Loyalty Tag

Loyalty cards are a major asset, especially after so-called non-essential businesses have had to close their doors and are found to be in competition with online stores. It is well known that the French are friends of loyalty cards. Just take a look at their wallet to see dozens of loyalty cards. Marketing process that has brought so much success and whose role is to build customer loyalty. What is the relationship with new technologies?

The traditional loyalty card for the purpose of retaining local customers: merchants or restaurateurs who have their own shop often offer one so that customers automatically return to their shop and not to that of the competitor (hairdressers , beauty salons, perfumeries, dry cleaners, etc. often offer them). The customer is happy to imagine the moment when he will be able to take advantage of the advantage and the same is true for large entities such as Sephora, Marionnaud, etc.

4 assets

Encourage to come back

The idea of ​​offering a loyalty card is simply to entice your customers to come back.

Reward customers

Offering a loyalty card to your customers is a money to prove to them that their loyalty has value in your eyes. It even happens that customers themselves ask the merchant if he has a loyalty card.

Reinforce the brand image

A communication medium that customers keep in their wallet and therefore see the loyalty card daily. They are therefore led without realizing it to think of your business.

A database will be created

Before giving a loyalty card, it is a good idea to sue a customer by filling out a form under the pretext of, for example, giving them a gift for their birthday such as One Day Elsewhere. This is also an opportunity to find out your e-mail address or telephone number. It is relevant to remind them by sms without being too invasive.

But are customers still addicted to cards?

Loyalty cards still seem to satisfy the French according to the TNS Sofres survey (Reference of marketing and opinion studies in France) carried out after 10,500 French households in 2016. The invasion of new technologies has not changed their habits. Indeed, the latter retain an average of 7 loyalty and payment cards with them.

What type of cards do the French offer?

72% of magazine customers have a standard loyalty card. A figure that shows the interest in this loyalty lever. In 2010, customers did not have 5 loyalty cards compared to 7 today.

If the loyalty card is a good means of loyalty, I believe it is suitable for customers to bring distributors.

What cards?

The subscription card which offers a systematic discount. It’s a long-term mechanism. The ideal solution to retain your customers over the long term.

The stamp type card that allows you to count the number of visits by your customer to grant him a discount on the next visit. The system invites customers to come regularly and they get a reward which is the prize reward.

The point letter based on the amount spent. The longer the customer stays, the greater the accumulation of points. These points can be used to gain access to free or discounted products or services.

Paper map or digital map?

With the emergence of new technologies, the paper loyalty card may seem obsolete. However, the French are still addicted to cards, this is revealed by BNP Paribas Personal Finance. The entity lists no less than 185 million active cards in 2016, based on a TNS Sofres survey carried out among 10,500 French households. Consumers have an average of seven cards; some of them, such as loyalty programs, are part of the link forged with the retailer and the brand.

In conclusion, I know that:

• 90% are sensitive to promotions and discounts
• 74% are sensitive to gifts
• 80% like to be victimized as followers of the sign
• 55% are ready to go to the same store to make their purchases.

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In the French and international long-term rental markets, the various players in the ecosystem have implemented many initiatives to retain their customers. Whether transactional, service-based, or even experiential, the benefits shown often refer to the tipping point that vehicle renewal represents.

But more and more market players are trying to retain customers throughout their life cycle, with increasingly varied mechanics. In this article, VERTONE deciphers the latest loyalty practices in the LLD market.

Mainly transactional profits, but with a tendency to diversify

Many of the benefits offered to customers take the form Financial benefits. Since the time of vehicle renewal is especially focused, many players offer discounts to customers if they decide to renew their vehicle with them. These discounts take a wide variety of forms:

• Deductibles on repair costs (for example, Porsche Financial Services, Lexus Financial, etc.);
• Reduction in financing rates for the next vehicle (for example, Audi Finance in the United States, Volkswagen Plus program in Canada, etc.);
• Cash reimbursement or first rental(s) offered on the new vehicle, offered by numerous manufacturers or their financial captives in the North American market;
• Some players combine the above approaches and offer the client a choice of several financial advantages. This is particularly the case for Infiniti in Canada, which offers, through its captive, the choice between a discount of up to 1% on the financing rate of the next vehicle or a cash discount of up to $2,500.

