Hanging loose at Gallows Corner

From in-store sat navs to reward apps, technical innovations are transforming marketing and loyalty programmes, as James Silver reports

At a branch of Tesco Extra at the unpromisingly named Gallows Corner, in Romford, Essex, an unusual experiment has taken place. Customers owning smartphones installed with Android OS 2.2 or later were offered the chance to download a prototype app, which syncs their online shopping list, stored in their phones, with a map displaying the optimum route through the aisles to find their groceries.

Not even Tesco’s R&D team knows whether customers will take to “in-store sat nav”, as it has been termed by the supermarket giant, whose trial findings are currently being assessed.

The experiment is simply the latest in a wave of technological innovations from Tesco Groceries for on-the-go shopping to the Clubcard App, which allows users to store their reward cards on their smartphones.

“This trial is a good example of a retailer joining up their different sales channels to create a more seamless experience,” says Dan Hagen, head of planning at media buying agency Carat. “Whoever cracks this first, delivering an experience consumers find motivating and rewarding, should steal the march on driving loyalty.”

The journey, from plastic loyalty card to the veritable Pandora’s box of downloadable reward apps available today, has become one of dizzying speed due to the way technology is converging in one ever-present device.

The relationship with a customer is very much built on what you know about them

It is forecast that a billion people will own a smartphone by 2016 – 257 million of them in the US alone – and once social shopping, peer-to-peer recommendations and real-time purchase research are added to the mix, it’s easy to see why mobile has become what Forrester research analyst Ted Schadler calls “the new face of engagement”.

While the flood of reward and loyalty apps are popular with customers, they also offer businesses richer data and insights into how their clients behave than has ever been available before, allowing them both to enhance their customer relationship management (CRM) and further hone rewards programmes.

But with such a deluge of data from millions of subscribers and multiple sources on offer, sophisticated software has had to be built to enable marketers to make sense of it all. One such solution is Customer Intelligence, part of a product developed by the international software as a service (SaaS) firm EmailVision, whose UK clients range from Mercedes-Benz to Ann Summers.

“With Customer Intelligence, our clients can access very detailed granular data, both on their customers, the transactions those customers do with them and their communication history,” says Henry Smith, EmailVision’s sales director.

“The marketers themselves can then very easily start to profile and segment customers, based upon things like age-band and gender in order to design messaging or content to those audiences – for example, using geographic data to communicate with customers within a certain range of a store. The relationship with a customer is very much built on what you know about them. The more you know, the more you can tailor the communications you send to them and the more likely they are to be loyal.”

Rapidly evolving technology is helping retain customers in other ways too. Problem-solving helpdesk software or comprehensive technical customer support services are seen as sure-fire ways to improve customer satisfaction and boost loyalty.

This logic is reflected in the German flag-carrier Lufthansa’s decision to migrate its Miles & More loyalty programme to a new technological platform. Loyalty Management Suite, a product developed by Munich-based Loyalty Partner Solutions (LPS), will help future-proof the airline’s loyalty scheme through flexibility by, say, allowing new programme partners to be more easily accommodated within it. Lufthansa says the new platform will enable it to respond more quickly to future technological changes.

Case Study

Sing along with Lucky Voice

Founded in 2003 by, among others, Martha Lane-Fox, Lucky Voice is now the UK’s top karaoke brand with venues across the country and a growing online streaming business.

Over the past year the company has seen a 30 per cent increase in bar bookings and a doubling of its customer database to 200,000, largely driven by the introduction of a cutting-edge software as a service (SaaS) system, called Campaign Commander, for highly targeted marketing over email, mobile and social.
“Email is our primary channel for building customer loyalty and we reward repeat customers by sending them offers of 25 per cent discounts,” says Dan Pilkington, Lucky Voice’s digital marketing manager.

Sending out a blizzard of generic emails to registered customers risks putting many off rather than encouraging loyalty, which is why Lucky Voice uses the software as a data-warehouse so they can communicate with customers intelligently.

“We use it to store a lot of information about our customers and their behaviour, such as which of our bars they go to, how they often use the online service and which offers they’ve used,” says Mr Pilkington. “Then we can segment them to send out timely and relevant offers. If they’ve been to an event – for example, we do a weekly quiz in our bar in Islington – we can tell them about special offers coming up. We also aim to contact customers on a Monday or Tuesday because that’s when we find they are making plans for the coming weekend.”

The company also use the software to encourage bar users to try out Lucky Voice’s online karaoke-streaming service and vice-versa.


Latest loyalty apps

Nectar: After a successful launch on the Apple App Store, the Nectar App is now also available for Android devices. The app gives shoppers access to exclusive, personalised offers and enables them to collect Nectar points quicker than before. Collectors opt in through the app to offers from Nectar partners, including Sainsbury’s, Homebase and BP, as well as online retailers, such as Debenhams.com, Play.com and Game.co.uk.

Foursquare Mobile Loyalty: With 15 million users worldwide and (as of January 2012) 1.5 billion “check-ins”, location-based social network Foursquare offers a number of services to business known as “specials”, including loyalty specials. “Reward your best customers,” the platform urges. “The classic special is ‘Free coffee on your fifth visit’.” Participating companies get a free “Merchant’s Dashboard”, which generates a range of real-time data.

Belly: A fast-growing digital reboot of the traditional loyalty scheme, built around gamification and check-ins, Belly was created by a Chicago-based startup and is so far only available in the US. Customers swipe a Belly card or QR code stored on their iPhone or Android against an in-store iPad at point of sale to accumulate points. Unusual rewards on offer have so far included all-you-can-eat cupcakes at a bakery and a fishmonger allowing Belly customers to kiss a prize lobster. In return, merchants get access to a plethora of data, including customers’ email addresses.

LevelUp: A payments app for iPhone, Android and BlackBerry which links a user’s credit or debit card to a personal QR code stored within the app. At participating stores or restaurants, the merchant scans the QR code on the customer’s phone. First-time users receive from $5 to $20 credit, after which deals are unlocked and further credit accrued. To date LevelUp is only available in nine US cities, including New York, Philadelphia, Boston, Chicago and San Francisco.