Operators typically begin by striking deals with national partners for offers in return for targeted access to their opt-in customer base. As a program evolves, it then usually extends to local partners. One area, however, where most of these programs have room to evolve is customer targeting by value and preferences. Today, the emphasis is on contextual offers (which favor the partner) as opposed to customer identity (which would be better for retention and customer satisfaction).

A key component of next-generation loyalty programs is leveraging ‘context’—when and where—to define the best offer for the customer. In addition, programs need to be much more ‘intelligent’ by integrating customer data to deliver personalized customer experiences. For operators that want to survive and thrive in the future, opening their ‘end’ customers to ‘upstream’ customers (brands) could become a key strategic play. Which brand would not want access to millions of high-value customers, instantly? The challenge, of course, is to manage this access in such a way that the ‘end’ customers see this as a benefit, not a nuisance.

Done right, a portfolio of partners will allow operators to differentiate themselves from the competition while potentially creating a new revenue stream. Done wrongly, consumers will jump ship and let everyone know how they feel across social media channels.

Badges: Making Next Generation More Social and Personal

When we evaluate next-generation loyalty, many of the current mechanics are still very relevant and should form the core of the offering. However, the new opportunity is to leverage contextual marketing, real-time customer targeting, gamification and evolving social channels. We need to take a page from the world of apps and online gaming book to encourage and recognize customers.

One such next-generation play is the badges concept, which is designed to recognize customer achievements across multiple dimensions such as spend, tenure and brand advocacy. ‘Badges’ bring together gamification, social recognition and contextual marketing by rewarding customer actions over the web, apps and other channels, such as SMS.

Orange Belgium stands out as the leader in this space, having delivered a badge experience integrated with cinema rewards based on customer tenure. It’s the company's way of saying ‘Thank you for your loyalty to the brand.’ The longer you stay, the more badges you earn which, in return, extends the cinema offering benefits you can receive.