Launching a loyalty program is expensive and it’s complex. In the US alone, companies spend a staggering $2 billion on loyalty programs every year. But does this translate into increased customer engagement? Research suggests the answer is “probably not”. The average household in the US has over 21 loyalty program memberships. But, the household only actively uses 44% of these. More than half of consumers in a 2013 survey admitted they had abandoned at least one loyalty program in the past year. Our own analysis of customer sentiment on social media revealed pronounced dissatisfaction. Almost 90% of social media sentiment on loyalty programs was negative.
We assessed loyalty programs on a number of parameters. These included their central objective, their use of digital channels, and their ability to provide a seamless experience across channels (more detail on the approach is at the end of this paper). We found, in short, that companies have a lot of catching up to do. 97% of loyalty programs rely on transactional rewards, i.e. a customer makes a purchase and takes their points in exchange for gifts, merchandise or cash. The issue is that 77% of those transaction-based programs actually fail in the first two years. According to our research, only 25% of loyalty programs reward customers for some form of engagement. Where loyalty programs are also lacking is advanced personalization: only 11% of loyalty programs offer personalized rewards based on a customer’s purchase history or location data.
This research highlights why organizations need to think beyond points and how they can implement well-designed, engagement-based loyalty programs.
When Digital Disruption Strikes: How Can Incumbents Respond?Capgemini
Digital innovation is shaking the core of every industry and incumbents are struggling to respond. The emergence of startups such as Uber – which disrupt entire sectors with their agile, innovative business models – is worrying traditional incumbents. Venture funding to startups is at historic highs. In just one startup hotspot, Silicon Valley, venture capital investment in the first three quarters of 2014 was around $17 billion, a figure that is only surpassed by the peak of the dotcom era in 2000. In recent research by GE, two-thirds of respondents agreed that businesses have to encourage creative behaviors and must disrupt their internal processes in order to do so. What does a successful strategy for responding to disruption look like? How fast have companies responded to digital disruptions? To understand more about how traditional incumbents respond to digital disruption, we conducted research spanning 100+ companies.
In an 'always on' world where channel-surfing B2B customers demand real-time responses - no matter where they are - what is the optimal role of social media marketing? Roxane Divol, a partner and leader of McKinsey's Marketing & Sales Practice, addressed this question at the ITSMA Marketing Leadership Forum and demystified the emerging role of marketing as a driver of social technologies. She also discussed the tactics and strategies B2B marketers should use to access the touchpoints and datastreams that reinforce the social consumer decision journey. This presentation provides insights into how, when, and where social media influences and uniquely engages customers, as well as current best practices for developing, launching, and demonstrating the financial impact of social media campaigns. More: http://mckinseyonmarketingandsales.com/topics/b-to-b
Loyalty Deciphered — How Emotions Drive Genuine EngagementCapgemini
Current loyalty approaches are broken. Brands spend billions on loyalty programs but fail to increase customer engagement. Our previous research showed that 90% of consumers have a negative perception of loyalty programs. In addition, over half (54%) of loyalty memberships have fallen inactive and over a quarter of consumers (28%) abandon loyalty programs without redeeming any points.
Many of today’s loyalty programs attempt to buy consumer loyalty through monetary rewards. The consumer might receive discounts or vouchers and, in return, organizations expect them to spend more or give up their data. Many organizations run these sorts of programs and achieve what looks like loyalty, at least on the surface.
But what does it really mean for a consumer to be loyal to a brand?
To uncover the true drivers of loyalty, we undertook a worldwide, cross-sector research program. We broadened our perspective—exploring beyond the mechanical and rational drivers associated with conventional loyalty programs. We explored loyalty from an emotional perspective to identify the drivers that brands can harness to build meaningful loyalty with consumers. We surveyed over 9,000 consumers and 500 executives, and we spoke to leading academics in the field. The Research Methodology at the end of this report provides further details.
We found that emotions play a far greater role in creating true loyalty than current approaches recognize. In this report we:
Explore how emotions are the main driver of loyalty.
Understand who emotionally engaged consumers are and what motivates them.
Assess the size of the prize for organizations with emotionally engaged consumers.
Recommend strategies for how organizations can make better emotional connections with consumers.
Consumer Insights: Finding and Guarding the Treasure TroveCapgemini
Consumer Product (CP) companies operate in an industry where the fundamental rules of the game are changing. The growth of e-commerce, the ability to bypass retailers, the rise of private labels, and the advent of niche CP startups are just some of the trends that are reshaping the sector.
But one significant change that stands out in particular is the direct connection that CP companies today have to the needs and aspirations – the ‘pulse’ – of consumers. This is, to a large extent, thanks to the rise of digital channels.
The benefits of a predictive online reputation management process, including a robust response mechanism, pay off in averting or smoothing any brand reputation crises. This whitepaper explains how to set up such a reputation management process.
When Digital Disruption Strikes: How Can Incumbents Respond?Capgemini
Digital innovation is shaking the core of every industry and incumbents are struggling to respond. The emergence of startups such as Uber – which disrupt entire sectors with their agile, innovative business models – is worrying traditional incumbents. Venture funding to startups is at historic highs. In just one startup hotspot, Silicon Valley, venture capital investment in the first three quarters of 2014 was around $17 billion, a figure that is only surpassed by the peak of the dotcom era in 2000. In recent research by GE, two-thirds of respondents agreed that businesses have to encourage creative behaviors and must disrupt their internal processes in order to do so. What does a successful strategy for responding to disruption look like? How fast have companies responded to digital disruptions? To understand more about how traditional incumbents respond to digital disruption, we conducted research spanning 100+ companies.
In an 'always on' world where channel-surfing B2B customers demand real-time responses - no matter where they are - what is the optimal role of social media marketing? Roxane Divol, a partner and leader of McKinsey's Marketing & Sales Practice, addressed this question at the ITSMA Marketing Leadership Forum and demystified the emerging role of marketing as a driver of social technologies. She also discussed the tactics and strategies B2B marketers should use to access the touchpoints and datastreams that reinforce the social consumer decision journey. This presentation provides insights into how, when, and where social media influences and uniquely engages customers, as well as current best practices for developing, launching, and demonstrating the financial impact of social media campaigns. More: http://mckinseyonmarketingandsales.com/topics/b-to-b
Loyalty Deciphered — How Emotions Drive Genuine EngagementCapgemini
Current loyalty approaches are broken. Brands spend billions on loyalty programs but fail to increase customer engagement. Our previous research showed that 90% of consumers have a negative perception of loyalty programs. In addition, over half (54%) of loyalty memberships have fallen inactive and over a quarter of consumers (28%) abandon loyalty programs without redeeming any points.
Many of today’s loyalty programs attempt to buy consumer loyalty through monetary rewards. The consumer might receive discounts or vouchers and, in return, organizations expect them to spend more or give up their data. Many organizations run these sorts of programs and achieve what looks like loyalty, at least on the surface.
But what does it really mean for a consumer to be loyal to a brand?
To uncover the true drivers of loyalty, we undertook a worldwide, cross-sector research program. We broadened our perspective—exploring beyond the mechanical and rational drivers associated with conventional loyalty programs. We explored loyalty from an emotional perspective to identify the drivers that brands can harness to build meaningful loyalty with consumers. We surveyed over 9,000 consumers and 500 executives, and we spoke to leading academics in the field. The Research Methodology at the end of this report provides further details.
We found that emotions play a far greater role in creating true loyalty than current approaches recognize. In this report we:
Explore how emotions are the main driver of loyalty.
Understand who emotionally engaged consumers are and what motivates them.
Assess the size of the prize for organizations with emotionally engaged consumers.
Recommend strategies for how organizations can make better emotional connections with consumers.
Consumer Insights: Finding and Guarding the Treasure TroveCapgemini
Consumer Product (CP) companies operate in an industry where the fundamental rules of the game are changing. The growth of e-commerce, the ability to bypass retailers, the rise of private labels, and the advent of niche CP startups are just some of the trends that are reshaping the sector.
But one significant change that stands out in particular is the direct connection that CP companies today have to the needs and aspirations – the ‘pulse’ – of consumers. This is, to a large extent, thanks to the rise of digital channels.
