucks
- Target
- Marriott
- Amazon
- Burger King
- Coca-Cola
- World of Tanks
Preface
In the next era of Brand Wars, we have two options: lose our hard-earned customers to the competition or invest in building a brand that customers truly love.
In this report, we would like to bring forward the best-in-class brands showing how reward systems are helping them build, grow, and engage their communities.
In the report, we often use the term “community” as opposed to just customers as it allows us to apply a more personalized form of relations between a brand and its consumers.
Brands earn trust by delivering quality service and providing customers with benefits they can’t get anywhere else. Instead of chasing new clients, brands could put more effort into maintaining relationships with the old ones. Companies today can build loyalty from their customers by understanding how to make their lives better and more convenient.
We examined 12 global brands from airlines to mobile games to find out what ingredients of their loyalty programs make them so successful in competing to retain their customers.
We reaffirmed reward systems are one of the most flexible and efficient ways for a brand to interact with customers. Incentives for activity, cashback for purchases, rewards for reviews, personal discounts, premium functionality, special offers and bonuses, reputation systems, and others.
Previously, loyalty programs were primarily used by airlines and chain stores, but the trend has shifted, and now brands in many industries offer programs to reward customers for their loyalty. Customer loyalty and engagement can make or break companies, and as such, loyalty reward programs represent strategic investments for all types of organizations.
We hope you find this report to be an insightful read. If we can be of further assistance in helping you better understand the loyalty reward programs and new tech approaches on the reward horizon, please reach out to us. We would be delighted to help you navigate the challenges and seize the significant opportunities of today’s dynamic loyalty reward environment.
Happy reading!
Rewards and Customer Loyalty Framework
What’s Brand Loyalty?
Сonsumers were asked to define what brand loyalty is for them, and these were the answers. It is repeat purchasing (67.8%), “love” for the brand (39.5%), and finally, preference despite the price (37.7%).
Confirming the above explanations of brand loyalty, 36.5% of shoppers said they would spend more on products if they were loyal to a brand, even if they could find cheaper options elsewhere. In addition to spending more, most brand lovers (59.3%) would also refer their friends and family to brands they are loyal to, expanding the community of brand-loyal customers. ¹
Loyalty Framework
In an attempt to better structure the loyalty framework, we found another piece in Yotpo’s research giving us good thoughts about loyalty’s nature and its main drivers.
This flexible and dynamic framework takes into consideration the motivation and context of why a customer is buying from a brand in the first place. It’s comprised of three approaches to loyalty, each of which tackles different consumer needs and business goals: Transactional, Functional, and Emotional.
To understand the difference between the approaches, think about why you love your favorite coffee shop. Most likely, you’re loyal for one of the following reasons:
- Good value for money (Transactional)
- Convenience or quality (Functional)
- Just love it (Emotional)
Brands don’t necessarily need to be excellent at everything to win a customer’s loyalty. They can choose an approach that brings the most value to their customers and addresses their specific business goals.
The Transactional Approach focuses on lowering the barrier to entry in the early stages of a brand’s relationship with a consumer.
The Functional Approach creates value above and beyond the purchase to turn occasional buyers into loyal customers.
The Emotional Approach caters to customers who love the brand for reasons that go beyond price and functionality. These are the customers who are willing to pay more because of their emotional connection to a brand. ²
With increased competition, brands are continually driving down prices (and margins) to make the sale. Savvy consumers can easily find what they want at the cheapest price with a quick Internet search, forcing brands to think outside the box to keep customers coming back. To add value to the customer relationship, brands must demonstrate they understand what their customers want through personalized and relevant experiences.
Recently, CrowdTwist (acquired by Oracle in October 2019) conducted research into what makes customers loyal, how loyalty programs can help drive better customer experiences, how to create the shopping experiences that consumers want, and how to engage customers beyond their purchases.
Building brand loyalty transcends mass marketing “feel-good” campaigns and is meant to strike at the hearts and minds of consumers. With increasing competition, both in attention and price, brands are tasked with creating meaningful relationships with their consumers at every interaction. While consumers have an appetite for loyalty programs, creating one that consumers continually engage with both from earn and a burn perspective is a key indicator of program success.
When asked to describe the emotion they experienced when they think about their favorite brand, almost half of the respondents answered “happy.” The second strongest emotion was “understood.” ³
Loyalty programs are truly in demand! The following statistics illustrate this:
- 87% of gen Z consumers want reward points for visiting a brand’s store, a restaurant, etc.
- This generation is quite willing to pay a premium to receive perks like free shipping, as 77% of gen Z consumers reported
- 82% of gen X customers participate in at least one loyalty program, and 77% of them redeem their rewards at least once in a quarter
From the perspective of a business, the importance of a loyalty program is pretty obvious! Consider the following statistics to understand this better:
- An average American business loses 15% of its customers every year!
