Meet Guy Thornton
Loyalty is not just the responsibility of the Head of Loyalty, It needs to be cultural – a business wide responsibility.
MY BUSINESS IS FAILING, ITS ALL DOWN TO COVID – ISN’T IT?
COVID-19 disrupted 2020 in more ways than we would ever have deemed imaginable this time last year and we have seen digital disruption accelerate at unprecedented speeds.
A recent Survey by McKinsey, ‘How Covid-19 is changing consumer behaviour – now and forever’ has identified existential shifts in customer behaviour that’s created a new world order in terms of winners and losers, and this happened pretty much overnight. We have covered ‘Decades in Days’ when it comes to the adoption of digital;
Online Delivery – This market grew quicker in 8 weeks, than it had over the previous 10 years
Telemedicine – Customer orders in this channel increased 10x in 15 days
Online entertainment - Disney Plus achieved in two months what took Netflix 7 years.
Newspapers – traditional sales fell 80% overnight and haven’t recovered.
That last example is one that ALL my team and I at News UK were personally affected by.
But the impact has been felt everywhere. From the failure of small businesses, but also some titans of the UK economy. However, there have also been some big wins for brands who have a strong online presence – Amazon and AO World are obvious examples, but also businesses such as Dunelm and Next have posted record growth.
What this tells me is that whilst all key elements of the purchase decision journey are still relevant - ease, convenience and low barriers to purchase are now the key driver of spend and loyalty. The example we all know and love is Amazon Prime. This is backed up by a recent survey by The DMA, How to win Trust and Loyalty – 2020, that found functional excellence also remains fundamental to most consumers (89%) in driving long-term loyalty.
However, this suggests that all Covid has done, has accelerated the decline of businesses that have been sleeping at the wheel and the cream has risen to the top.
SO WHAT DOES THIS MEAN FOR THE LOYALTY INDUSTRY?
Covid has made a mockery of companies investment into Loyalty schemes globally – a few million here and there, on experiences, third party offers or discounts isn’t going to cut it any more. Customers simply don’t care enough, something else The DMA report was able to prove.
‘Compared to 2018, consumer agreement of really valuing the benefits received has declined to two thirds (66% compared to 78% in 2018). The desire to buy from the same retailers to build up as many loyalty points also fell from two thirds in 2018 (66%) to around 3 in 5 (60%) in 2020.’
Amazon spent 10’s if not 100’s of Billions building the infrastructure to make Amazon Prime work and it nearly bought them down, before it could get going, but they stuck to their guns and stayed true to their insight, that customers want it easy and they want it now!
So what can we learn from this and what has it got to do with Loyalty programmes?
It just emphasises the fact that loyalty cannot be a ‘programme’ run by a team, who have to rely on other teams for support and or budget – it has to be at the core of your business, the core to your values, IT HAS TO BE YOUR BUSINESS PURPOSE.
Once that’s the case, every business decision comes back to; are we doing right by the customer? Does it make it easier to buy from us, than elsewhere? Once you are confident of that and you communicate this in relevant ways to different audiences – watch your business flourish.