The benefits of a predictive online reputation management process, including a robust response mechanism, pay off in averting or smoothing any brand reputation crises. This whitepaper explains how to set up such a reputation management process.
It is the age of the digital customer. And digital customer experience is something that most companies have on top of their agenda. It is not hard to see why. In a survey, 70% of respondents said that good service had a considerable influence on their loyalty and 69% would recommend the company to others. The reverse is also true. Poor customer experience drives customers away. Research shows that nearly 89% of customers walk away from a company after a single poor customer experience. And this can have a significant impact. Businesses are estimated to lose as much as 20% of revenue from poor customer experiences. And this is precisely the reason we chose to focus the sixth edition of our Digital Transformation Review on Customer Experience. How can organizations create compelling digital customer experiences that work? We posed this very question to a diverse panel from around the world. Our panel for this edition includes industry leaders, academics, startup founders, platform vendors and technology gurus. They come from all over the world, including the home of innovation in the digital age — Silicon Valley
Power to the People: Customer Care and Social MediaCognizant
The growth of social media, including Facebook and Twitter, offers many opportunities for businesses to connect with customers. Nonetheless, most companies still view social media as an extension of their traditional sales and marketing efforts; few are using social media to strengthen customer care and offer customers consistent, seamless and satisfying experiences.
CMO vs CIO: Paths Forward to Collaboration on Collaboration - Ray Wang, Esteb...OpenKnowledge srl
CMO vs CIO: Paths Forward to Collaboration on Collaboration - Ray Wang (Constellation Research), Esteban Kolsky (ThinkJar), Keynote Speakers @ Social Business Forum 2013
The End of Stability: Rethinking Strategy for an Uncertain AgeCapgemini
Rita McGrath, a Professor at Columbia Business School, is one of the foremost experts on strategy and innovation. Her work focuses on strategy development in uncertain environments and her latest book is called The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business. Rita McGrath has been recognized among the Top 10 Most Influential Business Thinkers by Thinkers50 in 2015. Capgemini Consulting spoke to Rita McGrath to understand how organizations should go about strategy development in an era of accelerated change and disruption.
Social media is the modern Pandora’s box: it has had a meteoric rise as a tool to interact and engage with customers, but also a dark underside exposing companies to new types of risk. Almost two-thirds of companies surveyed say that social media is a significant or critical risk to their brand reputation, yet 60% of companies either never train their employees about their corporate social media policies or do so only upon hiring. This report outlines how to be more proactive about managing social media risk through following a detailed four-step process: Identify, Assess, Mitigate, and Evaluate.
Forrester Research outlines key areas for technology and business leaders to focus on in 2021.
It should point businesses and leaders in the right direction if it desires to stay relevant.
Developing and managing a multi-channel approach has been
a key issue in retail banking.
But what about Corporate & Investment Banks (CIBs)? Where do they stand in terms of multichannel for corporate clients?
Especially, what are the trends and opportunities in digital channels for them and what are the implications?
In our current social and political landscape, ‘Fake News’ has dominated the global conversation, but how do we recognize what is mis- and disinformation? And how can we contain it?
In this webinar, we take a closer look at this pressing issue, and how to use technology to mitigate the effects of misinformation and fight distrust.
My slides from SAScon 2013 on the topic of "Maximising your online reputation" with some tips around how to gain and use insights into social conversations to manage brand reputation online.
Digital Influence is one of the hottest trends in social media, yet is largely misunderstood. "The Rise of Digital Influence," the new report by Altimeter Group Principal Analyst Brian Solis, is a 'how-to' guide for businesses to spark desirable effects and outcomes through social media influence. The report helps companies understand how influence spreads, and includes case studies in which brands partnered with vendors to recruit connected consumers for digital influence campaigns. Brian evaluates the offerings of 14 Influence vendors, organizing them by Reach, Resonance, and Relevance: the Three Pillars that make up the foundation for Digital Influence as defined in the report. Also included are an Influence Framework and an Influence Action Plan to help brands identify connected consumers and to define and measure strategic digital influence initiatives.
Silicon Valley Bank presents a historical look and new research on marketplaces based on data collected from more than 140 private companies. The results describe how mobile technology is impacting the creation and sustainability of marketplaces—and separating the winners from the losers.
The presentation was delivered at Silicon Valley Bank’s Marketplace Mashup on October 14 in New York City. Nearly 100 marketplace founders, venture capital and private equity investors and industry veterans from around the world came together at the exclusive event. More information is available at http://www.svb.com/Blogs/Steve_Allan/Marketplace_Mashup_(Presentation_and_Video)/
What: An online survey with panel participants
Who: White-collar participants own a smart phone
When: Data collected from July 14 to July 24, 2017
Where: Results are shown for France only (n=1,012)
Trending: Slides that have the note below in the bottom right were tested against last waves data for significant
changes, the arrows denote a significant change. Slides that have this note but no arrows mean there were no
differences.
Statistical testing: Statistical differences are shown at the 95% confidence level.
Note: Data was weighted to match the proportion of technology industry workers from last wave.
Software is having an impact on everyone’s lives and we’re fascinated by its effect on user behavior. Building on our existing financial sector expertise, Beyond wanted to fully understand how people’s behavior is changing in one of the world’s oldest industries and what this change means for the future design of products and services in banking.
It is the age of the digital customer. And digital customer experience is something that most companies have on top of their agenda. It is not hard to see why. In a survey, 70% of respondents said that good service had a considerable influence on their loyalty and 69% would recommend the company to others. The reverse is also true. Poor customer experience drives customers away. Research shows that nearly 89% of customers walk away from a company after a single poor customer experience. And this can have a significant impact. Businesses are estimated to lose as much as 20% of revenue from poor customer experiences. And this is precisely the reason we chose to focus the sixth edition of our Digital Transformation Review on Customer Experience. How can organizations create compelling digital customer experiences that work? We posed this very question to a diverse panel from around the world. Our panel for this edition includes industry leaders, academics, startup founders, platform vendors and technology gurus. They come from all over the world, including the home of innovation in the digital age — Silicon Valley
Power to the People: Customer Care and Social MediaCognizant
The growth of social media, including Facebook and Twitter, offers many opportunities for businesses to connect with customers. Nonetheless, most companies still view social media as an extension of their traditional sales and marketing efforts; few are using social media to strengthen customer care and offer customers consistent, seamless and satisfying experiences.
CMO vs CIO: Paths Forward to Collaboration on Collaboration - Ray Wang, Esteb...OpenKnowledge srl
CMO vs CIO: Paths Forward to Collaboration on Collaboration - Ray Wang (Constellation Research), Esteban Kolsky (ThinkJar), Keynote Speakers @ Social Business Forum 2013
The End of Stability: Rethinking Strategy for an Uncertain AgeCapgemini
Rita McGrath, a Professor at Columbia Business School, is one of the foremost experts on strategy and innovation. Her work focuses on strategy development in uncertain environments and her latest book is called The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business. Rita McGrath has been recognized among the Top 10 Most Influential Business Thinkers by Thinkers50 in 2015. Capgemini Consulting spoke to Rita McGrath to understand how organizations should go about strategy development in an era of accelerated change and disruption.
Social media is the modern Pandora’s box: it has had a meteoric rise as a tool to interact and engage with customers, but also a dark underside exposing companies to new types of risk. Almost two-thirds of companies surveyed say that social media is a significant or critical risk to their brand reputation, yet 60% of companies either never train their employees about their corporate social media policies or do so only upon hiring. This report outlines how to be more proactive about managing social media risk through following a detailed four-step process: Identify, Assess, Mitigate, and Evaluate.
Forrester Research outlines key areas for technology and business leaders to focus on in 2021.
It should point businesses and leaders in the right direction if it desires to stay relevant.
Developing and managing a multi-channel approach has been
a key issue in retail banking.
But what about Corporate & Investment Banks (CIBs)? Where do they stand in terms of multichannel for corporate clients?
Especially, what are the trends and opportunities in digital channels for them and what are the implications?
In our current social and political landscape, ‘Fake News’ has dominated the global conversation, but how do we recognize what is mis- and disinformation? And how can we contain it?
In this webinar, we take a closer look at this pressing issue, and how to use technology to mitigate the effects of misinformation and fight distrust.
