Loyalty Programs And Building Loyalty

Mukesh Gupta

One of the biggest challenges that brands face today is to find and cultivate loyal customers. Most brands have some sort of program to reward loyalty from their customers. But most of the loyalty programs that I am a part of totally miss the point of loyalty itself.

In general, the expectations of enterprise customers and consumers have increased significantly. They expect brands to not only deliver great products and services, but also acknowledge them as individuals, and engage, excite, and/or woo them to become loyal customers. Add to this the fact that we are today living in a world in which it’s easier than ever for consumers to switch products and services that don’t match or exceed their expectations.

In this scenario, it is critical that brands have a good loyalty program that works for both the brand and its customers.

How to make your loyalty program more effective

1. Loyalty programs should be for loyal customers

Currently I am part of at least 25 different loyalty programs, each with a different retailer or a business. Does that mean that I am a loyal customer to these businesses. Definitely not. Just like millions of others who enroll in a loyalty program, I was also auto-enrolled by the billing clerk while getting my purchase billed. I understand that businesses need to collect information about consumers and track their purchases and affinity towards their business to make many decisions.

However, getting everyone to participate in the loyalty program indicates to me that the business does not value the loyalty, but just the business. By doing this, the business also sets an expectation that you will get discounts by being part of the program, and that there may be levels in the program that entitle you, as a loyal customer, to even more benefits. What this tells me, as a consumer, is that if I want better discounts from the business, I should enroll in the program—nothing more and nothing less.

In my opinion, instead of enrolling every customer into a loyalty program, businesses should be very selective about who gets invited, and about what benefits are offered to keep these elite consumers coming back. As Eddie Yoon explains, loyalty programs should be defined for superconsumers.

This class of consumers can not only help your brand grow, but it can also play a significant part in your product growth strategy, boosting new innovations and even helping your brand become more relevant. For more information about superconsumers and how businesses can find , engage, and learn from them, read Eddie Yoon’s insightful book “SuperConsumers: A Simple, Speedy, And Sustainable Path To Superior Growth.”

2. Engage people with exceptional experiences

One of marketing’s greatest challenges is to engage people en masse. But engaging experiences have a significant impact, eliciting emotions that make your brand memorable and that make people eager to share.

The most effective emotion to elicit is positive surprise. If you can positively surprise your customers, most other emotions generally take a back seat. For example, remember the KLM surprise in which the company spontaneously gave relevant presents to customers based on their social profiles?

3. Create rituals or traditions beyond just an annual Christmas card

Humans have always been creatures of habit, and we have evolved using rituals or traditions. Think about what kinds of habits you would like to instill – in yourself, in how you engage your customers, and in your customers themselves. Habits create traditions; traditions turn into values.

Be mindful not to appear selfish in this area as it will most certainly backfire. Keep your customers’ lives and ambitions central when you are creating rituals, traditions, or habits. Cultures are built one habit, one ritual, one tradition, and one story at a time.

4. Give your customers a voice, and connect them

Nurturing a great relationship between your brand and your customers is as important as creating opportunities for your customers to discover other customers with similar interests. This is an important pillar that most brands forget when they are building the loyalty programs.

Some common mistakes to avoid

  1. Too often, loyalty programs are designed based on the technology used to manage the program, and not the other way around. It is critical to understand this and avoid this mistake when designing a new loyalty program.
  1. Do not hide behind customer sat numbers (yes, I’m talking about the NPS and other customer satisfaction measurement programs). Averages don’t tell you the full truth and can even be outright dangerous. To create meaningful experiences and traditions, go out and meet your customers. It’s all about people; in the end, they make up the numbers.
  1. Loyalty programs are for loyal customers, not the other way around. You can’t build loyalty among your customers by enrolling them in a loyalty program. Loyalty needs to be earned.

If you are creating a new loyalty program and would like to discuss your ideas, I would be happy to share my thoughts and ideas with you. You can reach out to me on Twitter: @rmukeshgupta.


Mukesh Gupta

About Mukesh Gupta

Mukesh Gupta previously held the role of Executive Liaison for the SAP User group in India. He worked as the bridge between the User group and SAP (Development, Consulting, Sales and product management).

