Make Your Loyalty Program Stand Apart

Aline Ostrowski pulled out her purse.

"Here, I’ll show you," she said to knowing laughs around the room. Ostrowski pulled
out one – then two – stacks of jumbled plastic cards. Fanning them out clumsily, others
admitted to similar stacks.

Ostrowski was showing off her bundle of memberships to various loyalty programs. A
consultant with LoyaltyOne, Ostrowski has spent years giving advice to companies such
as Walgreens, MGM Mirage and Visa on structuring and differentiating their loyalty
programs for customers.

At this year’s 3rd Annual Customer Experience Summit in Miami Beach, FL, Ostrowski
led a workshop titled "A Holistic Three Tier Initiative to Ensure a Continuous Return on
Loyalty Program Investment."

Owstrowski, who speaks brightly with a slight Minnesota accent, discussed the
importance of the "3 R’s" in loyalty programs – rewards, recognition and relevance. The
last "R," however, provides the most opportunity to differentiate a loyalty program.

"Loyalty programs have always had the 3 R’s and marketing has always been the
relevance piece," she said in an interview. "It’s probably practiced extensively within the
marketing group. But think about it beyond marketing. When you take some [the concept
of relevance] to the enterprise loyalty view, what does it mean to be relevant?"

Loyalty is not solely established through conventional means – the more you buy
the more discounts you receive – but through connecting with consumers’ interests.
Sustainability, fitness and the environment were three "new frontiers" Ostrowski singled
out as areas to differentiate your program.

Cub Foods, a mega grocery chain, partnered with recycling banks and promoted these
efforts. While not a direct loyalty program, the company has seen increased sales as a
result. Virgin HealthMiles, which provides employee health programs, promotes a loyalty
program that will discount your health care premium by $20 each month if you provide
evidence of physical activity – a gym membership receipt, for example.

"What type of experience do people want to have versus what experience are we going to
give them," she said. "It’s a very different way of looking at it."

Determining the experience people want warrants engaging your "so underutilized"
frontline staff in addition to talking to the actual customers. Ostrowski favors focus
groups, customer surveys (email is ideal) and any number of social media monitoring
tools.

But even a well-intentioned program stalls before starting without proper internal
employee engagement. Some companies allow their staff to enroll in loyalty programs
several months before they officially roll out. By the time the program hits the public, the

staff has already personally benefited and will freely share these benefits with customers.

"A great example is Best Buy," Ostrowski said. "They’ve done an amazing job to
motivate their staff to join the program and have also educated the staff on ‘here’s the
value of having people sign up for the program. They’ve done a great job in showing the
value to the whole company."

As for the cards Ostrowski pulled out? Her personal favorite loyalty programs?

"I’m a gal," she said with a laugh, listing Sephora ("constantly surprising and delighting
their guests, you don’t know what you’re going to get"), Panera Bread ("you swipe your
card and unexpectedly get a chance for a free cookie or drink or whatever they offer
you") and Coke ("they do an exceptional job of talking to me [through email] at the right
time … I don’t need an airplane ticket, I just want something small").