Beyond the financial benefits associated with renewal, some loyalty programs also offer various discounts, in the form of coupons on associated brands or discounts for any purchase of goods or services. These programs are common among dealers, both in the French market (eg SJ Automobiles, Hamon Automobiles) and internationally (eg Fred Beans in the United States).

But more and more players are branching out and now offer both relational and experiential benefitswith the aim of improving the customer experience by addressing a series of its bread points or committing it more strongly around the brand. These are some of the benefits offered in the market, in particular by manufacturers and distributors:

• Implementation of customer service dedicated to program members, with availability 24/7 (programs jeep wave Where My GM Rewards);
• Free provision of premium services such as concierge services or vehicle maintenance;
• Access to personalized advice about the car or financing methods existing in the market;
• Access to events organized by the company around the engine, bringing customers together around a common passion and thus creating a brand community. Jeep thus offers each year to the members of the program jeep wave to participate in the Jeep camps, which bring together thousands of drivers to practice off-road driving.
• Access to sporting or cultural events and meeting with brand ambassadors (eg Audi).

Loyalty initiatives are rarely integrated into comprehensive programs

Among the various benefits offered by automotive market players, many are displayed as part of specific initiativestargeting a particular moment of the life cycle, generally the moment of renewal of the vehicle.

Some manufacturers and distributors, meanwhile, take a more holistic approach and take advantage of multiple customer contact opportunities to try to retain customers throughout their life cycle. To do this, they offer loyalty programs by points or in the form of a benefits club, and show both economic and relational benefits, advocating for a customer first. Several programs stand out in the market:

• Program Volkswagen More in Canada: benefit programs accessible to all owners or lessees of Volkswagen vehicles, and giving access to reductions in financing rates, preferential rates in partner offers, but also advice on financing methods offered by the company or in events around the brand.

• Program My GM Rewards in the United States: regulatory points program (Silver, Gold and Platinum status, based on a combination of different criteria, such as billing per customer for 3 years or the level of spending on the purchase of optional services). The statuses give access to transactional benefits of different value and the Gold status allows you to benefit from service and experience advantages, such as access to a dedicated customer service.

It is interesting to note that some players, like GM, reserve high-end benefits for the best customers : the objective is therefore, based on the value of the client, to identify the clients to whom the generosity should be assigned in priority.

An approach that can also be found in the American bank Hartford Firefighters Federal Credit Union, which grants greater generosity on the income of conventional loans to older clients: the generosity offered increases constantly each year, until the twentieth year of seniority (0.05pts/ year on the rate of the credit taken).

The arrival of gamification in the automotive market

The automotive market is no exception to the new trend of introducing gamification mechanics in loyalty programs. Some manufacturers have recently introduced fun reward systems to build brand engagement and gamify the customer experience.

The initiatives implemented in the market refer mainly to responsible driving with rewards based on the behavior of customers behind the wheel. Thus, Fiat and BMW reward drivers based on their sustainable behavior:

• Fiat has partnered with Kiri and offers, based on the number of kilometers traveled with an electric Fiat 500, a virtual currency that allows purchases on a platform that offers a wide variety of eco-responsible products.

• BMW has launched the points program BMW Points : Customers who drive a BMW plug-in hybrid vehicle have a points counter in which one point is credited for each kilometer traveled in electric mode. The points are doubled when the driver drives in electric mode in an area with low CO2 emissions, in order to help reduce noise pollution. These points are then converted into credits that can be used to recharge your vehicle at public terminals using the card. BMW loading.

The mise en place des nouvelles mécaniques a été rendue possible par les derniers progresses en matière de connectique embarquée: les points sont comptabilisés thanks to the mise en place de boitiers connected dans le véhicule, permettant de collecter les informations relatives au behavior du conducteur derrière the steering wheel.

Interestingly, beyond the LLD ecosystem, other players revolving around the automotive market are also adopting gamification approaches in their loyalty program, such as Circle K in Ireland.

conclusion

While some players in the long-term rental market are increasingly pulling levers to retain their customers, disparities exist and many companies only focus on the renewal phase with transactional approaches, or even take no loyalty action at all. in front of.

This is particularly true for bank subsidiaries in the LLD market, as opposed to manufacturers and their captives, which today seem better equipped to meet the challenge of building loyalty, but remain subject to rapid changes in behavior and expectations. of customers.

VERTONE, a consulting firm specializing in loyalty, can help you define and implement the loyalty mechanisms and the most relevant benefits for your development challenges.

An article written by Thomas Brezault and Julien Lévrier