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).

How Personal Value Decommoditizes Insurance Technology

James Eardley

In May, I had the great fortune to attend Digital Insurance Agenda (DIA) in Amsterdam. I got my fill of the latest in insurance technology innovation, which included insurance aggregators, chatbots, damage-claim fingerprint technologies, and online onboarding. While all of this was fascinating, I started to think about insurance technology from a consumer standpoint. Would any of this really change anything about the way I go about buying insurance?

Despite the great things I saw in Amsterdam, I realized the honest answer was, “Probably not.” It’s not that I won’t ever use that technology; I will, but it’s not going to change how I go about buying insurance. That’s because I still use an insurance broker, as I firmly believe insurance and relationships should go hand-in-hand.

Recently I was at a meeting with a consulting company, and I told someone that. He looked at me as if I were an unknown survivor of an extinct species. He had a good laugh and said, “Then you are overpaying.” Maybe he’s right, but the personal relationship I have with my broker is worth it to me, and insurance technology could learn a thing or two from my preference.

What insurance technology must learn from brokers

I completely trust my broker of over 20 years. His expertise goes beyond existing policies, it’s the knowledge he has about me outside of insurance that makes the difference. He knows everything about me, including my family, my interests – he even knows my dog. This deep relationship allows him to present personalized ideas about the insurance I need and at what levels to protect my assets, help me achieve my goals, and reduce risk. When I need something, it’s simple and fast to get it done. I don’t have time to search for the best deal out there or become an insurance expert myself. Call me strange if you like, but of all the things I want to do in my free time, researching insurance is not top of the list.

Incumbent insurers need to be as much focused on value as they are on insurance technology. The inventions I saw at DIA were interesting, some of them brilliant, but insurance isn’t something I use day-to-day. To be honest, most of the time I never think about it. And that’s the point. I have insurance so I don’t have to think about the risk.

Within reason, the better the advice and value I receive, the less likely I’m going to be concerned about whether I could switch providers and buy insurance for some slightly lesser amount. That longstanding, personalized relationship and lack of worry are worth more to me than saving a few dollars.

How new insurance technology can fit in

Of course, everyone doesn’t have a broker that they have known for 20 years. But that’s where technology can help. Using data from both inside and outside of the insurer, it’s now possible to understand customers with a level of detail previously unimagined. That customer understanding needs to be at the forefront of new technologies, otherwise they will quickly become commoditized – and likely faster than anyone thinks.

The digital era and technology have revolutionized the business, and all things seem possible in modern insurance. But it’s still about knowing your customer, simplicity, and personal value; just what my broker gives me. Let’s hope that insurers keep these things in mind as guiding lights in their digital transformations. After all, insurance technology is a commodity, but advice and value are not.

If you’d like to learn more about how insurance innovation can improve with the help of personal relationships, I invite you to attend the SAP Financial Services Forum 2017 on 4-5 July in London. The theme for this year’s Forum is “Winning in the Digital Moment” and it will be a great opportunity to learn from financial leaders from around the world. Register for the SAP Financial Services Forum here.


Customer Service: Are You Ready For The Socially Connected Customer?

Lisa James

There’s no question that today’s customers are more connected, demanding, and informed. The common expectation is for consistent service to be available 24/7 across channels and devices, and preferably without the hassle of listening to bad hold music on an endless phone call. Self-service, once the lonely outpost of the knowledge base, now encompasses the likes of Twitter, YouTube, community forums, and other social channels. Offering a combination of unassisted and agent-assisted customer service through social channels is the next hurdle for companies evolving to meet this demand.

Consumers often use social media to gather pre- and post-purchase information about products, including applications, bugs, and best practices. To deliver quality information via social channels, companies should utilize the following four approaches.

4 effective approaches to provide game-changing social customer service

1. Provide lower friction customer service

While telephone and email still hold sway, creating a social environment that empowers customers to access self-service resources (such as knowledge bases) is paramount. Within social channels like Facebook and Twitter, consumers want to send direct messages using their accounts, rather than interface with the official customer service links on the company’s main website. Enable these channels and grow your customer service presence. But don’t just end with enabling them. These channels must be monitored. What might be worse than not having these channels available for customer service is having them available and then ignoring your customers who are using them!

2. Offer faster response times

Socially connected customers are increasingly mobile. Today’s customers are constantly on their phones, checking their social networks to see what’s trending, watch videos, find product specs, and get their questions answered, all in real-time. An effective presence on social channels allows companies to respond faster and more effectively to requests. It’s important to not just answer questions and inquiries through social channels, but also to actively predict customer needs and push out new content through these channels to help answer their questions before they become problems.