The Future Of Retail Is Customer Experience

Betsy Atkins

Part 1 of the “Digital Outlook on Retail” series

Though the job of a corporate board member has never been easy, show special sympathy for anyone serving as a retailing director over the past few years. The traditional board concerns of retail and measures of success – profit margins, inventory turnover, sales per square foot, traffic, conversions – are under attack by e-commerce. Doing all the traditional things well can leave you in the same position as K-Mart, Sears, or The Limited.

The pressures traditional bricks-and-mortar retail chains face are obvious and increasing. Many of these have been self-inflicted. The U.S. has far more per capita retail square footage than any other country (six times as much as the U.K., for example). 8,642 retail stores will close in 2017 in North America alone.

Meanwhile, the stats for online retail are exploding in ways that both excite and trouble those of us in the sector. U.S. e-commerce sales hit $294 billion in 2016, and are expected to reach $414 billion next year. That was an average of $1700 per person in 2015. A poll of U.S. shoppers found 60% prefer to avoid crowded malls and stores (which, of course, makes them less crowded), and 71% believe they’ll find the best deals shopping online. Forty percent of men and 33% of women 18 to 34 say that ideally they’d like to buy everything online.

retail commerce sales worldwide

Those of us who watch the numbers, monitor the trends, and set strategy for retail businesses know they offer an incomplete, even misleading picture of where retail in America is headed. First, digital trends are leading us toward a hybrid retailing model built upon both the online and in-store channels, but takes them in wholly new directions. First-generation online retail was shaped by desktop computing models that are rapidly being outclassed by the rise of mobile e-commerce.

Currently, 66% of the time U.S. customers spend on retail interaction is via mobile. This is higher still in Asia and Europe, pathfinders for mobile retail innovation. Mobile is not a supplement to a retailer’s online presence now – it is the primary mode, and obsessing over how well your customers can browse, shop, buy, and pay through their smartphones is crucial.

Even that approach is too limited today. Smart competitors (some you may not even realize are competitors) are shaping omnichannel digital and hybrid retail models that will surprise and disrupt you tomorrow. Amazon and Google invent new ways to source, market, sell, and deliver goods on an almost-daily basis. StitchFix offers a new apparel retail model using algorithms and AI to deliver wardrobe items customized to your body and personal style. Warby Parker brings a similar online shakeup to the staid world of optometry and eyeglasses. Ikea supplements its physical locations with a viewer option that lets you remotely browse its stores via virtual reality.

Retail spaces will become places to go to learn about the products and be inspired. Retailers will need to “sell a story” within their store as consumers are demanding experiences as much as purchases.

Watch the interview for more insights from Betsy Atkins, CEO of Baja Corp.


Betsy Atkins

About Betsy Atkins

Betsy Atkins, CEO and Founder, Baja Corporation

Betsy Atkins is a three-time CEO, serial entrepreneur, and founder of Baja Corporation. She has co-founded enterprise software companies in multiple industries including energy, healthcare, and networking. She is an expert at scaling companies through hypergrowth and leading them to successful IPO and acquisitions. Betsy is a corporate governance expert with an eye for making boards a competitive asset. Her corporate board experience is vast and covers many industries, including technology, financial services, healthcare, retail, automotive, manufacturing, and logistics. As a corporate director, she brings an operational perspective that focuses on taking friction out of the consumer experience.

Financial Services: The New Frontier Of Customer And Digital Experiences

Mathew Bailey

Australia’s financial service providers have been on the front lines of the digital revolution, building high-quality services and processes that have delivered unprecedented convenience to customers.

But the rise of fintech companies and the broadening ambitions of the world’s digital titans is putting increased pressure on traditional banks, insurers, and other players. Customers no longer expect their bank to provide the best digital experience (DX) amongst its peers, but amongst all the organisations they interact with.

According to SAP’s 2017 Australian Digital Experience Report (DXR), financial services companies are setting a high standard for DX compared to other sectors. The challenge now is to continue lifting those standards when consumer expectations are also rising, and increased competition is the new normal.

Bridging the gap

Since the launch of online banking more than a decade ago banks have been leaders in providing great DX. But as more and more services have been translated into the digital world, challenges have arisen in taking complicated processes and delivering them online, especially when they are based on aging technology.

Despite these drawbacks, Australia’s financial services companies have proven adept at providing strong DX. This year’s SAP DXR showed a 16-point uplift in the banking sector’s score, to leave an overall positive rating of 7%. The insurance sector reported a 6-point improvement, but still came in with a negative overall rating of -5%.