My slides from SAScon 2013 on the topic of "Maximising your online reputation" with some tips around how to gain and use insights into social conversations to manage brand reputation online.
Digital Influence is one of the hottest trends in social media, yet is largely misunderstood. "The Rise of Digital Influence," the new report by Altimeter Group Principal Analyst Brian Solis, is a 'how-to' guide for businesses to spark desirable effects and outcomes through social media influence. The report helps companies understand how influence spreads, and includes case studies in which brands partnered with vendors to recruit connected consumers for digital influence campaigns. Brian evaluates the offerings of 14 Influence vendors, organizing them by Reach, Resonance, and Relevance: the Three Pillars that make up the foundation for Digital Influence as defined in the report. Also included are an Influence Framework and an Influence Action Plan to help brands identify connected consumers and to define and measure strategic digital influence initiatives.
Silicon Valley Bank presents a historical look and new research on marketplaces based on data collected from more than 140 private companies. The results describe how mobile technology is impacting the creation and sustainability of marketplaces—and separating the winners from the losers.
The presentation was delivered at Silicon Valley Bank’s Marketplace Mashup on October 14 in New York City. Nearly 100 marketplace founders, venture capital and private equity investors and industry veterans from around the world came together at the exclusive event. More information is available at http://www.svb.com/Blogs/Steve_Allan/Marketplace_Mashup_(Presentation_and_Video)/
What: An online survey with panel participants
Who: White-collar participants own a smart phone
When: Data collected from July 14 to July 24, 2017
Where: Results are shown for France only (n=1,012)
Trending: Slides that have the note below in the bottom right were tested against last waves data for significant
changes, the arrows denote a significant change. Slides that have this note but no arrows mean there were no
differences.
Statistical testing: Statistical differences are shown at the 95% confidence level.
Note: Data was weighted to match the proportion of technology industry workers from last wave.
Software is having an impact on everyone’s lives and we’re fascinated by its effect on user behavior. Building on our existing financial sector expertise, Beyond wanted to fully understand how people’s behavior is changing in one of the world’s oldest industries and what this change means for the future design of products and services in banking.
SEPGLA 2007 Migración a Ambientes de Arquitectura Orientada a Servicios (SOA...Nelson Piedra
SEPGLA 2007:
Migración a Ambientes de Arquitectura Orientada a Servicios (SOA)
Grace A. Lewis
Software Engineering Institute, USA
Noviembre 26, 2007
Fuente: CD Memorias SEGLA 2007
2014 Customer Loyalty ASEAN Conference: Lassu (lassuloyalty.com)Jim D Griffin
Jim Griffin discusses three levels of maturity in customer loyalty marketing. He then presents the results of a cross-sectional household survey in the Philippines, concluding with two case studies that illustrate customer loyalty marketing at a cross-roads between mediocrity and excellence. Jim is the founder of Lassu (lassuloyalty.com). He has helped dozens of clients and programs across multiple verticals, including healthcare, travel, retail, telecommunications, banking and business-to-business.
"Real loyalty isn’t created at the close of the sale. It’s created when the brand & the customer become intimate through multiple interactions before, during & after the purchase." Read more in Aimia's report, 'Rewarding Interactions; Are You Ready for Customer Intimacy'
Loyalty is more than just a program it is becoming a vehicle for brand philosophy. The new breed of successful loyalty programs go beyond perks to build impactful emotional connections with customers. Unparalleled customer loyalty begins and ends with the quality of your relationships with customers.
Loyalty Programs are going mobile. This presentation lays out some of the reasons why we're seeing a shift in Loyalty to mobile, and the best way businesses can take advantage of it.
The environment in which today's
brands connect and build loyalty with
their customers and program Members are
markedly different than the environment that
existed even a few short years ago. In fact, it
is markedly different than it was even just a
year ago. The pace at which today’s marketing
landscape is changing is remarkable – there
is a chronic torrent of macro trends exerting
their influences on the market. Economic,
social, technological, and political factors
are affecting brand loyalty and programs,
Members’ interactions with programs, how
Members perceive programs, as well as
the role that programs play in the lives
of consumers.
The customers overall commitment to the brand or service, in part because of an emotional attachment to that relationship, and the consistency of the brand that ensures an elite level of trust between the brand and the consumer.
Social@Ogilvy and OgilvyOne thought-leadership on unlocking engagement opportunities across the customer journey.
This research aims to answer a simple question. Do visible Social programmes undertake the fundamental Customer Engagement activities that drive sales, loyalty and advocacy?
Brands with futuristic vision have hopped on the mantra of holistic loyalty to unlock long-term benefits. This blog covers the trends that became a mainstream strategy in the loyalty software market in 2022 and some promising trends for 2023.
7 ways a customer loyalty platform boost brand engagementgroupfio1
Customer loyalty programs play a huge role in retaining customers. In this highly competitive market, it can extend the brand's reach, Do you people want to know more, check out the below link.
https://www.groupfio.com/7ways-a-customer-loyalty-platform-boosts-brand-engagement/
Our company NaXum powers dozens of direct selling, mlm, party plan, and referral marketing companies with software, apps, and sales tracking systems to run their businesses.
We've seen 6 key trends that every referral marketing company should take notice of for 2022.
Data-driven analytical insights backed with personalized execution can substa...Sumit Acharya
Generating data-driven analytical insights backed with personalized execution using digitized channels could substantially enhance consumers experience for the brand, there-by result-in long-term loyalty win-backs and potential rewards
COVID-19 heightened chronic challenges within the global healthcare industry. It became a catalyst amid fierce competition and tight regulations for health providers and payers to focus on digital health, cybersecurity, patient data transparency, and a variety of customer-centric and operational enhancements. As a result, we found the 2022 trendline pointing to improvements in access and quality of care.
Healthcare challenges such as optimizing the cost of care while simultaneously enabling personalized interventions and consumer-friendly shoppable services are long-standing − but, historically, the industry has been slow to react.
Read our Top Trends 2022 report to examine the lingering ramifications of the pandemic, responses from medical and insurance organizations, and the worldwide impact of ever-changing regulatory standards and mandates.
A combination of factors − the pandemic, catastrophic weather events, evolving policyholder expectations, and insurers’ drive for operational efficiency and future relevance − are sparking P&C industry changes.
In a post-COVID, new-normal environment, the most strategic insurers are building resilient, crisis-proof enterprises poised to take advantage of emerging and future business opportunities. They are leveraging advanced data analytics and novel technologies to assure agility and achieve positive revenue and customer satisfaction outcomes. Competitive advantage will hinge on accelerated digitalization and faster go-to-market. Therefore, win-win partnerships and embedded services with InsurTechs and other ecosystem players are critical.
Read Capgemini’s Top P&C Insurance Trends 2022 for a glimpse at the tactical and strategic initiatives carriers are undertaking to boost customer-centricity, product agility, intelligent processes, and an open ecosystem to ensure profitable growth and future-readiness.
This analysis provides an overview of the top trends in the commercial banking sector as they shift to technology high gear to boost client efficiency and battle a volatile, uncertain, competitive, and evolving landscape.
First, it was retail banking. Now, advanced technology is shifting to – and disrupting − the commercial banking space. Many commercial banks, known for paperwork, red tape, and branch dependency, were unprepared to support clients during their post-COVID-19 ramp-up. But now, the digital pivot to new mindsets, partnerships, and processes is in overdrive.
As commercial banks grapple with competition from FinTechs, BigTechs, and alternative lenders, their inability
to fulfill SME demands and pandemic after-shocks necessitates transformative process changes and a move
to experiential, sustainable, and inclusive banking models. We expect banks to strive to meet the demands
of corporate clients and SMEs by digitally transforming critical workflows and improving client experience.
Additionally, incremental process improvements in the middle and back-office that leverage intelligent
automation will keep the competition at bay because engaged clients are loyal.
Adopting newer methods to mine data and moving to as-a-Service models will prepare commercial banks
to flexibly respond to newcomers and find ways to co-exist through effective collaboration. The time has come for commercial banks to put transformation on the fast track as lending losses in wallet and market share could spill over to other functions!
How incumbents react and respond to 2022 trends could determine their relevancy and resiliency in the years ahead.