- 68% of millennials indicate they need a loyalty program to keep buying a brand
- The cumulative loss to businesses due to customer churn is estimated to be a staggering $1.6 trillion per annum!
- New customer acquisition can cost 10 times more than retaining customers
- 54% of consumers do repeat business with a company that offers loyalty points ⁴
Given this, it’s not surprising that the loyalty management market will likely grow at a phenomenal 23.3% CAGR, and the value of this market will reach $9.28 billion in 2024 from $2.617 billion in 2018. ⁵
And what exactly makes a consumer feel happy or valued? Asked what makes them loyal to a specific brand, 72% of respondents answered a good product selection, 67% answered that the products are fairly priced, and 43% said a good shopping experience.
Loyalty programs provide brands with a competitive advantage. 62% of the consumers surveyed answered that they could be persuaded to choose one brand over another due to the presence of a loyalty program.
71% of the consumers surveyed are active in at least one to five loyalty programs per month. 56% of respondents have at least one loyalty program app on their phone.
The reward redemption is also comparatively high. 68% of people redeem rewards at least once a quarter, and 25% of those redeem at least once a month.
The main reasons consumers abandon loyalty programs are because the rewards aren’t compelling or relevant enough (27%), or it takes too long to earn points (27%). 54% of consumers said the number one reason they join a loyalty program is to save money. The second biggest reason consumers join is for member-only perks such as free shipping and free samples.
The research found that 39% of consumers want free delivery and 29% want special member prices and perks as a loyalty program member. Consumers are less interested in VIP events or access to exclusive sales promotions. This may be indicative of the fact that many brands have yet to personalize their loyalty experiences to be inclusive of geotargeting their rewards.
Reviews and surveys provide brands with valuable feedback about their products and services and can help steer business strategy.
The research found that consumers want to be rewarded for recommending or endorsing a brand. For example, 72% of consumers answered that they would write reviews or refer their friends to earn points. In addition, 87% of respondents answered that they would refer friends and family to their favorite brand. ⁶
Even though more brands are offering to join incentives to improve customer acquisition and the number of people overall joining loyalty schemes is increasing rapidly year on year, the issue now is that loyalty programs are common and commoditized. Consumers may join programs of brands they like, but they limit their participation to only a few programs that offer them relevant rewards and that keep them engaged with the right interactions, in the right place, at the right time, which many businesses are struggling to do.
Increasing customer retention by 5% can increase profits by up to 95%, so a loyalty scheme can play a major part in an uplift in profit. And that’s because loyalty scheme members spend significantly more too — 30% more with traditional retailers than other shoppers.
Customers are switching brands and retailers more than ever before. Consumers no longer have to be brand loyal — they can research online for better prices and are more prepared to shop around.
This is making customer acquisition harder. It can cost 7 times more to acquire a new customer than it costs to keep them. And according to Gartner, 65% of a company’s business comes from existing customers.
Brands must stay relevant and offer their customers what they want, otherwise, they are just a click away from being forgotten. ⁷
Bringing in new customers can cost as much as 10 times more than retaining current clients.
The first rule of any business should be to retain customers and build a loyal customer base. Efforts to increase customer retention should take priority over customer acquisition for almost all businesses at almost all times, experts say. Without a dependable base of repeat customers, organic growth and longevity are impossible — regardless of how many new customers the brand brings in the door.
13% of unsatisfied customers will tell 15 or more people about their lousy customer experience.
The best way to boost customer retention? Don’t give shoppers a reason to walk away and look back in anger. Dissatisfied customers will abandon the brand without giving a chance to improve. And that’s not even the worst part — they are highly likely to badmouth the brand behind its back. Here’s another reason a retained customer is worthwhile: With every unsatisfied customer, the firm is likely to lose 15 or more future prospects. Those are some serious long-term consequences.
Surprise offers or gifts are the best ways to engage 61% of customers.
What is customer retention supposed to look like? According to a 2019 report, consumers increasingly prioritize instant gratification when it comes to redeeming rewards. Unexpected incentives help them feel valued by their favorite brands, fostering stronger emotional connections. Younger consumers from the millennial (55%) and Gen-X (38%) generations especially appreciate brands that offer creative and unexpected rewards, whether on social media or in stores.
The top 10% of one’s customer base is probably spending three times more than an average customer.
This is the most important reason repeat customers are the brand’s best friends when it comes to its survival and growth. That’s the word from an Adobe reported based on analysis of anonymous data from 33 billion visits to 180 online retail websites representing $51 billion in annual U.S. online sales and €18 billion in European sales.
95% of loyalty program members want to engage with the programs via cutting-edge technology.
Technology like chatbots, artificial intelligence, virtual reality, wearables, and connected in-home devices support the creation of new ecosystems for retailers and consumers. Integrating loyalty programs with customer experience promises to be a game-changer for marketers.
Customers who have an emotional relationship with a brand have a 306% higher lifetime value.
