Pointless FlyBuys
As FlyBuys bites the dust, loyalty programmes are evolving to build brand affinities beyond just transactional rewards.
Loyalty NZ has announced that Flybuys is closing at the end of 2024, saying the market has changed significantly since it first launched, with businesses now having greater access to technology to create their own highly tailored loyalty programmes. This is understandable as loyalty programmes have evolved significantly in recent years, with many businesses opting to create their own tailored versions that better align with their specific products, services, and customer base.
The rise of data analytics, customer relationship management (CRM) systems, and digital marketing tools has made it easier for companies to gather and analyse customer data, enabling them to design customised loyalty initiatives. These proprietary programmes often provide a more personalised experience for customers and allow businesses to maintain greater control over the rewards and incentives offered.
While Flybuys was a pioneer in the loyalty space, it operated as a coalition builder across multiple retailers and service providers. As businesses increasingly seek to differentiate themselves and foster direct relationships with their customers, the appeal of a generalised, third-party loyalty programme has diminished. The closure of Flybuys is probably based on a strategic decision by the participating companies to redirect their resources towards their own loyalty initiatives, which they perceive as more effective in driving customer engagement and retention.
With Flybuys shutting down, businesses can invest in creating their own customised loyalty initiative tailored to their specific products, services, and customer base. This allows them to maintain full control over the design, rewards, and customer data. However, it does require allocating resources for technology, analytics, and management, and for those that can’t afford this investment, there are still other multi-partner loyalty programmes available, such as Airpoints or AA Smartfuel. Businesses can explore joining these coalitions, which can provide ready access to an established customer base.
Rather than a traditional loyalty programme, businesses could invest in a robust CRM platform that allows them to capture customer data, preferences, and purchase history. This data can then be leveraged to provide personalised experiences, targeted promotions, and tailored rewards for their most valuable customers. Loyalty programmes are just one tool for customer engagement. Businesses could allocate their resources towards other initiatives like exceptional customer service, valuable content marketing, referrals, or building a strong brand community.
The key is to evaluate their specific business goals, target audience, and available resources to determine the most effective approach to fostering customer loyalty and retention in the post-Flybuys era. With access to more customer data and advanced analytics, loyalty programmes will become more seamlessly integrated with mobile apps, digital wallets, and online platforms. Customers will be able to easily track and redeem rewards, receive communications, and engage with brands through these digital channels.
While traditional points-based rewards will still have a place, there will be a greater focus on offering unique experiences as rewards. These could include exclusive events, access to special experiences, or personalised concierge services, catering to the growing desire for memorable experiences over material goods.
Loyalty programmes may incorporate emerging technologies such as artificial intelligence, augmented reality, and the Internet of Things (IoT) to create more engaging and seamless experiences. For example, AI could provide personalised recommendations, while AR could enhance the shopping or rewards redemption process.
While some brands may develop proprietary programmes, there will likely be a continued trend towards loyalty partnerships and coalitions that allow companies to leverage each other's customer bases and offer a wider range of rewards and benefits. Beyond transactional rewards, successful loyalty programmes will strive to foster emotional loyalty by aligning with customers' values.
Starbucks has been successful in creating an emotional connection with its customers through its loyalty programme. In addition to earning points for purchases, members can enjoy benefits like free birthday rewards, exclusive member events, and early access to new products. The Starbucks app also gamifies the experience, allowing customers to track their progress toward rewards.
Sephora offers more than just points and discounts. Members receive personalised product recommendations based on their purchase history and preferences. The programme also includes exclusive beauty classes, makeover sessions, and access to a private hotline for one-on-one consultations with beauty advisors.
While not a traditional loyalty programme, Amazon Prime fosters emotional loyalty through its comprehensive suite of benefits, including free shipping, streaming services, and exclusive deals. It creates a sense of exclusivity and delivers a seamless, convenient experience that keeps customers engaged with the Amazon ecosystem.
Marriott's loyalty programme aims to create emotional connections by offering unique local experiences and service. Members can redeem points for exclusive culinary experiences, cultural tours, and behind-the-scenes access at their destinations, creating memorable travel experiences.
These examples illustrate how companies are moving beyond just points and discounts to create emotional connections through personalised experiences, exclusivity, community building, and aligning with customers' values and lifestyles.
One of the most unusual and innovative loyalty programmes is Wyndham Rewards from Wyndham Hotels & Resorts. What makes this stand out is its unique ‘go free” model, which allows members to redeem points for a free night's stay with no blackout dates. This is in contrast to most hotel loyalty programmes that have limited availability for free night redemptions. Additionally, Wyndham Rewards has a very generous points-earning structure, with members earning ten points per dollar spent on qualified stays, or 1,000 points per stay, whichever is higher. This makes it easier for members to quickly accumulate points towards free nights.
Another unusual aspect is that Wyndham Rewards has no expiration policy for points, which is rare among loyalty programmes. Members' points never expire as long as they have account activity at least once every 18 months. The programme also allows members to earn and redeem points across Wyndham's diverse portfolio of over 9,000 hotels, vacation club resorts, and vacation rentals across twenty different brands, providing flexibility and choice.
Furthermore, Wyndham Rewards has partnered with a variety of companies, allowing members to earn and redeem points through unique avenues such as gas stations, grocery stores, and even by purchasing timeshares. With its generous earning structure, no blackout dates, no points expiration, and unique partnerships, Wyndham Rewards offers an innovative and unconventional approach to hotel loyalty programmes.
In the future we can expect social integration to play a greater role, allowing members to share their progress, rewards, and experiences on social media platforms, and blockchain-based rewards may use blockchain technology to create a more transparent and secure system for tracking and redeeming rewards. This could also enable the trading or transferring of rewards between members.
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