The Covid-19 pandemic necessitated the payments industry undergo a facelift, sparked by novel approaches from new-age players, fostered by industry consolidation, and customers’ demand for end-to-end experience. Crossing the threshold, the industry is entering a new era – Payments 4.X, where payments are embedded and invisible, and an enabling function to provide frictionless customer experience. As customers make a permanent shift to next-gen payment methods, Digital IDs are critical for a seamless payment experience. The B2B payments segment is witnessing rapid digitization. BigTechs, PayTechs, and industry newcomers are ready to jump in with newfangled solutions to help underserved small to medium-sized businesses (SMBs).
As incumbents struggle with profits, new-age firms are forging ahead to take the lead in the Payments 4.X era by riding the success of non-card products and services. The new era demands collaboration, platformification, and firms can unleash full market potential only by embracing API-based business models and open ecosystems. Data prowess and enhanced payment processing capabilities are inevitable to thrive ahead. The clock is ticking for banks and traditional payments firms because the competitive advantage is not guaranteed forever. As industry players seek economies of scale, consolidations loom, and non-banks explore new territories to threaten incumbents’ market share. While all these 2022 trends are at play, central bank digital currency (CBDC) is emerging globally and might open a new chapter in the current payments landscape.
As we slowly move out of the pandemic, financial services firms have learned the criticality of virtual engagement to business resilience. Wealth management firms will need capabilities to cater to new-age clients and deliver new-age services. This report aims to understand and analyze the top trends in the Wealth Management industry this year and beyond.
A year ago, our Top Trends in Wealth Management report emphasized how the pandemic sparked disruption and digital transformation and changing investor attitudes around Environmental, Social, and Corporate Governance (ESG) products. As we begin 2022, many of those trends continue to hold as COVID-19’s wide-reaching effects continue to influence the wealth management industry.
As wealth management (WM) firms supercharge their digital transformation journeys, investments in cybersecurity and human-centered design are becoming critical to building superior digital client experience (CX). Another holdover trend − sustainable investing – is gaining mainstream attention and generating increasingly sophisticated client demands. Data and analytics capabilities will become ever more essential for ESG scoring and personalized customer engagement. As large financial services firms refocus on their wealth management business while new digital players make industry strides, competition is becoming historically intense. Not surprisingly, client experience is the new battleground.
This analysis provides an overview of the top trends in the retail banking sector driven by the competition, digital transformation, and innovation led by retail banks exploring novel ways to create and retain value in evolving landscape.
COVID-19 caught banks off guard and shook legacy mindsets to the core. With 20/20 (2020) hindsight, firms are more aware, digitally resilient, and financially stable as they head into 2022. The trials of the past 18 months forced firms to shore up existing business and consider new models and revenue streams.
Customer-centricity remains at the top of most FS agendas and is a 2022 focal point. Banks will focus on achieving operational excellence as diligently as delivering superior CX. In 2022 and beyond, it will be paramount for FIs to explore and invest in new technologies to remain relevant and resilient.
Banking 4.X will arrive in full force in 2022 with platform-supported firms monetizing diverse ecosystem capabilities and aggressively harvesting data to create experiential customer journeys through intelligent and personalized engagements. The new era will compel future-focused banks to finally abandon legacy infrastructure and collaborate with third-party specialists to solidify their best-fit, long-term roles. Increasingly, open platforms will make banks invisible as banking becomes embedded into customer lifestyles. At the same time, banks will shed asset-heavy models and shift to the cloud for greater agility, speed to market, and faster innovation. The shift will act as a precursor to adopting new technologies on the horizon – 5G and Decentralized Finance.
The recent past was filled will extraordinary lessons for financial institutions. Now is the time to act on those learnings and move forward profitably.
While COVID-19 has sparked the demand for life insurance, it has also exposed the operating model vulnerabilities in distribution, servicing, and customer retention. In a post-COVID, new-normal environment, insurers need to enhance their capabilities around advanced data management and focus on seamless and secure data sharing to provide superior CX and hyper-personalized offerings. Accelerated digitalization and faster go-to-market are vital to remaining competitive, and win-win partnerships with ecosystems are critical in the journey.
Read our Top Life Insurance Trends 2022 to explore the tactical and strategic initiatives carriers undertake to acquire competencies around customer centricity, product agility, intelligent processes, and an open ecosystem to ensure profitable growth and future readiness.
Property & Casualty Insurance Top Trends 2021Capgemini
The Property & Casualty insurance landscape is evolving quickly with the changing risk landscape, entry of new players, and changing customer expectations. The ripple effects of COVID-19 on the P&C insurance industry and natural disasters such as forest fires have adversely impacted insurance firm books.
In this scenario, to ensure growth and future-readiness, the most strategic insurers strive to be ‘Inventive Insurers’ – assuming a customer-centric approach, deploying intelligent processes, practicing business resilience and go-to-market agility, and embracing an open ecosystem.
Read our Property & Casualty Insurance Top Trends 2021 report to explore the strategies insurers are adapting to remain competitive amidst the evolving business landscape and how they can explore new ways to enhance their profitability.
A combination of factors such as demographic changes, evolving consumer preferences, and desire to become operationally efficient were already spurring changes in the life insurance industry. Enter 2020 – the COVID-19 pandemic is having a significant impact on the industry.
At the peak of disruption, the focus was on ensuring business continuity, but new initiatives are cropping up to tackle the challenges as the industry is adapting to the new normal.
Furthermore, COVID-19 has acted as a catalyst, pushing life insurers to prioritize their efforts on improving customer centricity, developing go-to-market agility, making processes intelligent, building business resilience, and embracing the open ecosystem.
Read our Life Insurance Top Trends 2021 report to explore the strategies insurers are adopting to manage the changing market dynamics.
The uncertainty of 2020 is setting the global tone for the immediate future in the financial services industry. So it is no surprise banks are laser-focused on business resilience, emphasizing both financial and operational risks. The need to adapt quickly to new normal conditions through virtual customer engagement is clear.
Customer centricity continues to drive commercial banks’ solution designs. And, the pandemic compelled products that deliver immediate client value ‒ quick digital onboarding, seamless lending, and support for small and medium-sized enterprises (SMEs). The onus is now on banks to go to market more quickly, which requires the implementation of intelligent processes and integrating corporates’ enterprise resource planning (ERP) systems with banking workflows.
To achieve go-to-market agility, banks across the globe are investing in and collaborating with FinTechs. Many of these partnerships are focused on boosting digital lending and providing seamless support to anxious small-business clients in need of assurance.
With newfound impetus for FinTech collaboration, commercial banks have picked up their step on the path toward OpenX. COVID-19 made it evident that survival during turbulence is manageable through collaboration with ecosystem players.
Read our Top Trends in Commercial Banking 2021 report to explore the strategies banks are adapting to transform their businesses from a product-led, siloed model to an experiential and agile plan.
When we published the Top Trends in Wealth Management 2020, little did we foresee the pandemic that would sweep through the world and disrupt life as we knew it. Yet, when we reviewed last year’s trends, we found that many still hold and some have taken on even greater relevance. One such trend is sustainable investing, which had begun to gain prominence as investors became more aware of ESG considerations, and firms rolled out more sustainable investing offerings. Another trend that has accelerated in the post-COVID world is the importance of investing in omnichannel capabilities and technologies such as artificial intelligence (AI) to enhance personalization and advisor effectiveness. The pandemic has driven wealth management firms to accelerate their digital transformation journey, with some immediate focus areas being interactive client communications and digital advisor tools.
There is no denying that time is of the essence. Yes, budgets are tight, but the Open X ecosystem offers wealth management firms opportunities to reimagine their operating models and deliver excellent customer experience cost-effectively.
Top trends in Payments: 2020 highlighted the payments industry’s flux driven by new trends in technology adoption, innovative solutions, and changing consumer behavior. The pandemic has tested the digital mastery of players, who are already grappling with transition. Non-cash transactions are on a robust growth path, accelerated by increased adoption during COVID-19. Regulators are working to instill trust and address non-cash payments risk amid unparalleled growth as players collaborate to quell uncertainty. Regional initiatives, such as the P27 (Nordics real-time payments system) and the EPI (European Payments Initiative), are gaining traction in response to country-level fragmentation and competition.