Customer retention metrics demonstrate that emotionally committed customers are also more likely to recommend the company — 71% compared to the average rate of 45%. Customers who connect a coffee brand with the warm feeling they get when spending time with their families will spend an annual sum of about $699 with the company. A regular, satisfied customer will spend an annual sum of only about $275. ⁸
The Winning Formula for Loyalty
This new trend of customers resisting the price war is something savvy retailers can capitalize on. To give you another perspective, think about customer loyalty as friendship. Buyers who are also brand advocates will stick with you even when the competition is offering a bigger discount.
But what are the factors that play a role in developing friendship? According to the Friendship Formula, there are four aspects: proximity, frequency, duration, and intensity. Let’s see these in the context of a loyalty program.
- Proximity: In order to be easily reachable by members, a loyalty program should be present on all available channels — on the website, on social media, on their mobile, in the store, and even in the customers’ daily life. Moreover, these channels should be seamlessly tied together with a sound omnichannel strategy
- Frequency: One big takeaway from customer lifecycle marketing is that true loyalty cannot be formed if people are only engaged when they buy something. Step beyond transactions and develop touchpoints outside of the buying cycle
- Duration: Design your loyalty program with longevity in mind. Launch with a solid MVP, and add some spice later down the line with gamification, customer profiling, and holiday campaigns. This is a strategy proven by Antavo’s client case studies, as all of them started out with a more basic loyalty program, which was then expanded
- Intensity: Make sure that the incentives are memorable. Forget the discounts; people want experiences. These can be experiential rewards, VIP perks, special interest groups, etc. ⁹
Premium Loyalty Programs
Premium loyalty programs work well because they’re targeted to the brand’s top customers — the top 20% to be specific. This group of customers is already responsible for 80% of a retailer’s sales on average. And with the creation of a premium loyalty program, they’re likely to spend even more. On top of that, these customers are also most likely to advocate for the company to friends and family.
By offering 24/7 access to perks and experiences, premium loyalty programs promise to usher in greater engagement with customers who are often used to waiting for loyalty program benefits to kick in. Take full advantage of this increase in engagement by referencing the extra data coming in about the brand’s best customers. This added context should help the brand better understand their needs and wants, and ultimately tailor their offerings to each specific customer.
Instead of guessing which specific benefits will make the greatest impact on customers, the brand can lean on data gathered over the course of several loyalty moments. Take each interaction with a customer into account as building out new benefits and experiences. Making an effort to personalize each perk with insight gathered from frequent customer engagement will boost the brand’s chances of enticing premium program members and earning their loyalty moving forward. ¹⁰
In a world where many shoppers go to Amazon for the best deal, building true brand loyalty pays off in spades by keeping shoppers on a brand’s website and in stores, regardless of price.
“Price and convenience will always be a factor for shoppers, but the customers who really love your products are looking for something more. In fact, 28.7% of shoppers want rewards to be more interesting, and 38% of shoppers say their biggest loyalty program pain point is that making a purchase is the only way to earn points. In short, shoppers are making it clear that they want to have interactions with your brand that aren’t purely transactional,” says Yotpo research, followed by a suggestion.
Brands should think about how to make loyal shoppers feel special by creating a loyalty program that offers them more than points and price cuts for purchases.
“Get creative when it comes to earning points and redemption options. Consider offering points for customers who engage with your brand by following your social pages or writing a review. For redemptions, offer gifts and swag — 45.8% of shoppers are looking for this as part of a loyalty program.” ¹¹
Cases
Delta Air Lines
One of the largest airlines in North America and the world, Delta Air Lines operates hubs at eight U.S. airports: Atlanta, Boston, Cincinnati, Detroit, Los Angeles, Minneapolis-St. Paul, Salt Lake City, and Seattle-Tacoma. It also has more than 25 international airline partners.
Delta’s frequent-flyer program uses a currency called SkyMiles. That rate makes them the most valuable rewards on a per-mile basis of any major U.S. carrier. The industry standard is 1 cent per mile.
Flying on Delta and its partner airlines is the easiest way to earn miles. But there are ways to rack up miles besides flying, including by using a Delta-branded credit card and spending money with Delta partner companies.
Unlike with some frequent-flyer programs, the miles you earn never expire as long as your account is open.
Delta partners
Delta is one of 20 airlines in the international SkyTeam alliance, which allows customers to earn and use SkyMiles on flights aboard carriers other than Delta.
Earning Delta skymiles through partners
- Hotels and Airbnb
- Auto rentals and Lyft
- Dining
- Shopping
Anyone can join the Delta SkyMiles program for free. But to move up from basic membership to elite status, where the real perks are, customers need to fly the airline regularly. The SkyMiles Medallion program has four levels.
Extra Miles can be earned when customers use Delta credit cards to pay for service.
Skymiles medallion program levels and benefits
All Medallion members get priority check-in and priority boarding. All levels above Silver get priority security lane access and priority baggage service at select airports. Platinum and Diamond members have additional benefits.
