Retail Point of View Making Loyalty Social 0113-1

7/18/2019 Retail Point of View Making Loyalty Social 0113-1

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Making Loyalty Social: The

Social Coupon

With every passing moment, consumers are hopping

across channels and spending more time on social

channels. Social channels provide retailers the platform

to indulge the customers in a gaming atmosphere.

The next step towards customer engagement should

be to reward and engage customer to interact with

various touch points and interplay in a periodic

manner. Businesses need to connect the dots of

current technologies with customers’ social media

platforms.

This paper explores the advances in Social Media

channels and trends which when intertwined with

their overall loyalty plan will profoundly impact the

ways to close the final link and increase ROI.

White Paper



About the Authors

Shivani Rawat

Shivani Rawat is a Retail Consultant at Tata Consultancy Services

(TCS), specializing in Loyalty and Multi Channel. She has worked

on assignments for retailers based out of North America, Europe

and emerging market geographies in grocery, apparel,

department store and specialty formats. She holds a Masters

degree in Business Administration and Bachelors of Engineeringin IT.

Phanindra Meduri

Phanindra Meduri is a Retail Consultant at Tata Consultancy

Services, specializing in Loyalty and Multi Channel. He has worked

on assignments for retailers based out of North America, Middle

East and Asia geographies in grocery, pharmacy, department

store and specialty formats. He holds a Masters degree in Business

Administration and Bachelors of Engineering in Electronics andCommunication.

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Table of Contents

The Eras of Loyalty 4

Closing the Gap 4

Making Loyalty Social: The Loyalty Module 5

The Social Coupon 5

The Value of Social Coupons 6

More than Another Channel 7



Winning the New Game of Retail means mastering emerging technologies and creating new customer

relationship models to take advantage of them. This stretches beyond transactions, marketing and

branding: beyond those areas where retailers are already digitally sophisticated. Its impact is felt across

assortment optimization, loyalty, discounting, inventory management, pricing across the entire retail

operation. To succeed, retailers must redesign, re-engineer, and re-innovate the way they do business.

TCS divides the evolution of loyalty and rewards programs into three broad eras. The evolutionary driver

has always been the same: finding and connecting with existing and emerging customer touchpoints.

The Era of Anonymity included nearly a century of rewards programs—from Green Stamps to box tops.

The retailer had no knowledge of who received the rewards. Every customer received the same ones,

regardless of their buying behavior, preferences or frequency.

The Era of Individualization began with frequent flyer programs. Loyalty was rewarded individually.

Everything was personal, from tracking to targeting to tiers. It became a highly efficient way to

communicate with customers across channels and to directly reward the customer. Rewards varied based

on purchase and frequency.

The Era of Shared Loyalty is upon us, just 30 years after the first frequent flyer program. Social platforms

turn loyalty into something that can be shared across each customer’s own social communities to

develop more new customers for the retailer.

The maturity of social platforms has created gaps between the full capabilities of those social

technologies and the limited way loyalty programs use them. In many ways, loyalty on a social platform

looks no different than loyalty over the telephone or on a web site.

This Retail Point of View focuses on loyalty: specifically, on using social platforms as a new way to reward

customers, and empower them to create new loyal customers for the brand. For TCS, sharing loyalty is a

New Rule in the New Game of Retail.

No Sustained Retailer-Customer Interaction

Retailers don’t deploy social programs that create continual, sustainable interactions, connecting brands

to loyal customers’ social networks. Traditional loyalty programs, even when they’re launched from a

social platform, are event-driven: usually retailer initiated with limited-time coupons, bundled

promotions and other purchasing incentives. Less often, the member initiates it: to manage an account or

redeem a reward. Either way, it’s a private world—an exclusive loyalty club of one, unable to become anengaging, active part of the member’s social universe.

The Eras of Loyalty

Closing the Gap

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Channels Work In Isolation

Retailers view the social world as another place to replicate their existing loyalty program. Doing so, they

miss out on the real promise of social loyalty. Airline loyalty on Facebook, to give just one example,

mirrors the web site functionality. That means it loses the much greater value and opportunity that comes

from helping customers engage their social community with the brand.

