(This is the fourth Future Patrol, a monthly series of macrotrend posts by WONY Strategist Emily Segal. You’ll see Wolff Olins’ established macrotrends called out with a hashtag.)


#Hyperloyalty 

I. What it is:

Loyal3, launching in May, is a new startup that enables consumers to buy shares of companies (really $10 fractions of shares) directly on Facebook, an idea CEO Barry Schneider is calling “the ultimate ‘like’ button.”

Loyalty programs have already become a focal point for incenting consumer behavior, creating personalized perks, and gathering consumer data. 

Loyal3’s move to put real stakes behind consumer engagement shows that loyalty is beginning to generate new revenue models. The #Hyperloyalty trend is about precisely this kind of consumer-focused shift from marketing to value creation.

Future Patrol predicts that loyalty programs will become an expectation for every brand –even in industries that have conventionally gone without them – with elements such as crowdfunding, branded currencies and extra perks for good social media behavior as key features.

 

II. Some examples:

    

FROM REWARDS TO MICROECONOMY

The line between jokes and innovation has become increasingly blurry. Virgin Holidays’ April Fools’ Day hoax, a branded currency with Richard Branson’s face on it, recalls a trend we discussed in Future Patrol’s #Funny Money post: loyalty and rewards programs are becoming alternative currencies unto themselves, with points that can be redeemed for nearly as many things as cash can.

 “Most large companies – from Starbucks to British Airways to Sheraton to American Express – are evolving their reward and point loyalty systems into digital micro-economies, complete with redemption and exchange between systems.” (Cayman Financial Review) 


EXTREME CONSUMERS

Frequent flyers are the day traders of this new economy.

“Mileage runners are the high-tech nomadic wanderers of the air. Predominantly male, generally obsessed with flying and miles, and typically employed in white-collar careers that involve significant business travel, they scour the web for cheap flights, phoning in sick or using vacation days to fly the longest itineraries they can string together.”

 

GAMING THE SYSTEM

Loyalty programs – and games – are both about incenting customer behavior, and both use feedback loops and points to that end. But a loyalty system need not actually be a game to feel like one.

“Assembling a mileage run means deciphering complex fare rules and pulling together information from up to a dozen websites. It’s an achievement that tickles the same satisfying problem-solving centers of the brain as a Sudoku puzzle, and always ends in the deep-rooted human thrills of travel and flight.” (Wired)  (“Frequent Flyer” documentary on Vimeo)


THE EMOTIONAL LANDSCAPE

Freedom is the best perk. 

“Designing programs with an overarching theme of “freedom” can instill incredible power into our initiatives.” …. “Not “freebies.” But “freedom.” The ability to do things, to make decisions, to enhance one’s life, in ways that wouldn’t otherwise be possible. The word is telling. Many elements contribute to freedom, and, yes, the freebie is one such element. Others include privilege, convenience, assistance, guidance, choice and ease.” (“Freedom: Perhaps the ultimate aspirational reward” Colloquy Blog)

 

COERCIVE CURRENCIES

However, “freedom” is not the first word that comes to mind when integrating social media into loyalty schemes. Giving consumers deals or discounts because they have desirable social media influence is a marketing trend, but also can create a coercive situation in which consumers must forfeit deals if they want to preserve their privacy

Gilt Groupe provides extra discounts for users with high Klout scores

+ Amex / Twitter: The new Twitter integration lets American Express cardholder receive special offers by tweeting with a special hashtag. Initial partners include Zappos, the Cheesecake Factory, McDonald’s, Best Buy, Virgin America, and Whole Foods. In order to redeem a deal, you send a tweet with a hashtag and the offer is loaded on to the account. The credit appears automatically when the card is swiped. (Venturebeat)

+ Exchange systems like Pay with a Tweet, or Chime.in that exchange goods for social media “love” and personal data from consumers

+ Reputation currencies like Whuffie Bank (where you get discounts and rewards based on your online social reputation)

 

III. What this means for brand: 

+ Extreme consumers and mileage runners have invented their own rituals around current loyalty infrastructures. There’s an opportunity for brands to leverage the subcultures that spring up around the way they architect their companies. What seems like extreme niche behavior today will likely be mainstream tomorrow.

+ Don’t become so seamless and ubiquitous that you slip beneath the convenience threshold. Failure and friction are important elements in building brand loyalty – and put the “social” in social media. Help your customers “play, fail, replay, achieve, succeed and progress” (LS:N). 

+ Brands that make customers feel free are powerful, but the feeling of getting away with something may be even more powerful.

(For more on rethinking value download Value-Creative: Change the Game)

Untitled watercolor by Ken Price

  1. wolffolinsblog posted this