SkyMiles are redeemable for flights through Delta Air Lines and its partners. In most cases, customers redeem by booking through Delta’s website.
Key features
- SkyMiles can be earned through partners
- Tier-based loyalty program
- Upper-tiers able to share their membership status with a friend
- Extensive loyalty program benefits
- Web and mobile apps to manage SkyMiles
- SkyMiles customers earn never expire
Key findings
Delta Air Lines have made every effort to ensure that frequent travelers are completely enclosed in their ecosystem. Hotel → restaurant → flight → travel to the destination → hotel → restaurant → travel → flight — the circle is complete. For this, a huge network of partners has been built from whom customers also receive Miles.
We can safely conclude that customer retention is one of the key areas of work for the entire company. A tiered membership system gives customers a special status and additional motivation to retain.
Sources:
https://www.nerdwallet.com/article/travel/delta-air-lines-skymiles-program-the-complete-guide
https://www.delta.com/us/en/skymiles/program-resources/program-rules
As Facebook Streaming grows in popularity, the social media giant recently rolled out a new feature that allows users to monetize their streams. Viewers can buy Stars and send them to streamers. Fans can also send animated, virtual gifts attached to different star amounts that will appear in the streams.
The interesting thing is that for every Star a user receives, Facebook pays an extra USD .01. Facebook gave the content providers a good platform to process donations from viewers, rewarding live video creators for high-quality streams.
It keeps the Facebook streamer community happy and satisfied, and at the same time, viewers keep on visiting Facebook to get content they want. Simple rewards and donations platform works very well for the brand in this field.
Key features
- Rewards for content providers
- Withdrawals to a bank account
Key findings
Evaluating the Facebook innovation, we can see that the platform actually designed its own internal currency called Stars, so that the users producing quality video content can receive actual money and viewers can interact with them by donations.
When content is evaluated not only by likes but also by a monetary equivalent, it leads to a whole new level of engagement and content quality across social media. To catalyze this kind of engagement, Facebook uses rewards paid to content providers. Maybe in the near future, we will see this system rolled out for the entire Facebook network.
Sources:
https://www.facebook.com/business/help/903272529876480
https://www.facebook.com/help/522390401866401
https://www.streamscheme.com/how-facebook-gaming-streamers-make-money
Reddit announced that they wanted to expand a program designed to let users reward one another for their contributions, using blockchain technology.
As they stated, “Our goal is to find a solution that will support hundreds of thousands of Community Points users on mainnet today, and can eventually scale to all of Reddit (430 million monthly users).“
What are Community Points?
Community Points are a way for Redditors (Reddit users) to own a piece of their favorite communities. As a unit of ownership, Points capture some of the value of their community. They can be spent on premium features and are used as a measure of reputation in the community.
People earn Points by contributing to the community, for example by submitting quality posts and comments. Based on these contributions, the community ultimately decides how many Points each person receives.
Community Points are a tool for communities to customize in their own way. They choose what to call their Points, what they look like, and how they are used in the community. Community Points can be gifted, tipped, and transferred between users.
In subreddits that have Community Points, polls have two sets of results
- The normal count, where one member gets one vote.
- The weighted count, where members get one vote for every Point they have.
By giving weight to votes, Community Points let a community see how core contributors feel about a question or decision.
Community Points can also be used to get a Special Membership in that subreddit. Memberships give them access to several premium features:
- Badges
- Animated emojis
- GIFs
Reddit wants their Points to be run on a public blockchain, that user balances and transactions will be public and tied to Reddit usernames.
A Reddit spokesperson confirmed that 22 projects had submitted their proposals for the scaling competition (including Minter Network).
Key features
- The blockchain-run user engagement program
- Points are traceable, without expiration, owned by users
- Points can be exchanged, sent, and sold
- Regular points distribution for all engaged users
Key findings
This is a truly unique initiative coming from one of the social media giants. The company is not ambiguous in stating that it wants to issue private money so that the various communities within their platform can master their economy and reputation system based on rewards relationships.
According to Reddit, having a community’s own currency can breathe a new life into the processes and quality of interaction within their platform. At the same time, Reddit will periodically distribute funds among all of its users in accordance with their reputation expressed in the number of Points earned. All of this is built on reward mechanisms.
Sources:
https://www.reddit.com/community-points
https://www.reddit.com/r/ethereum/comments/hbjx25/the_great_reddit_scaling_bakeoff/
FC Barcelona
In the summer of 2020, FC Barcelona was seen in a very interesting initiative related to the interaction with its fans.
Supporters of the premier soccer club have bought up well over $1.3 million worth of tokens designed to provide fans with greater input into the running of the club.
As well as offering the chance to voice their opinion in club surveys each season, fans will also get the chance to win special prizes by taking part in polls. In exchange for their participation, they can win prizes associated with digital experiences and activities such as, for example, the chance to take part in meet and greets with the players, see games at the Camp Nou, or enjoy a VIP experience in the stadium.