Social Media Is Just Another Channel

Retailers still view social media as “just” another broadcast channel. For TCS, that’s like viewing an iPhone

as just another device to make a phone call. The social platform is not an alternative to a web store or anemail. It’s not just another place to push promotions or post catalogs. It’s where customers come to

interact. To limit its functionality to posting videos, enabling “Like” buttons and presenting catalogs is to

drain its power to become a critical cross-channel sales driver.

Loyalty delivered across a social platform empowers and rewards customers not just for responding to a

reward or a promotion, but for sharing it across their social universe. Consider what a social loyalty

module on a retailer’s fan page can accomplish:Reward customer purchases (for instance, with a social coupon like the one described below). Allow

brand fans to not only redeem that coupon, but to upload and share it with friends.

Let retailers engage the customers in a gaming atmosphere and invoke location based, contextual and

group-based behavior.

Award customers points for coupons downloaded by their Facebook friends.

Motivate those friends to visit the brand’s store, redeem the shared coupon, and get their own social

coupons to be further shared.

Using Facebook as the model, let’s look at how the social coupon works. When loyalty program members

go to the retailer’s fan page, they log in to their loyalty module. The first time members log in, the loyalty

module asks permission to access their public Facebook account information, and to include it in their

loyalty account information.

After that, when members make purchases—no matter where the purchases are made—a social coupon

is generated, and is displayed as part of the member’s loyalty module, available to be redeemed.

It’s available for something else now as well: it’s available for sharing. When the social coupon isgenerated, members are given the option of posting it on their friends’ walls. Friends can then redeem

their version of that coupon.

Making Loyalty Social: The Loyalty Module

The Social Coupon

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How retailers administer and regulate social coupons is up to them. They can create incentive-to-redeem

by limiting the number of friends who can use the coupon on the wall: the first “n” number of friends can

redeem the coupon. They might time-constrain it as well. The customer whose friends receive the coupon

will be rewarded themselves for every coupon downloaded by their friends. They can allow sharing to

continue indefinitely, or—more likely—prohibit friends from further sharing the coupon.

Ofcourse, Membership Still Has Its Privileges:

Only a program member can share a social coupon.

Members earn points every time a social coupon is used by a friend.

Members can transfer points to other members (for instance, if they see something on a friend’s wish list).

Members can convert points to Facebook credits.

Purchasing doesn’t have to be the only way to generate a social coupon. The retailer can create tasks and

activities that, when completed, reward members with additional points, coupons or both.

Now the member is not rewarded just for purchases, nor or even for bringing in new customers; now

they’re rewarded simply for interacting with the brand.

The value of the social coupon is broad and extensive.

Increased Incremental Sales: The social coupon reaches many times the number of Facebook fans or

loyalty program members, driving high incremental sales.

Loyalty Reach: Once members’ friends download the social coupon, retailers have an opportunity to

enroll them as new loyalty program members.

Loyalty Spread Through Customers: Shared loyalty empowers customers to drive campaigns by

pushing the content across their social networks.

Gaming In Retail: Retailers can create game-like activities, designing tasks and functionalities that

customers complete to earn additional points.

Points Exchange: Members can transfer points to their friends whenever they come across a wish list on

friends’ walls.

Points Conversion: Retailers can target social gamers, by letting them convert loyalty points into

Facebook credits.

Private Label Marketing: Retailers can promote private labels by offering social cupons coupons (in

selected categories) and designing campaigns around them.

The Value of Social Coupons

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More than Another Channel

The social platform is no more “another channel” than web sites proved to be “another brochure.” It

possesses unique capabilities, unique functionalities and—far and away most importantly—a unique

dynamic among its users. Here the New Rule is a simple one: Share

Loyalty. Using techniques like the social coupon we’ve described here, retailers can expand the reach of

their brand, increase the engagement of their Fans, and drive new revenue.

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other applicable laws, and could result in criminal or civil penalties. Copyright © 2013 Tata Consultancy Services Limited T C S D e s i g n S e r v i c e s

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Contact

To find out more about how the socia l coupon is part of the New Game

of Retail, contact us at [email protected]

About Tata Consultancy Services (TCS)

www.tcs.com

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Retail Point of View Making Loyalty Social 0113-1