3. Take advantage of community intelligence

Social channels are not just limited to Instagram, Facebook, and Twitter. Community forums are a key social channel where customers engage and gain community intelligence in real time. Given the free-flowing nature of communities, actively monitoring this channel is crucial. Bad information can go viral, and it takes an active social presence to drive consumers to the right resources. Taking advantage of community intelligence offered via social helps tap into peer-to-peer knowledge, increases customer loyalty, and helps identify patterns and problems with products. Where poor customer service in community forums can create detractors on your brand, great customer service will create advocates!

4. Predict rather than react to customer inquiries

Social channels, like knowledge bases, can be powered by machine learning that gathers data over time and filters it back through social channels. This provides just another avenue for manufacturer-to-consumer education and service. Monitoring social channels and identifying language patterns, request frequency, and other data intelligence can help predict the most common customer issues and resolve them before they rise to an equipment stoppage. It also saves time and effort and takes some of the pressure off your service agents, while simultaneously creating happy customers with met service needs.

Providing customer service to the socially connected customer is now easier than ever with SAP Hybris solutions for service. Ready to engage your customers throughout their entire journey? Download the free report here.


Teaching Machines Right from Wrong

Dan Wellers


By 2018, smart machines will supervise over 3 million workers worldwide.
21% of consumers in an FTC study had confirmed errors on their credit reports.
2014: the first annual Fairness, Accountability, and Transparency in Machine Learning conference.
A private university encouraged 20-25 students to drop out based on AI predictions of
poor grades.

Real-world examples of misused AI algorithms abound. These are just a few:

  • Women who weren’t pregnant — or weren’t ready to reveal it — received special offers of baby products and “congratulatory” messages.
  • People with minority ethnic names received a disproportionate number of ads implying they had criminal records.
  • Guests at a party learned a ride-hailing company kept track of customers who stayed out all night and went home in the wee hours.

Ethical-Edge Cases

Credit scoring algorithms designed to evaluate lending risk are now commonly used to gauge reliability and trustworthiness, determining whether someone should get a job or apartment.

Insurance underwriting algorithms determine the extent, price, and type of coverage someone can get, with little room for disagreement.

Healthcare algorithms could be used to penalize the currently healthy for their probability of future illness.

Algorithms often use zip codes as proxy for (illegal) racial profiling in major decisions, such as employment and law enforcement.

Self-driving cars will have to learn how to react in an accident situation when every possible outcome is bad.

What Should We Do About It?

All machine learning contains assumptions and biases of the humans who create it — unconscious or otherwise. To ensure fairness, business leaders must insist that AI be built on a strong ethical foundation.

We can:

  • Monitor algorithms for neutrality and positive outcomes.
  • Support academic research into making AI-driven decisions more fair, accountable, and transparent.
  • Create human-driven overrides, grievance procedures, and anti-bias laws.
  • Include ethics education in all employee training and development.

Above all, we must consider this a human issue, not a technological one. AI is only as unbiased a tool as we make it. It’s our responsibility to keep it on the ethical straight and narrow.

Download the executive brief Teaching Machines Right from Wrong.

Read the full article AI and Ethics: We Will Live What Machines Learn


Dan Wellers

About Dan Wellers

Dan Wellers is the Global Lead of Digital Futures at SAP, which explores how organizations can anticipate the future impact of exponential technologies. Dan has extensive experience in technology marketing and business strategy, plus management, consulting, and sales.


Why Millennials Quit: Understanding A New Workforce

Shelly Kramer

Millennials are like mobile devices: they’re everywhere. You can’t visit a coffee shop without encountering both in large numbers. But after all, who doesn’t like a little caffeine with their connectivity? The point is that you should be paying attention to millennials now more than ever because they have surpassed Boomers and Gen-Xers as the largest generation.

Unfortunately for the workforce, they’re also the generation most likely to quit. Let’s examine a new report that sheds some light on exactly why that is—and what you can do to keep millennial employees working for you longer.

New workforce, new values

Deloitte found that two out of three millennials are expected to leave their current jobs by 2020. The survey also found that a staggering one in four would probably move on in the next year alone.

If you’re a business owner, consider putting four of your millennial employees in a room. Take a look around—one of them will be gone next year. Besides their skills and contributions, you’ve also lost time and resources spent by onboarding and training those employees—a very costly process. According to a new report from XYZ University, turnover costs U.S. companies a whopping $30.5 billion annually.

Let’s take a step back and look at this new workforce with new priorities and values.

Everything about millennials is different, from how to market to them as consumers to how you treat them as employees. The catalyst for this shift is the difference in what they value most. Millennials grew up with technology at their fingertips and are the most highly educated generation to date. Many have delayed marriage and/or parenthood in favor of pursuing their careers, which aren’t always about having a great paycheck (although that helps). Instead, it may be more that the core values of your business (like sustainability, for example) or its mission are the reasons that millennials stick around at the same job or look for opportunities elsewhere. Consider this: How invested are they in their work? Are they bored? What does their work/life balance look like? Do they have advancement opportunities?