The first survey entails asking fans to send in their different designs for a new mural that will appear on the first team locker room wall. From all the designs, four have been chosen and supporters with Fan Tokens are able to decide which of the four they would like to be used as the design that players will see before they go out onto the pitch.
The token is designed to help promote fan engagement. Staying true to the club’s unique governance structure, supporters can earn tokens from participating in surveys and polls, which can be used to purchase merchandise and various club experiences. The first poll will give supporters the opportunity to decide on the design of a new mural for the first team locker room.
Key features
- The blockchain-run user engagement program
- Points (tokens) are traceable, without expiration, owned by users
- Rewards for taking part in special activities
- Tokens have an exchange rate, can be swapped, sent, and sold
- Tokens give the right to engage in exclusive club activities
Key findings
An excellent example of how modern technology is used in running a loyalty program. Community money gives the right to an exclusive relationship with the brand. Token ownership emphasizes and defines a fan’s affiliation with the community, and activities are encouraged by the brand with rewards.
Sources:
https://www.coindesk.com/fc-barcelonas-token-sale-hit-1-3m-cap-in-under-2-hours
https://www.fcbarcelona.com/en/news/1692426/first-bara-fan-tokens-sell-out-in-less-than-two-hours#
Nike
Nike, being a huge international brand, has never fallen behind in managing the loyalty of its customers and does also offer reward programs to its loyal customers.
Their member rewards program executes special offers throughout the year, like birthday promo and others.
Nike Membership connects customers to exclusive shoes and gear, events, athlete stories, and running and training programs to help them reach their potential — all through Nike Member Rewards. Membership is free, and customers will have Rewards available to them the minute they sign up.
Membership in NikePlus, which it bills as “the very best of Nike,” is at the center of Nike’s direct to customer growth strategy. The 170M members of the program get benefits for both shopping and using its family of apps. There are three things that set Nike’s approach apart:
Loyalty has a higher calling than a promotional firehose. Nike prioritizes loyalty and membership as part of the company’s corporate strategy for growth. In his FY2019 letter to shareholders, Mark Parker referenced members and membership six times and attributed 35% growth in digital revenue to the expansion of the program.
Exclusivity, access, and innovation are front and center. NikePlus members get access to shopping perks like free shipping but the emphasis and focus is on access and exclusives rather than percent off. It consistently tests new kinds of partnerships and benefits to keep the program fresh and exciting. For example, in November, it introduced “Member Days,” where program members could unlock a new benefit — such as a free gift with purchase, rewards for doing a workout in Nike’s training apps, or first access to the new Kyrie 6 shoe — each day for six days.
Member insights impact omnichannel experiences. The member experience and exclusive offers aren’t just limited to mobile, web, and email. Nike brings membership to life in its stores as well with express checkout, special store hours for members, and a members-only floor at its flagship store in NYC. It’s also using member data to enhance the value it delivers for members through hyper-localized store formats: at the end of October, Nike expanded its Nike Live concept with two new stores in Long Beach, CA, and Tokyo, Japan.
Key features
- A free membership program for customers with exclusive offers and benefits
- Constant innovations with the customer loyalty program
- Usage of loyalty and memberships as a community growth tool
- Rewards for interacting with brand apps and participating in events
Key findings
Nike is at the epicenter of customer loyalty innovations. As described above, the brand prioritizes loyalty and membership as part of the company’s corporate strategy for growth. Specifically, targeted investment in constant interaction with customers outside the shopping process, rewards for their actions, and offering exclusivity status all lead to increased sales and customer base growth.
Sources:
https://www.nike.com/membership
https://www.nike.com/help/a/member-benefits
Starbucks
“Since introducing Starbucks Rewards ten years ago, we’ve experienced tremendous growth and continued to evolve the program to meet the changing needs and purchase patterns of our customers,” said Matthew Ryan, firm’s Chief Marketing Officer.
The industry-leading Starbucks Rewards program — introduced in 2009 — continues to surge in popularity. Membership has grown more than 25% over 2017–2018 years alone, climbing to 16 million active members as of December 2018, a 14% increase over the prior year. Starbucks Rewards transactions accounted for 40% of tender in U.S. company-operated stores in the same time frame.
In March of 2019 Starbucks announced a suite of enhancements coming to its rapidly-growing Starbucks® Rewards™ loyalty program, bringing more than 16 million members flexibility and choice when redeeming Stars at Starbucks® stores.