Getting closer to customers

While much of the positive response can be attribute to functional attributes such as ‘safe and secure’ (62% for banks and 50% for insurance) and ‘allow me to interact/buy at any time’ (43% for banks and 25% for insurance), banks in particular made significant gains around more human attributes.

For example, the result for ‘listens to me and is interactive’ rose to 8% this year, well up from -7% last year, while the result for ‘make me love the company’ rose from -22% to -4% and ‘make me feel important’ rose from -20% to -7%. While there is clearly still work to be done, these results show that banks are making the right investments today.

The insurance sector failed to match these gains, although the result for ‘listens to me and is interactive’ moved from -2% to 5%, while ‘make me love the company’ climbed 4 points from -22% to -18%. This may be due to the lesser frequency of engagement between an insurer and its customers were outside Claims and Quote/Renewal process, insurers largely remain isolated for their customer.

Bank customers are also responding positively to investments being made in personalisation. For the attribute ‘create a customised journey’ banks rated at 1%, well up from the -18% reported in 2016, while the response of 0% for ‘associate with my own identity’ was also well up on the -15% reported last year. Again, whilst positive in its change, it still highlights a largely unsatisfied customer.

A more urgent need for change

While banking and financial services have made strong steps towards personalisation and using data to improve DX, they nonetheless face a significant challenge to their long-term prosperity. Interest in the fintech component of the Australian startup community continues to grow, with a steadily expanding cohort of companies proving capable of raising capital and more importantly, winning customers.

At the same time, financial services companies face a threat that the world’s digital giants will expand their ambitions into financial services. Many of these companies already provide specific financial services, such as payments, and are expanding into new areas including offering credit. These companies have broad reach and strong customer relationships, posing a potential existential threat to traditional players.

It is critical for existing players to continue investing in excellent digital experience at the front end, while also implementing new technologies to streamline service delivery.

The emergence of open banking is an example of where banks should be exploring from a platform up perspective to ensure they can stay at the forefront of delivering a connected customer experience. Similar for Insurance, being the connected insurer in a world of increased collaboration with external ecosystems, where it matters the most around the Customer, to deliver a fully connected experience.

The strong positive response to personalisation specifically is a clear signal that this is an area ripe for additional investment. Advanced and predictive analytics can enable more granular market segmentation right down to segments of one and enable the creation of personalised offers on-the-fly that more exactly match the needs of customers; machine learning can ensure that responses are captured and future efforts are fine-tuned. Blockchain distributed ledgers are proving to be highly useful for streamlining complex and manually-intensive projects such as clearances, leading to faster service delivery for customers and hence pushing up overall satisfaction.


Customers are demanding in their expectation and rarely rate the same experience or journey the same way when faced with it again. Agility in delivering this experience which morphs to the near real-time expectation of the customer will put pressure on traditional, heavily process centred organisations and continue the pressure that open banking will bring. Insurers and their providers face significant intermediation of the customer and their data unless they can find a way to foster a relationship more than once a year or during a claim. With such a small percentage of customers ever claiming, the value of insurance beyond covering a specific event needs to find a way to be involved in a customer’s life on their terms and at the times they need it most.

Banking and financial services companies have deep experience when it comes to providing excellent DX, but must be constantly elevating these capabilities. The onslaught of new competition is only just beginning, and in finite markets, players that fail to keep pace with customer expectations have significant ground to lose.

To find out more about more about how the banking and financial sector is performing, and strategies to improve DX, download the SAP Australia DX Report or watch the recent webcast with FST Media, “Be Connected, Be Disruptive, Be Revolutionary.”


Mathew Bailey

About Mathew Bailey

Mathew Bailey works for SAP Australia/New Zealand with a focus on the Financial Services & Insurance (FSI) vertical. He has worked in the FSI sector for almost 15 years, mainly in Retail Banking and Personal Insurance.

He has also worked in various roles across Consulting, Sales, Presales and Practice and Program Management in different parts of the world, including four years in Hong Kong, one year in Singapore, as well as short stints in the Philippines, Malaysia, Belgium and the USA.

Human Skills for the Digital Future

Dan Wellers and Kai Goerlich

Technology Evolves.
So Must We.

Technology replacing human effort is as old as the first stone axe, and so is the disruption it creates.
Thanks to deep learning and other advances in AI, machine learning is catching up to the human mind faster than expected.
How do we maintain our value in a world in which AI can perform many high-value tasks?