Investment in emerging technologies is looked upon as an elixir to mitigate fraud, data-driven offerings are being considered for providing value-added propositions, and distributed ledger technology is in focus for digital currency solutions, efficiency enhancement, and cost gains. New players, such as retailers/merchants, are integrating payments into their value chains while technology giants are upscaling their financial services game by weaving offerings around payments as a center stage. Constrained by budgets, firms consider business models such as Platform-as-a-Service (PaaS) to provide cost-effective and superior customer experience.
A combination of factors, including demographic changes, evolving consumer preferences, and regulatory and compliance mandates, were already spurring change in the health insurance industry. Enter 2020 and the COVID-19 pandemic, which is having sweeping implications for the industry.
At the peak of disruption, the focus was on ensuring business continuity, but new initiatives are cropping up to tackle the challenges as the industry adapts to the new normal.
Furthermore, some changes are here to stay, and it will be prudent for the industry players to be resilient to the market shifts by being agile, improving member centricity, making processes intelligent, and embracing the open ecosystem.
Read our Health Insurance Top Trends 2021 report to explore the strategies insurers are adopting to manage the external pressures.
The banking industry’s resilience is being tested as banks navigate through a remarkable 2020 filled with uncertainties. The impact of COVID-19 has been about setting the tone for future operational models. Retail banks have shifted focus towards integrated risk management with a more holistic view of operational risks. Adapting to the new normal, banks have prioritized cost transformation while engaging customers virtually. Incumbents sought to be more responsible within fast-changing environmental conditions and ESG remained a critical focus.
To provide more experiential services, banks are leveraging techniques such as segment-of-one to hyper-personalize offerings while aiming to humanize digital channels for increased engagement. Banks are also revamping middle and back offices, going beyond the front end leveraging intelligent processes. Open X is enabling banks to play on their strengths and use the expertise of ecosystem players. Going forward, banks are poised to become an enhanced one-stop shop by providing consumers value-adding FS and non-FS experiences.
To acquire customers in cost-effective manner, retail banks are tapping value-based propositions ‒ such as POS financing and mortgage refinancing. Further, Banking-as-Service provides incumbents a way to provide their high-value offerings to other players. In preparation for the future, banks will be looking to improve their go-to-market agility by leveraging the benefits of cloud. This analysis outlines the top 10 trends in retail banking for 2021.
Explore how Capgemini’s Connected autonomous planning fine-tunes Consumer Products Company’s operations for manufacturing, transport, procurement, and virtually every other aspect of the supply-value network in a touchless, autonomous way.
Financial services is undergoing a paradigm shift that is forcing incumbent retail banks to rethink growth strategies as they struggle to remain relevant. Growing competition from BigTechs, FinTech firms, and challenger banks has added to the complexity created by increasingly stringent regulatory and compliance requirements. Customers now expect a seamless customer journey and personalized offerings because they have become accustomed to top-notch individualized service from GAFA giants Google, Apple, Facebook, and Amazon. The changing ecosystem offers established banks new, unexplored opportunities and encourages a transition beyond traditional products to meet the exacting requirements of today’s customers. Bank collaboration with FinTech and RegTech partners is becoming commonplace. Incumbents are exploring point-of-sale financing and unsecured consumer lending, while they also boost their digital channel competencies to reach a broader customer base. Banks are beginning to accept open APIs and are working with third-party specialists to create an open shared marketplace. Technological advancements such as AI are fueling efforts to evolve customer onboarding and touchpoint processes. Increasingly, banks are turning to design thinking methodology to understand the customer journey, extract deep insights, and develop a more refined user experience across the customer lifecycle.
Our analysis of the top retail banking trends for 2020 offers a glimpse into the fast-changing banking ecosystem and explores the tools and solutions being used to face new-age challenges.
Aspects of the life insurance industry have remained constant for years – and so have premiums. Traditional savings products have taken a huge hit in terms of attractiveness because low interest-rates prevail. Meanwhile, the risk landscape is shifting, and insurers need to align better with the emerging business environment, manage changing customer preferences, and improve operational efficiencies. Within today’s scenario, industry players are undertaking tactical and strategic shifts in attempts to manage unpredictable market dynamics. Insurers must develop alternative products to breathe new life into policies and leverage emerging technologies (artificial intelligence (AI), analytics, and blockchain) to improve efficiency, agility, flexibility, and customer-centricity.
Read Top Trends in Life Insurance: 2020 for a look at the innovative steps future-focused insurers are considering to meet industry challenges and opportunities.
The health insurance industry is evolving and undergoing significant changes. As the risk landscape shifts, insurers are working to improve operational efficiencies, meet evolving customer preferences, and align better with the changing business environment. Accordingly, payers must adapt and align business models and offerings. An incisive tactical approach is required to accommodate members’ needs and related emerging risks — medical, health, and environmental. Advanced technologies such as artificial intelligence, analytics, automation, and connected devices are enabling insurers to manage these changes proactively, partner with members, and help to prevent risks, all the while continuing to fulfill payer responsibilities.
Read Top Trends in Health Insurance: 2020 to learn which strategies insurers are adopting to navigate and align with today’s challenges.
Similar to other financial services domains, payments is evolving into an open ecosystem. The EU’s Payment Services Directive (PSD2) pioneered open banking by encouraging banks and established payments players to securely open the systems to foster competition, innovation, and more customer choices. In tandem with non-cash transaction growth, regulations are driving banks and payments firms to expand their array of payment methods and channels. Governments are encouraging financial inclusion by also promoting the adoption of non-cash payments. Increasingly, merchants and corporates seek to offer alternative payment systems because of widespread popularity among consumers. Alternative payments also enable merchants to provide real-time and cross-border payments to boost business efficiency.
Banks, payment firms, card firms, BigTechs, FinTechs, and other players are continuously developing new technology to cash in on market changes. However, data breaches and fraud continue to hinder innovation as firms devote countless resources each year to address security issues. Many governments are also designing new regulations to reduce ecosystem threats. All these measures are expected to make the current ecosystem much more secure and simple for players as well as customers.
Top Trends in Payments: 2020 explores and analyzes payments ecosystem initiatives and solutions for this year and beyond
LF Energy Webinar: Electrical Grid Modelling and Simulation Through PowSyBl -...DanBrown980551
Do you want to learn how to model and simulate an electrical network from scratch in under an hour?
Then welcome to this PowSyBl workshop, hosted by Rte, the French Transmission System Operator (TSO)!
During the webinar, you will discover the PowSyBl ecosystem as well as handle and study an electrical network through an interactive Python notebook.
PowSyBl is an open source project hosted by LF Energy, which offers a comprehensive set of features for electrical grid modelling and simulation. Among other advanced features, PowSyBl provides:
- A fully editable and extendable library for grid component modelling;
- Visualization tools to display your network;
- Grid simulation tools, such as power flows, security analyses (with or without remedial actions) and sensitivity analyses;
The framework is mostly written in Java, with a Python binding so that Python developers can access PowSyBl functionalities as well.
What you will learn during the webinar:
- For beginners: discover PowSyBl's functionalities through a quick general presentation and the notebook, without needing any expert coding skills;
- For advanced developers: master the skills to efficiently apply PowSyBl functionalities to your real-world scenarios.
Essentials of Automations: Optimizing FME Workflows with ParametersSafe Software
Are you looking to streamline your workflows and boost your projects’ efficiency? Do you find yourself searching for ways to add flexibility and control over your FME workflows? If so, you’re in the right place.
Join us for an insightful dive into the world of FME parameters, a critical element in optimizing workflow efficiency. This webinar marks the beginning of our three-part “Essentials of Automation” series. This first webinar is designed to equip you with the knowledge and skills to utilize parameters effectively: enhancing the flexibility, maintainability, and user control of your FME projects.
Here’s what you’ll gain:
- Essentials of FME Parameters: Understand the pivotal role of parameters, including Reader/Writer, Transformer, User, and FME Flow categories. Discover how they are the key to unlocking automation and optimization within your workflows.
- Practical Applications in FME Form: Delve into key user parameter types including choice, connections, and file URLs. Allow users to control how a workflow runs, making your workflows more reusable. Learn to import values and deliver the best user experience for your workflows while enhancing accuracy.
- Optimization Strategies in FME Flow: Explore the creation and strategic deployment of parameters in FME Flow, including the use of deployment and geometry parameters, to maximize workflow efficiency.