Program updates include:
- Easier and Faster: All Starbucks Rewards members earn Stars toward free Rewards from the day they join, bringing immediate value to customers. This change means members can earn enough Stars to redeem a Reward in as few as 2–3 visits
- More Choices: A new, tiered Rewards structure will replace the current single option at participating Starbucks locations, offering customers more ways than ever to use their Stars toward free items
- Personalized Offers along with dozens of additional opportunities to earn Bonus Stars through monthly Double Star Days and more
- No Star Expiration for Chase Credit/Debit Cardholders: Stars earned by Starbucks Rewards Visa Credit and Prepaid members will no longer expire
Key features
- Various types of rewards to stimulate customer loyalty
- Tiered model, simplicity, and availability for all customers
- Personalized offers
Key findings
The top management of the company makes clear what role rewards and loyalty programs play in Starbucks’ business growth. Systematic investment in an understandable and accessible customer loyalty program has paid off. The company focuses on the visibility, clarity, and personalization of customer rewards to drive customer loyalty and sales growth.
Sources:
https://www.starbucks.com/rewards
https://www.starbucks.com/rewards/terms
Target
In October of 2019, Target launched its new data-driven loyalty program, called Target Circle, following a year and a half of beta testing in select markets. The program combines a variety of features, including 1% savings on purchases, birthday rewards, and personalized offers and savings designed to make the program more attractive to consumers.
It also includes a way for customers to vote on Target’s community giving initiatives, which helps direct Target’s giving to around 800 non-profits in the U.S.
The new program is designed to lure customers who have yet to adopt Target’s store card, REDcard. With Target Circle the retailer has another means of generating loyalty and establishing a connection with its customers on a more individualized basis.
A big part of that is the personalized aspect of the Target Circle program. In addition to the “birthday perks” (an easy way to grab some demographic data), customers will also get special discounts on the categories they “shop most often” — meaning, Target will be tapping into its treasure trove of customer purchase history to make recommendations from both in-store and online purchases along with other signals.
According to a recent retail study from Avionos, 78% of consumers are more likely to purchase from retailers that better personalize their experiences, and 63% are more open to sharing personal information if retailers can better anticipate needs.
Circle members will also get early access to special sales throughout the year. Target says, in time, it will come up with “even more personalized, relevant ways” to make shopping easier for its customers.
Key features
- Data-driven loyalty program
- Deep personalization
- Various types of rewards to stimulate customer loyalty
- Voting right in certain brand initiatives
Key findings
Like many other big-name brands, Target excels at managing their customer loyalty. Along with offering the core values of loyalty programs such as personalization and rewards, Target gives its customers the opportunity to feel connected to a community built around the brand. The right to vote is one of the factors that reinforce customers’ connection with the brand.
Sources:
https://www.target.com/c/terms-conditions/-/N-4sr7l?Nao=0
Marriott
Marriott International, Inc. is a leading global lodging company with more than 7,400 properties in 134 countries and territories.
After merging with Starwood Preferred Guest and Ritz-Carlton Rewards in August 2018, the Marriott Bonvoy customer loyalty program is one of the largest hotel rewards programs in the world. The new Marriott Rewards program encompasses 30 brands across price points, from budget-friendly properties to luxurious getaways around the world.
There are five levels guests can reach with the Marriott Rewards program: Silver, Gold, Platinum, Titanium, and Ambassador. Customers earn a level of membership status according to nights they stay in a hotel. The higher level the better benefits and special offers they get.
There are several credit cards that earn Marriott Bonvoy points. If customers use them with payment for service they receive extra points and special offers.
Key features
- Tier-based loyalty program
- Extensive loyalty program benefits
- Credit Cards allowing to earn amplified points
- Partnerships with other brands
Key findings
A tiered membership system gives customers a special status and additional motivation to retain. Reward program benefits and partnerships with other brands help deliver the best customer service. Marriott places great emphasis on the means of payment by connecting the most popular credit card issuers. When using these cards, additional loyalty points are awarded, which certainly retains existing and attracts new customers.
Sources:
https://www.marriott.com/loyalty.mi
https://www.marriott.com/loyalty/terms/default.mi
https://www.nerdwallet.com/article/travel/marriott-bonvoy-program-the-complete-guide
Amazon
Amazon’s new loyalty initiative, Amazon Moments, provides a simple Amazon loyalty program that allows marketers to better understand what campaigns do well. The platform was mainly created for vendors to be able to better understand their markets. However, the loyalty program will also provide massive changes to how consumers shop on the website. The feature will allow vendors to hone in on what kind of action they want the consumer to complete. For some, this may be to download an app or play a game. For others, it will be to simply purchase and use a product.
One of the brands that were involved in the testing of the product was Disney. Shoppers were given an Amazon credit by reaching a certain level in an online game. This drove consumers to interact with the game further, increasing Disney’s profit nearly seven times what it was before the loyalty program was implemented. Vendors pay Amazon for the incentives. The return that vendors get from the increased marketing and incentive bonus for the consumer, however, well covers the cost of the marketing tool.
Because the cash rewards are in the form of Amazon credit, shoppers don’t have to commit to sticking to one brand in order to use their rewards. This means that there will inevitably be greater variation in products. Shoppers can use their rewards on things they wouldn’t normally buy.