Uniquely Human Abilities

AI is excellent at automating routine knowledge work and generating new insights from existing data — but humans know what they don’t know.

We’re driven to explore, try new and risky things, and make a difference.
We deduce the existence of information we don’t yet know about.
We imagine radical new business models, products, and opportunities.
We have creativity, imagination, humor, ethics, persistence, and critical thinking.

There’s Nothing Soft About “Soft Skills”

To stay ahead of AI in an increasingly automated world, we need to start cultivating our most human abilities on a societal level. There’s nothing soft about these skills, and we can’t afford to leave them to chance.

We must revamp how and what we teach to nurture the critical skills of passion, curiosity, imagination, creativity, critical thinking, and persistence. In the era of AI, no one will be able to thrive without these abilities, and most people will need help acquiring and improving them.

Anything artificial intelligence does has to fit into a human-centered value system that takes our unique abilities into account. While we help AI get more powerful, we need to get better at being human.

Download the executive brief Human Skills for the Digital Future.

Read the full article The Human Factor in an AI Future.


Dan Wellers

About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation.

Share your thoughts with Kai on Twitter @KaiGoe.heif Futu


How Manufacturers Can Kick-Start The Internet Of Things In 2018

Tanja Rueckert

Part 1 of the “Manufacturing Value from IoT” series

IoT is one of the most dynamic and exciting markets I am involved with at SAP. The possibilities are endless, and that is perhaps where the challenges start. I’ll be sharing a series of blogs based on research into knowledge and use of IoT in manufacturing.

Most manufacturing leaders think that the IoT is the next big thing, alongside analytics, machine learning, and artificial intelligence. They see these technologies dramatically impacting their businesses and business in general over the next five years. Researchers see big things ahead as well; they forecast that IoT products and investments will total hundreds of billions – or even trillions – of dollars in coming decades.

They’re all wrong.

The IoT is THE Big Thing right now – if you know where to look.

Nearly a third (31%) of production processes and equipment and non-production processes and equipment (30%) already incorporate smart device/embedded intelligence. Similar percentages of manufacturers have a company strategy implemented or in place to apply IoT technologies to their processes (34%) or to embed IoT technologies into products (32%).

opportunities to leverage IoTSource:Catch Up with IoT Leaders,” SAP, 2017.

The best process opportunities to leverage the IoT include document management (e.g. real-time updates of process information); shipping and warehousing (e.g. tracking incoming and outgoing goods); and assembly and packaging (e.g. production monitoring). More could be done, but figuring out where and how to implement the IoT is an obstacle for many leaders. Some 44 percent of companies have trouble identifying IoT opportunities and benefits for either internal processes or IoT-enabled products.

Why so much difficulty in figuring out where to use the IoT in processes?

  • No two industries use the IoT in the same way. An energy company might leverage asset-management data to reduce costs; an e-commerce manufacturer might focus on metrics for customer fulfillment; a fabricator’s use of IoT technologies may be driven by a need to meet exacting product variances.
  • Even in the same industry, individual firms will apply and profit from the IoT in unique ways. In some plants and processes, management is intent on getting the most out of fully depreciated equipment. Unfortunately, older equipment usually lacks state-of-the-art controls and sensors. The IoT may be in place somewhere within those facilities, but it’s unlikely to touch legacy processes until new machinery arrive. 

Where could your company leverage the IoT today? Think strategically, operationally, and financially to prioritize opportunities:

  • Can senior leadership and plant management use real-time process data to improve daily decision-making and operations planning? Do they have the skills and tools (e.g., business analytics) to leverage IoT data?
  • Which troublesome processes in the plant or front office erode profits? With real-time data pushed out by the IoT, which could be improved?
  • Of the processes that could be improved, which include equipment that can – in the near-term – accommodate embedded intelligence, and then communicate with plant and enterprise networks?

Answer those questions, and you’ve got an instant list of how and where to profit from the IoT – today.

Stay tuned for more information on how IoT is developing and to learn what it takes to be a manufacturing IoT innovator. In the meantime, download the report “Catch Up with IoT Leaders.”


Tanja Rueckert

About Tanja Rueckert

Tanja Rueckert is President of the Internet of Things and Digital Supply Chain Business Unit at SAP.