21st-century loyalty programs are striving to improve their customer experience and impact, from more personalized propositions (e.g., Nectar’s test in the Isle of Wight and Vodafone’s new VeryMe program) right through to new and innovative uses of technology to improve customer experience. Smart technology such as Geolocation, Artificial Intelligence, Augmented Reality, and Virtual Reality is changing the experience of loyalty programs as we know it. As these technologies continue to improve, so do customer loyalty experiences.
Deloitte found that 88% of mid-market companies are already using some form of virtual or augmented reality as part of their business. Artificial intelligence will be a core customer experience investment over the next 18 months for brands. 47% of companies will use chatbots for customer care, and 40% will deploy virtual assistants.
Technology has vastly improved the customer experience of loyalty already since the very first loyalty program was conceived. The early programs were also enabled by the most innovative tech of the time. A decade ago, most loyalty programs all existed through plastic or cardboard cards that were either swiped or stamped after purchase, edging customers ever closer to their generic gift or discount off the next purchase.
Caffè Nero is a classic example of an old program evolving with smart tech – from the paper stamp cards of the last 20 years to the new intelligent app experience, which allows customers to pay directly and allows Caffè Nero to collect data about customers such as the products they purchased, their frequency, time and location of purchase. They can now target customers individually with rewards and incentives to try new products.
Loyalty programs are continuously pushing and improving the boundaries of customer experience with smart tech. The latest loyalty tech hero is British Gas with its Rewards program. Launched in 2017, it now services millions of loyal customers. It’s the first of its kind in the utility sector. It offers unique benefits not available in other programs, such as free energy days and tickets to The O2 in their exclusive Rewards terrace. And now they are doing something to excite their members this Easter – using Augmented Reality.
British Gas Rewards have partnered with Mando-Connect, Spark Lab, and Centrica XR Solutions (a team dedicated to promoting immersive technologies) to create an exceptional and brand new augmented reality experience for their members, which can be accessed online (so there’s no need for them to download a separate app). Members will have the chance to win millions of prizes (including family holidays, intelligent technology devices, meals out, and even chocolate bars) by helping Wilbur the Penguin (the lovable British Gas mascot) to locate Easter eggs – a family-friendly activity. This innovative new gamified and augmented reality experience will be available to all British Gas Rewards customers from 2nd April until just after Easter.
But British Gas Rewards isn’t the only loyalty program using new technology to turbocharge its customer experience.
While many argue that Prime is a subscription, not a loyalty program, there is no discussion of Prime’s impact on people’s loyalty to Amazon. The Prime Day event is an excellent example of how technology can improve the customer experience of a loyalty program. Prime Day deals are specifically for Amazon Prime members, and throughout the event, members receive regular personalized notifications and recommendations. The innovative use of tech has changed the experience of the program and changed the way people shop. 91% of Prime members renew for a second year, and 96% continue for the third year.
Sephora VIB Rouge
Sephora is another powerful example of how clever use of tech has improved the customer experience of a brand’s loyalty program, in this case, Sephora’s Beauty Insider. The Very Important Beauty Insider (VIB) unlocks if $350 is spent during a calendar year. The highest tier, VIB Rouge, is available to customers spending $1,000 or more during the year. VIB Rouge has become a sought-after status marker that the beauty community aspires to have, and members enthuse about the rewards they receive online and even upload “unboxing” videos.
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Using smart tech, Sephora creates personalized newsletters based on Beauty Insiders’ purchases, offering customized beauty profiles based on age, skin type, and personal preferences, as well as profile-aligned gifts. This tech-fuelled personalization has driven higher than ever customer engagement and significantly impacted the brand’s bottom line.
Nordstrom Rewards
Nordstrom Rewards is doing something a little different – using geolocation to improve customer experience and drive sales. Nordstrom Rewards customers make up more than half of the retailer’s sales, so they are an important customer group. Users can create a wish list of their favorite items within the app. If they are within a certain distance of a Nordstrom store, the app uses beacon technology to send push notifications to nudge customers to shop. Imaginative tech driving engagements as well as sales.
Chipotle Rewards
Last but not least, Chipotle has just this month launched their new loyalty program, Chipotle Rewards in America, and is utilizing innovative technology through their partnership with Venmo (the online payments app). It is a perfect use of smart tech to improve customer experience in loyalty, as so many existing customers already use Venmo to split the bill.
So what’s next for smart tech?
Smart tech is significantly improving the customer experience of loyalty programs in the UK and globally. Used right, technology can turbocharge the customer and member acquisition, engagement, and retention and drive sales. We are excited to see what intelligent new uses of technology arrive in loyalty this year – in particular, and we can’t wait to see how virtual Reality can change things. But for now, British Gas Rewards are an exciting Easter extravaganza to think about!