Amazon Moments attempts to remove the work for shoppers by first eliminating the work for its vendor brands. It provides the marketing platform, an online console for budgeting and managing each campaign, and reward fulfillment.
Key features
- Vendors decide what actions to reward
- Rewards in the form of Amazon credits
- Ability to purchase any product with credits
Key findings
A huge marketplace, Amazon gives more opportunities to manage the loyalty program to its vendors. The new Amazon platform allows vendors to tailor the loyalty program the way they currently need. It will make rewards more adaptive and customized to the vendors’ needs and the needs of their customers. Amazon credits make the loyalty program very attractive as they can be used to pay for almost any good/service on the marketplace.
Sources:
https://www.amazon.com/gp/shopwithpoints/marketing.html/?inc=swpchcbcc&pr=swpchcbcc&plattr=SWPCBCC
https://gritdaily.com/inside-the-massive-new-amazon-loyalty-program
Burger King
Fast-food chain Burger King has an impressive number of restaurants in different countries, while each location has its own loyalty programs for customers.
For example, in Russia, the company has launched a very interesting initiative. Burger King has waded into the cryptocurrency market with the launch of its own virtual coin called “WhopperCoin.”
With each purchase of the burger chain’s signature Whopper sandwich, customers can receive WhopperCoin tokens via a digital wallet.
Tokens were intended to be used to reward customers for each purchase of the Whopper, and eventually to buy burgers in exchange for the tokens once a customer had collected enough. The coins can also be transferred and traded online, allowing customers to either save their rewards or sell them to new buyers.
“Now Whopper is not only a burger that people in 90 different countries love — it’s an investment tool as well,” Ivan Shestov, head of external communications at Burger King Russia said.
This very interesting initiative did not last long due to the undefined status of cryptocurrencies in Russia and was suspended shortly after the announcement. But the very fact that the brand is interacting with its community by rewards in cryptocurrency seems an interesting solution.
Key features
- The blockchain-run user engagement program
- Tokens are traceable, without expiration, owned by users
- Tokens have an exchange rate, can be swapped, sent, and sold
Key findings
Despite the fact that the initiative did not last long, this event attracted a lot of attention to Burger King from the buyers and the business industry. The very fact of using tokens as loyalty points is a progressive technology that provides a good number of advantages for a brand to interact with its community.
Sources:
https://www.burgerking.co.nz/rewards
https://www.cnbc.com/2017/08/28/burger-king-russia-cryptocurrency-whoppercoin.html
Coca-Cola
In 2015, Coca-Cola — to meet the evolving desires and expectations of members — introduced a loyalty program that shifted from a traditional, transactional model to a content-based program driven by the community and social interaction. Coca-Cola consumers can now engage with snackable, interactive content, and activities organized around their personal passions, such as cooking, gaming, and fitness, to earn valuable perks. The enhanced focus on content comes with an upgrade to the overall user experience of the program. Members will now enjoy the convenience and ease of a modern interface that is compatible across all mobile devices.
With the new My Coke Rewards program, members are rewarded on their terms for sharing content they are passionate about from the devices they use on a daily basis. The introduction of new ways to earn perks comes with an entirely fresh spin on rewards as well. Members are still able to cash in points for their favorite Coca-Cola beverage coupons and retailer gift cards, but the latest rewards appear in the form of unique, memorable experiences, such as cooking classes with celebrity chefs and premier tickets to sporting events.
“My Coke Rewards has been celebrating our most passionate and loyal fans since 2006 — just for enjoying their favorite beverages. We’re taking that commitment to the next level with this new digital platform by offering experiences that are more personalized, more social, and more valuable than ever,” said Kim Gnatt, Global Group Director, Digital Marketing. “With brand new marketing technology systems powering the loyalty platform, we are able to serve content directly to consumers based on their personal preferences and online behaviors. And by leveraging our partnerships, we’re able to create one-of-a-kind experiences that only The Coca-Cola Company can offer.”
Members who log on to MyCokeRewards.com will find that they can now earn Bronze, Silver, and Gold “status levels” by participating in the new social, interest-based activities. As members climb status levels, complimentary perks are unlocked, including bonus points and access to expanded rewards catalogs. The most substantial rewards are available to Gold status members.
All 23 million existing My Coke Rewards members will retain their current point balance simply by signing into MyCokeRewards.com using their existing account credentials and accepting the new terms and conditions.
Benefits of reward points for registered customers
Once customers register, they will be able to earn and accrue reward points, which are then redeemable at time of purchase towards the cost of their orders. Rewards are an added bonus to the member shopping experience on the site and just one of the ways the brand thanks loyal customers.