- Pro Tips for Success: Gain insights on parameterizing connections and leveraging new features like Conditional Visibility for clarity and simplicity.
We’ll wrap up with a glimpse into future webinars, followed by a Q&A session to address your specific questions surrounding this topic.
Don’t miss this opportunity to elevate your FME expertise and drive your projects to new heights of efficiency.
Accelerate your Kubernetes clusters with Varnish CachingThijs Feryn
A presentation about the usage and availability of Varnish on Kubernetes. This talk explores the capabilities of Varnish caching and shows how to use the Varnish Helm chart to deploy it to Kubernetes.
This presentation was delivered at K8SUG Singapore. See https://feryn.eu/presentations/accelerate-your-kubernetes-clusters-with-varnish-caching-k8sug-singapore-28-2024 for more details.
Dev Dives: Train smarter, not harder – active learning and UiPath LLMs for do...UiPathCommunity
💥 Speed, accuracy, and scaling – discover the superpowers of GenAI in action with UiPath Document Understanding and Communications Mining™:
See how to accelerate model training and optimize model performance with active learning
Learn about the latest enhancements to out-of-the-box document processing – with little to no training required
Get an exclusive demo of the new family of UiPath LLMs – GenAI models specialized for processing different types of documents and messages
This is a hands-on session specifically designed for automation developers and AI enthusiasts seeking to enhance their knowledge in leveraging the latest intelligent document processing capabilities offered by UiPath.
Speakers:
👨🏫 Andras Palfi, Senior Product Manager, UiPath
👩🏫 Lenka Dulovicova, Product Program Manager, UiPath
Key Trends Shaping the Future of Infrastructure.pdfCheryl Hung
Keynote at DIGIT West Expo, Glasgow on 29 May 2024.
Cheryl Hung, ochery.com
Sr Director, Infrastructure Ecosystem, Arm.
The key trends across hardware, cloud and open-source; exploring how these areas are likely to mature and develop over the short and long-term, and then considering how organisations can position themselves to adapt and thrive.
UiPath Test Automation using UiPath Test Suite series, part 3DianaGray10
Welcome to UiPath Test Automation using UiPath Test Suite series part 3. In this session, we will cover desktop automation along with UI automation.
Topics covered:
UI automation Introduction,
UI automation Sample
Desktop automation flow
Pradeep Chinnala, Senior Consultant Automation Developer @WonderBotz and UiPath MVP
Deepak Rai, Automation Practice Lead, Boundaryless Group and UiPath MVP
DevOps and Testing slides at DASA ConnectKari Kakkonen
My and Rik Marselis slides at 30.5.2024 DASA Connect conference. We discuss about what is testing, then what is agile testing and finally what is Testing in DevOps. Finally we had lovely workshop with the participants trying to find out different ways to think about quality and testing in different parts of the DevOps infinity loop.
GraphRAG is All You need? LLM & Knowledge GraphGuy Korland
Guy Korland, CEO and Co-founder of FalkorDB, will review two articles on the integration of language models with knowledge graphs.
1. Unifying Large Language Models and Knowledge Graphs: A Roadmap.
https://arxiv.org/abs/2306.08302
2. Microsoft Research's GraphRAG paper and a review paper on various uses of knowledge graphs:
https://www.microsoft.com/en-us/research/blog/graphrag-unlocking-llm-discovery-on-narrative-private-data/
2. 2
Are Traditional Loyalty Programs Broken?
More than half of
consumers in a 2013
survey admitted they
had abandoned at least
one loyalty program in
the past year.
Almost 90% of social
media sentiment
towards loyalty
programs is negative.
Launching a loyalty program is expensive
and it’s complex. In the US, companies
spend a staggering $2 billion on loyalty
programs every year1
. But does this
translate into increased customer
engagement? Research suggests the
answer is “probably not”. The average
household in the US has over 21 loyalty
programmemberships.But,thehousehold
only actively uses 44% of these2
. More
than half of consumers in a 2013 survey
admitted they had abandoned at least one
loyalty program in the past year3
.
Our own analysis of customer sentiment
on social media revealed pronounced
dissatisfaction (see research methodology
at the end of the paper). Almost 90% of
social media sentiment on loyalty programs
was negative. And this negativity extends
across industries (see Figure 1). Among
Millennials, who are expected to spend
more than $200 billion annually by 20174
,
negative sentiment stood at 85%.
Figure 1: Loyalty Programs - Social Media Sentiment
Source: Capgemini Consulting Analysis, Social Media Scan conducted in December 2014
Note: The objective of the scan was to assess how satisfied or dissatisfied customers are with current loyalty programs. Consequently, we focused only on opinions expressed
by users, rather than on neutral comments and questions.
96%
94%
93%
88%
72%
Telecom
Consumer Electronics
Retail
Airlines
Hotel Chains
% of unfavorable customer opinions on social media
Comparison by Industry Segment
Overall: 89% | | Millennials: 85%
This is a worry. Loyalty programs are meant
to engage. But they’re not. Key reasons
for the negative social media sentiment
on loyalty programs include lack of reward
relevance, rigid reward structures, user
experience issues with online channels,
and poor customer service quality levels
(see Figure 2). Organizations clearly need
to do more to address these issues.
3. 3
44% of the negative
sentiment towards
loyalty programs was
due to the lack of reward
relevance, flexibility and
value.
Figure 2: Key Reasons for Negative Social Media Sentiment on Loyalty Programs
Source: Capgemini Consulting Analysis, Social Media Scan conducted in December 2014
French cosmetics retailer Sephora is using
digital technologies to improve matters
and deliver a superior and connected
customer experience. Members of
Sephora’s “Beauty Insider” loyalty
program can sync their loyalty accounts
with Sephora’s mobile app as well as the
Apple Passbook mobile wallet5
. This gives
a more seamless purchase experience.
Using mobile devices, customers can
track their purchases, view offers, and
44%
Key Consumer Pain
Points:
33%
Key Consumer Pain
Points:
CustomerService Issues
17%
Key Consumer Pain
Points:
Rewards not aligned to
consumer preferences
Rigid reward mechanisms
– long lead times before
consumers become
eligible to claim benefits,
no rewards for referrals
Cross-selling and driving
sales appears to be the
chief motive behind
loyalty programs rather
than providing value to
consumers
Lack of adequate
redemption mechanisms
– users unable to redeem
rewards through channels
of their choice
Poor user experience on
mobile apps and websites
(complex navigation,
outdated information,
inability to redeem
rewards, software
compatibility issues)
Loss of loyalty points and
delays in crediting benefits
due to technical errors in
linking rewards with online
accounts
Long call wait times,
multiple transfers to
customer service
representatives before an
issue is resolved
Unpleasant experiences
during direct interactions
with service representatives
such as gate agents at
airports and in-store staff
Call center representatives
unaware of issues with
online channels
(ex: incorrect information
on website)
Lack ofReward Relevance,
Flexibilityand Value
Lack ofa Seamless
Multi-ChannelExperience
redeem reward points on the go. The
strategy has worked. Sephora’s Passbook
users have double the annual spends and
purchase twice as often as the average
Sephora customer6
.
Sephora is a stand-out example. But
where do most organizations stand when it
comes to revamping their loyalty programs
for the digital age?
4. 4
Loyalty Programs Out of Step with Digital
Most companies have
basic transactional
loyalty programs,
where rewards are based
primarily on purchase.
Customers today are
actively engaged with
the brand. They want to
be asked about how to
design the new loyalty
program, or what items
should be sold in the
store.
- Leading Online Book
Retailer
We assessed loyalty programs on a
number of parameters. These included
their central objective, their use of digital
channels, and their ability to provide a
seamless experience across channels
(more detail on the approach is at the end
of this paper). We found, in short, that
companies have a lot of catching up to do.
Transactional Mindsets
Dominate
Most companies have basic transactional
loyalty programs, where rewards are based
primarily on purchase. The customer
makes a purchase and takes their points in
exchange for gifts, merchandise or cash.
Our research shows that 97% of loyalty
programs still use this basic philosophy
(see Figure 3). This continued reliance on
transactional rewards-only programs is
sub-optimal. 77% of programs like this
actually fail in the first two years7
.
