This week, Salesforce unveiled its new stand-alone Loyalty Management solution, promising a unified platform able to manage programs in both B2B and B2C environments. While intentionally designed to manage loyalty schemes end-to-end within the platform, as with all things Salesforce, the story comes to life when the loyalty solution is integrated into the entirety of the Salesforce arsenal.
On the surface, the product looks to make loyalty programs easier to manage and operate and more profitable. It enables brands to execute campaigns and initiatives on a single pane of glass and empowers those touch points to be more personalized and relevant to the customer. The goal, as Salesforce states in their announcement, is to “evolve loyalty programs to stay current with customer expectations and help drive business value by creating loyal, lifelong customers.”
This is an incredibly ambitious goal…and one that for too long has felt out of reach for many brands AND consumers.
Since the time of gamified stamps and sticker booklets to capture the attention and competitive nature of consumers, loyalty programs have been both intensely lucrative and mind-bogglingly complex to administer. In 2009, the CMO Council fielded a survey of 600 marketing executives and 700 consumer loyalty program members on the topic of loyalty programs. This was a time when $2 billion was being spent annually on operating loyalty programs and the average American household was enrolled in 14.1 loyalty programs but only active in 6.2. The obvious question was: is the organization’s (and the consumer’s) investment of budget, time and resources was worth it?
The overwhelming majority of marketers said that these programs were critical to driving more loyal and profitable engagements…which wasn’t a surprise. What was astounding was that for the most part, there was little if any strategy around what to do beyond the confines of the earn and burn mindset of a points-based scheme. Few were leveraging the data coming from these programs to craft new initiatives, products or services. Even fewer had the ability to connect the dots between actions and transactions in their loyalty program with engagements tracked and recorded in other systems let alone departments.
What happened in loyalty STAYED in loyalty!
Consumers were happy with the value of participation but had a distinct definition of what value was to them. That differed from how marketers defined value. Consumers valued savings, they valued exclusivity, but most of all, they valued the freedom to engage as people and not as ‘accounts’ or ‘transactions’…instead, they were esteemed, known and recognized as individuals.
The assumption SHOULD be that 11 years later EVERYTHING had CHANGED. However, in a 2019 report, Bond and Visa reported that consumers belong to an average of 14.8 loyalty membership programs but are active in 6.7…and, according to McKinsey, US companies are spending upwards of $40 billion annual on their loyalty programs. So…there is that.
Why has loyalty stagnated?
When I consider the conditions and context of that survey – the height of the global recession when consumers were on the hunt for savings and uncertain about financial futures, headlines across the industry shouting about the “new normal of commerce” and the “acceleration of digital transformation”—I can’t help but feel we are in familiar territory.
What both marketers and consumers admitted in 2009 was that loyalty programs are great when they are great, but they can also feel impossible to navigate and extract real value. Rather than leveraging loyalty programs to extract a higher quality signal from customers with a vested interest in advancing a deeper relationship, brands saw loyalty program lists as an open invitation to spam. Loyalty was something given by the customer in exchange for a perk…a reward from a transaction. Yet the very word loyalty is defined as a feeling of attachment. Somehow, through the course of navigating the operations of a loyalty program, all feeling and attachment has been stripped out in the interest of optimizing the monopoly money ledger of earn and burn points balance.
Here we are again in 2021, looking to apply new tools to solve old problems while seemingly ignoring the pesky reality that loyalty is a feeling – an attachment – and not an exchange or automated transaction.
So why did this announcement catch my eye? Sure, the solution is clean, chuck full of “easy button” features that make standing up and managing a program quickly a real possibility, and well thought through from a business strategy. Salesforce has leaned in hard to its stable of integration partners with Loyalty Services and Loyalty Strategy. These folks are well versed in the complexity of the loyalty market. What really caught my eye was the extension of loyalty from a scheme into a strategy that could be applied for more than redemptions. The foundation of the solution is grounded in the lifecycle of the customer, the robustness of the partner ecosystem partaking in the program and an emphasis on relationships that build from loyalty to advocacy.
At the core of the Salesforce announcement is an invitation for any organization to first rethink what loyalty means for their business. That in turn lets them develop strategies to enable and empower the entire organization to embrace loyal customers in a new, far more durable relationship. Activating membership communities of loyalists and influencers has also been thought thru with strategies and tactics to reward customers for connection and conversation within a network. Honestly…the simplicity of the cross-industry partner management functionality alone makes me lean in for more.
Salesforce has also gone the extra mile to elevate the importance of loyalty in B2B settings, capitalizing on a key trend I have seen charging hard into this new year. As the B2B marketer is driven to humanize and contextualize relationships for the individual beyond the account, replicating experiences more often associated with splashy, “sexy” B2C experiences, reimagining loyalty schemes that reward advocates with service, training and peer-to-peer networks is a timely discussion. The B2B business case for loyalty management is perhaps the greatest opportunity for differentiation, especially for existing Salesforce customers already bought in to the Salesforce Customer 360 vision.
With this new introduction, expect to see more buzz and more products focused on loyalty emerge from Salesforce competitors. We’ll see a wave of “We Too” product introductions in a diverse yet largely stagnant loyalty marketplace. Bottom line is that loyalty programs aren’t for the faint of heart. They can threaten great experience in the name of gamification and quickly put profitability on the line. But, customers are keenly aware that the new currency of business includes their influence and advocacy and that they, in this digitally accelerated world, are free to set their own exchange rate for their loyalty. It is time for organizations to rethink loyalty at both the tool and the tactic level.