Rewards can currently be earned for the following actions:
- Making purchases
- Registering on the site
- Subscribing to a newsletter for the first time
- Sending invitations
- Converting Invitations to customers
- Converting Invitations to orders
- Review submissions
- New tag submissions
Key features
- Rewards for customer interactions
- Usage of loyalty and membership as community growth and engagement tool
- Omni-channel, tier-based loyalty program
- Mobile devices are the main point of brand interaction with customers
Key findings
The Coca-Cola corporation is rightfully one of the leaders in marketing and customer loyalty management. Back in 2015, they introduced a program that rewards customers not only for purchases but also for participating in various brand activities. In this scheme, rewards play a key role as a driver of customer engagement and business growth.
Sources:
https://www.thebalanceeveryday.com/my-coke-rewards-points-what-they-are-and-how-to-get-them-892817
https://www.cokestore.com/reward-points
World of Tanks
World of Tanks (WoT) is one of the biggest online multiplayer games. It is built upon a freemium business model where the game is free to play, but participants also have an option to purchase access to premium features. The focus is on player vs. player gameplay with each player controlling an armored vehicle.
Like many games, World of Tanks has its own in-game economy that helps keep the player community highly engaged.
In-Game Economy
- Credits are the main in-game currency earned in battles. Players get credits for all battle activities
- Bonds are a special in-game currency that is earned in special battle modes and certain in-game activities
- Gold is an in-game currency that players buy or receive for completing special missions
Players receive gold for participating in different contests held by the developers via the official portal, communities, and social media.
Although gold makes players’ gaming experience more comfortable, they can become a successful commander and unlock new vehicles without it. They cannot succeed by simply spending money in the game.
Key features
- Well developed in-game economy to manage players’ loyalty
- Rewards for outside-the-game activities
- Rewards can be transferred between players
Key findings
About 80% of all famous games have their own internal economy and currency; World of Tanks is no exception. The ability to earn this currency and spend it in- or outside the game is the very loyalty program that game developers use. Rewarding players for their useful actions, polls, participation in test versions of the game allows brands to improve their product and, as a result, increase the community, and sales. All the same mechanics as in the 10 brands described above. Rewards are the tool to boost the growth of both community and sales.
Sources:
https://worldoftanks.eu/en/content/guide/wot_economy
https://worldoftanks.com/en/content/guide/newcomers-guide/game_economy
https://www.worldoftanksguide.com/guide-game-currency.shtml
References
- Back to top ↑ Michelle Bitran, “Key Brand Loyalty Statistics,” November 10, 2019 https://www.yotpo.com/blog/brand-loyalty-statistics
- Back to top ↑ “The Loyalty Blueprint A Practical Playbook for Customer Loyalty Programs” https://www.yotpo.com/direct-to-consumer-loyalty-playbook
- Back to top ↑ Oracle, The Marketer’s Guide to Brand Loyalty, April 2020 https://www.oracle.com/a/ocom/docs/dc/em/the-marketer-guide-brand-loyalty.pdf
- Back to top ↑ https://www.devteam.space/blog/top-10-loyalty-apps
- Back to top ↑ Loyalty Management Market — Growth, Trends, & Forecasts (2019–2024) https://www.mordorintelligence.com/industry-reports/loyalty-management-market
- Back to top ↑ Oracle, The Marketer’s Guide to Brand Loyalty, April 2020 https://www.oracle.com/a/ocom/docs/dc/em/the-marketer-guide-brand-loyalty.pdf
- Back to top ↑ Oracle, Loyalty Cloud Brochure https://www.oracle.com/a/ocom/docs/oracle-loyalty-cloud-brochure.pdf
- Back to top ↑ https://www.smallbizgenius.net/by-the-numbers/brand-loyalty-statistics/#gref
- Back to top ↑ https://antavo.com/blog/retail-reward-programs
- Back to top ↑ Premium Loyalty Study, Clarus Commerce, 2019 https://info.claruscommerce.com/WC-2019-PL-Data-Study_LP-2019-DataStudy-Reg.html
- Back to top ↑ Michelle Bitran, “Key Brand Loyalty Statistics,” November 10, 2019 https://www.yotpo.com/blog/brand-loyalty-statistics
Also, see links in the text.
Acknowledgments
We would like to thank the following teams and individuals whose works and research formed the basis of this report:
Michelle Bitran, Andrea Stojanović, Sandra Grauschopf, Lauren Thompson, Ryan Browne, Julia Sachs, Erin El Issa, Joe Cortez, Sarah Perez, Paddy Baker, Sebastian Sinclair, Luci From Stream Scheme, Ellen Cannon, Business Wire, Devteam.Space, Forrester, Yotpo, Oracle, Mordor Intelligence, Antavo, Clarus Commerce.
About Us
If you got down here from the Preface section, press this to continue reading.
We are Pinpon, a Minter blockchain-based project developing a rewards platform aimed to help brands grow their communities by improving loyalty and amplifying virality.
Minter is a blockchain solution that enables any brand, blogger, or community to create their own coin and implement it into reward mechanics suitable for a loyalty program.
For more information and inquiries, please contact:
Mikhail Korytov, Loyalty Engineer
minter.org/korytov | mk@pinpon.io
Disclaimer
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