Ping-pong tables and bringing your dog to work might be trendy, but they aren’t the solution to retaining a millennial workforce. So why exactly are they quitting? Let’s take a look at the data.

Millennials’ common reasons for quitting

In order to gain more insight into the problem of millennial turnover, XYZ University surveyed more than 500 respondents between the ages of 21 and 34 years old. There was a good mix of men and women, college grads versus high school grads, and entry-level employees versus managers. We’re all dying to know: Why did they quit? Here are the most popular reasons, some in their own words:

  • Millennials are risk-takers. XYZ University attributes this affection for risk taking with the fact that millennials essentially came of age during the recession. Surveyed millennials reported this experience made them wary of spending decades working at one company only to be potentially laid off.
  • They are focused on education. More than one-third of millennials hold college degrees. Those seeking advanced degrees can find themselves struggling to finish school while holding down a job, necessitating odd hours or more than one part-time gig. As a whole, this generation is entering the job market later, with higher degrees and higher debt.
  • They don’t want just any job—they want one that fits. In an age where both startups and seasoned companies are enjoying success, there is no shortage of job opportunities. As such, they’re often looking for one that suits their identity and their goals, not just the one that comes up first in an online search. Interestingly, job fit is often prioritized over job pay for millennials. Don’t forget, if they have to start their own company, they will—the average age for millennial entrepreneurs is 27.
  • They want skills that make them competitive. Many millennials enjoy the challenge that accompanies competition, so wearing many hats at a position is actually a good thing. One millennial journalist who used to work at Forbes reported that millennials want to learn by “being in the trenches, and doing it alongside the people who do it best.”
  • They want to do something that matters. Millennials have grown up with change, both good and bad, so they’re unafraid of making changes in their own lives to pursue careers that align with their desire to make a difference.
  • They prefer flexibility. Technology today means it’s possible to work from essentially anywhere that has an Internet connection, so many millennials expect at least some level of flexibility when it comes to their employer. Working remotely all of the time isn’t feasible for every situation, of course, but millennials expect companies to be flexible enough to allow them to occasionally dictate their own schedules. If they have no say in their workday, that’s a red flag.
  • They’ve got skills—and they want to use them. In the words of a 24-year-old designer, millennials “don’t need to print copies all day.” Many have paid (or are in the midst of paying) for their own education, and they’re ready and willing to put it to work. Most would prefer you leave the smaller tasks to the interns.
  • They got a better offer. Thirty-five percent of respondents to XYZ’s survey said they quit a previous job because they received a better opportunity. That makes sense, especially as recruiting is made simpler by technology. (Hello, LinkedIn.)
  • They seek mentors. Millennials are used to being supervised, as many were raised by what have been dubbed as “helicopter parents.” Receiving support from those in charge is the norm, not the anomaly, for this generation, and they expect that in the workplace, too.

Note that it’s not just XYZ University making this final point about the importance of mentoring. Consider Figures 1 and 2 from Deloitte, proving that millennials with worthwhile mentors report high satisfaction rates in other areas, such as personal development. As you can see, this can trickle down into employee satisfaction and ultimately result in higher retention numbers.

Millennials and Mentors
Figure 1. Source: Deloitte

Figure 2. Source: Deloitte

Failure to . . .

No, not communicate—I would say “engage.” On second thought, communication plays a role in that, too. (Who would have thought “Cool Hand Luke” would be applicable to this conversation?)

Data from a recent Gallup poll reiterates that millennials are “job-hoppers,” also pointing out that most of them—71 percent, to be exact—are either not engaged in or are actively disengaged from the workplace. That’s a striking number, but businesses aren’t without hope. That same Gallup poll found that millennials who reported they are engaged at work were 26 percent less likely than their disengaged counterparts to consider switching jobs, even with a raise of up to 20 percent. That’s huge. Furthermore, if the market improves in the next year, those engaged millennial employees are 64 percent less likely to job-hop than those who report feeling actively disengaged.

What’s next?

I’ve covered a lot in this discussion, but here’s what I hope you will take away: Millennials comprise a majority of the workforce, but they’re changing how you should look at hiring, recruiting, and retention as a whole. What matters to millennials matters to your other generations of employees, too. Mentoring, compensation, flexibility, and engagement have always been important, but thanks to the vocal millennial generation, we’re just now learning exactly how much.

What has been your experience with millennials and turnover? Are you a millennial who has recently left a job or are currently looking for a new position? If so, what are you missing from your current employer, and what are you looking for in a prospective one? Alternatively, if you’re reading this from a company perspective, how do you think your organization stacks up in the hearts and minds of your millennial employees? Do you have plans to do anything differently? I’d love to hear your thoughts.

For more insight on millennials and the workforce, see Multigenerational Workforce? Collaboration Tech Is The Key To Success.