Companies are struggling to break out
of the narrow transactional mindset.
According to our research, only 25% of
loyalty programs reward customers for
some form of engagement. For instance,
only 16% of loyalty programs reward
customers for activities such as taking
online surveys, rating and reviewing
establishments or referring friends to the
program. Similarly, only 14% employ
gamification techniques to reward
Figure 3: Reward Mechanisms in Loyalty Programs
N=160
Source: Capgemini Consulting Analysis
Note: Percentages do not add up to 100 as a company may reward customers in multiple ways
97%
16%
14%
6%
4%
...Purchases
...Activities (ex: writing reviews,
taking surveys)
…Participation in Gamification
Campaigns
...Mobile App Downloads
...Social Media Engagement
Rewardsbasedon…
% of companies
Transaction-based
rewards
Engagement-based
rewards -
Overall, only 25%
of companies
reward any one of
these forms of
engagement
...In-Store Checkins 2%
customers (see Figure 3). Companies
don’t yet have their finger on the pulse of
the digital consumer.
A VP responsible for Loyalty at a leading
online book retailer stressed to us the
criticality of connecting with the customer.
“Customers today are actively engaged
with the brand. They want to be asked
about how to design the new loyalty
program, or what items should be sold
in the store,” he explained. “So, there is a
growing need for two-way communication
between the loyalty program and the
customer.”
5. 5
Personalization needs
to become much more
nuanced, going
beyond the broad
tier-based approach.
- Leading Consumer
Products Company
Figure 4: Industry-wise Adoption of Engagement-based Reward Mechanisms
N=160
Source: Capgemini Consulting Analysis
Note: Our research focused on 5 ways in which loyalty programs reward a customer for engagement – activities (ex: writing reviews, taking surveys), participation in gamified
campaigns, mobile app downloads, social media engagement, and in-store checkins.
An industry-wise comparison shows
that some industries are ahead of the
curve. 57% of airlines and 41% of hotel
chains reward consumers for a range of
behaviors that reflect engagement, other
than transactions (see Figure 4).
57%
41%
35%
15%
12%
7%
3%
Airlines
Hotel Chains
Consumer Products
Consumer Electronics
Retail
Telecom
Banking
% of companies that reward customers for
at least one form of engagement
Seamless Cross-Channel
Customer Experience Has
Gone AWOL
Companies deliver their loyalty programs
across offline and online channels, but do
customers get an integrated experience?
To answer that question, we focused
on a specific aspect of this question
– redemption of loyalty rewards. We
found significant room for improvement
(see Figure 5). Although a significant
79% of loyalty programs use the mobile
channel, only 24% allow redemption
through it. Most importantly, only 9% of
loyalty programs offer points redemption
across all channels. Clearly, cross-
channel redemption is far from being
complete. The Global Head of Consumer
Insights at a leading F&B major told us
that organizations need to strengthen
redemption mechanisms. “Consumers are
becoming more and more demanding,” he
said. “The entire redemption and reward
mechanism, and everything associated
with it, needs to become much sharper.”
6. Customization and
Personalization:Could Do
Better
Companies segment their customers
but customization is still very basic. A
typical approach uses Platinum, Gold
and Silver tiers. Tier-based programs are
characterized by “classes” assigned to
members, typically based on purchase
volumes. Loyalty offers are customized
based on class. Our research shows that
as many as 45% of loyalty programs follow
a tier-based method.
Where loyalty programs are lacking is
advanced personalization, such as offers
based on location or purchase history. Only
11% of loyalty programs offer personalized
rewards based on a customer’s purchase
history or location data. A senior marketing
executive at a leading consumer products
company acknowledged the need
Only 16% of loyalty
programs reward
customers for
activities such as
taking online surveys,
rating and reviewing
establishments or
referring friends to the
program.
for increased personalization in loyalty
programs. “Personalization needs to
become much more nuanced, going
beyond the broad tier-based approach,”
he explained. “Now, because you have
muchmoredataavailable,youcandevelop
better and more targeted programs based
on the history of the consumer.”
6
The entire redemption
and reward mechanism,
and everything
associated with it, needs
to become much sharper.
- Leading F&B Company
Figure 5: Support for Reward Redemption across Channels
N = 160
Source: Capgemini Consulting Analysis
83%
62%
24%
9%
Website
Mobile Apps
All Channel
% of companies
In-Store
7. Integrate with the Overall
Customer Experience
Integrating loyalty programs with the
overall customer experience is essential.
“My Starbucks Rewards” exemplifies
this approach. Starbucks CEO Howard
Schultz highlighted the intersection
between a superior customer experience
and loyalty when he said: “By integrating
mobile loyalty, payment, and in-store
digital experiences, we are creating game-
changing technologies and experiences
for our customers, and the opportunity
to introduce new lines of business for our
company8
.” The firm integrated its “My
Starbucks Rewards” program with the
Starbucks mobile payments app. This
allowed consumers to earn and redeem
reward points directly from mobile devices.
The seamless experience has accelerated
adoption of the app and driven consumer
engagement with the loyalty program. The
Starbucks app has 12 million active users
and accounts for 7 million transactions a
week, while “My Starbucks Rewards” has
8 million active members9
.
Deliver Personalized
Customer Experiences
Tier-based customization is the norm.
But, to differentiate, you need advanced
personalization. UK-based telecom
operator O2, for instance, segments
customers based on their brand
preferences, tenure and spending. It also
offers targeted location-based offers as
part of its “Priority Moments” mobile loyalty
program. Eighteen months after launch,
“Priority Moments” became the fastest
growing loyalty program in the UK. It has
delivered millions of pounds in savings in
reduced customer churn10
.
7
UK-based telecom
operator O2 offers
targeted location-based
offers as part of its
“Priority Moments”
mobile loyalty program.
What Good Looks Like
Innovate with Social Media
Channels to Build Intimacy
Reward Members for Social Media
Engagement. Social media channels,
when used effectively, can significantly
enhance the impact of loyalty
programs. Multi-partner loyalty program
BalticMiles launched a highly successful
crowdsourcing initiative on Facebook
– called “BalticMiles Brainstorm”. The
initiative encouraged members to
contribute ideas on the types of benefits
that they desired from the program.
Winning ideas – the ones that received the
maximum number of Facebook “Likes”
– were rewarded with 100,000 points.
In addition, winners were invited to work
with the BalticMiles team to develop their
ideas further. The BalticMiles Brainstorm
campaign generated over 420 new ideas
and 6,000 comments that served as the
basis for various improvements in the
program11
. In addition, the campaign
resulted in higher member engagement
rates as well as a significant increase in
transactions via payment cards linked with
the loyalty program12
.
Use Social Listening Techniques to
Understand Customer Needs. Turkcell
– Turkey’s leading mobile phone operator
– has used social listening to improve its
loyalty program. One of its loyalty initiatives
– called “Gnctrkcll” – is aimed at the
youth segment. So, in 2012, it launched
a Facebook campaign to elect youth
ambassadors who could represent this
segmentandbuildTurkcell’sunderstanding
of its needs. Five youth ambassadors were
selected from among 17,000 candidates.
Turkcell received thousands of comments
as a result of these ambassadors’ one-to-
one social media interactions with other
consumers. This helped it create more
targeted rewards13
.
Use Gamification
Techniques to Drive Deeper
Participation
The introduction of game-based content
into loyalty programs has helped
organizations such as Air Canada. With
its “Earn Your Wings” campaign, Air
Canada awarded badges to flyers when
they completed specific ‘challenges’.
For instance, members got the “Pacific
Badge” every time they took off or landed
at specified airports located on the Pacific
coast, such as Sydney. These badges
were then redeemable in air-miles. Top
badge winners were showcased on a
leaderboard on Air Canada’s website14
.
Air Canada reported an ROI of 560% for
the program15
and saw registration levels
that were double its initial forecast16
. Such
examples are powerful reminders of how
game mechanics can be used to drive
customer engagement.
Provide Value Beyond the
Traditional
A number of programs stand apart by
offering value beyond the traditional deals
and discounts. US-based pharmacy
chain Walgreens launched the “Balance®
Rewards for healthy choices” initiative
as part of its “Balance Rewards” loyalty
program, to encourage its members
to adopt healthy lifestyle practices. The
program allows members to connect
their digital health trackers with the
Walgreens mobile app. Members are
awarded points whenever they engage
in a healthy activity17
. The success of the
Balance Rewards program is evident in its
members’ engagement levels – 80 million
of the program’s 103 million members are
active participants18
.
US-based pharmacy
chain Walgreens rewards
members of its ‘Balance®
Rewards for healthy
choices’ program for
adopting healthy lifestyle
practices.
8. 8
Integrates loyalty
seamlessly with mobile
payments
Hugely successful,
with 8 million
active members
Segments customers based on
their profile, provides
location based offers
Became fastest growing
program in the UK within 18
months of launch
How do Successful Loyalty Programs
Differentiate Themselves?
Integrated with the Overall Customer Experience
My Starbucks Rewards
Turkcell Gnctrkcll
Walgreens Balance Rewards
O2 Priority Moments
Air Canada Earn Your Wings
Employ Gamification Techniques to Drive Greater Participation
Deliver Customized and Personalized Offerings
Leverage the Power of Social Media Channels
Look Beyond Transactional Rewards
Actively employs social
listening techniques to
understand customer needs
Received thousands
of comments, used
them to improve rewards
Awards “badges” to flyers for
activities such as checking in at
specific airports
Reported an RoI of
560% for the
program
Awards points to members for
engaging in healthy
activities
Mobile app can
integrate with
digital health trackers
9. 9
The Way Ahead:Reinventing Loyalty Programs
Engage your Customer,
Loyalty will Follow
A customer who is highly engaged with a
brand or company is equally likely to be
loyal. A study found that “fully engaged”
customers (those with a strong attachment
to the brand, or brand ambassadors)
deliver a 23% premium over the average
customer in share of wallet, profitability
and revenue. Conversely, “actively
disengaged” customers (those who have
negative feelings towards the brand, or
spread negative word-of-mouth) represent
a 13% discount in the same measures19
.
Customer engagement is the sum total
of specific, actual behaviors that can be
measuredintheimmediateterm.Customer
loyalty is an outcome and measured by
the quantum of repurchase over the longer
term. Engagement is therefore a leading
indicator of customer loyalty and financial
performance, while loyalty by itself is a
lagging indicator of financial performance.
An excessive focus on loyalty comes at the
Engagement is a leading
indicator of customer
loyalty and financial
performance, while
loyalty by itself is a
lagging indicator of
financial performance.
Figure 6: Developing an Engagement-Based Loyalty Program
Source: Capgemini Consulting Analysis
expense of healthy customer interaction.
And it is exactly this interaction that could
have been used to enhance engagement
and drive brand preference. Consequently,
loyalty programs need to be seen within
the larger context of a marketing strategy
that is focused on driving customer
engagement. Developing an engagement-
based loyalty program means looking at
each step of the development process
through the prism of engagement (see
Figure 6).
Design Loyalty Programs in
Line with the Needs of the
Digital Consumer
Develop a Contextual View of the
Customer. In order to have a meaningful
dialogue with their most valuable
customers, organizations need to
understand the context of their needs
and behaviors at different stages of the
customer journey. Loyalty programs
should be designed with a view to fulfilling
these needs (see Figure 7). However, in
order to develop such an understanding
of customer needs, existing customer
profiles must be enriched with relevant
data on customer interactions across
offline and online touchpoints. Point of
Sale (POS) data must be augmented with
social media and location data to create
a more complete picture of a customer’s
preferences and pain points. In addition,
organizations will need to address
persistent data management issues,
particularly those arising from poor data
integrity and silo-ed data sources. Rules
and procedures will need to be established
to ensure that data coming in from multiple
Design Implement Measure Iterate
Obtain a contextual
view of customer needs
and behaviors
Upgrade reward
mechanisms to
recognize and reward
engagement
Set up adequate
safeguards for data
privacy
Integrate teams to break
down silos
Set up an integrated
technology platform
Strengthen the mobile
channel
Build predictive
behavioral models
Mobilize customer facing
teams
Establish appropriate
metrics to measure
success
Combine operational
metrics (ex: enrollment
and redemption rates)
with engagement-based
metrics (ex: time spent
online or in-store, social
media sentiment)
Continually evolve the
program based on
changing customer needs
Work with a test-and-learn
approach to change rapidly
10. 10
channels is cleaned and formatted before
it is ready for use. This a critical first step
to designing loyalty programs that deliver
relevant, engaging experiences.
Upgrade Traditional Reward Structures
to Recognize Engagement and
Incentivize Advocacy. Traditional reward
structures must be upgraded. They need
to ensure that customers are recognized
and rewarded not only for completing
transactions but also for engaging
and interacting with the brand in other
meaningful ways. Reward mechanisms
should recognize customers for brand
advocacy on social media, for sharing
feedback and writing reviews, and for
participating in game-based campaigns.
Luxury cosmetics brand Lancôme’s Elite
Rewards loyalty program, for instance,
strongly incentivizes brand advocacy.
While members receive 10 points for
every dollar that they spend on Lancôme
merchandise, they receive up to 25 points
for sharing Lancôme’s product posts on
their Facebook, Instagram, and Twitter
pages20
. Incentivizing brand advocacy
in this manner serves two significant
purposes. First, it conveys the message
that the brand values the support of its
customers. Second, it carries the brand’s
messaging to a more receptive target
audience, since consumers tend to trust
word-of-mouth recommendations from
people they know, more than they trust
traditional advertising21
.
In looking beyond transactions and
providing more avenues for consumers to
earn rewards, loyalty programs will also be
addressing a key consumer pain point –
the long lead times for the accumulation of
points. The Head of Loyalty and Rewards
at a leading bank highlighted the need
to revamp traditional reward structures:
“What we are finding is that when you
reward customers for non-transactional
behavior like following your brand on
Facebook or Twitter, they start feeling
emotionally invested in your brand. They
start feeling like you understand who they
are, how they see the world, and how
they express themselves. This emotional
investment is key to driving loyalty in the
long term.”
In order to have a
meaningful dialogue
with their most
valuable customers,
organizations need to
understand the context
of their needs and
behaviors.
Loyalty programs
should clearly
communicate the types
of data they collect and
how the data is used.
Figure 7: Customer Needs and their Impact on Loyalty Program Design
Source: Capgemini Consulting Analysis
-
Focus on Quality and
Value
Show me value
Focus on Personalized Engagement
Make it easy and
timely for me
Be relevant
Recognize me
Inspire me
I belong to a social
group. I care.
Focus on Inspiration, Innovation and Advocacy
Customer
Journey
Customer
Needs
Implications for
Loyalty Program
Design
I get 20% off
on the items
that matter
most to me
I can easily
redeem discounts
by downloading vouchers
to my mobile and
showing them at the till
I get reminded
of offers on my
shopping list
They know who I
am both online
and in store
I can use my
points in many
other places
I get points for
referring a friend
to the program
I enjoy
participating in
gamebased
‘challenges’
I get extra points
when I share my
experiences with
the community
I want to help
improve the
loyalty programs
that I am part of
11. 11
Figure 8: Seven Principles of Consumer Engagement to Promote Data Privacy
Source: “Consumer Engagement Principles” developed by the Consumer Goods Forum [Capgemini is a partner to the initiative]
Simple Communications Communicate in a clear, simple and easy to understand language
Value Exchange
Inform consumers about the benefits and value that the use of their personal
information provides to both businesses and consumers
Transparency Inform consumers about what we do with the personal information they provide
Control and Access
Enable consumers to easily choose whether and how their personal information
is used; and to have access to information on how their personal information is
used, and the ability to correct it and/or have it removed
Ongoing Dialogue Listen and respond to consumer feedback about the use of their personal data
Protection of Personal
Information
Protect the integrity, reliability and accuracy of consumers’ personal information
and be open about the status of their personal information
Integrity in Social
Media
Preserve integrity through proper disclosure of commercial interests in social
media practices such as ratings, recommendations, endorsements and work with
regulatory agencies on alignment of practices and guidelines
1
2
3
4
5
6
7
Set up an Integrated Technology
Platform. A seamless, multi-channel,
personalized loyalty program requires the
right technology platform. It needs to be
fully integrated with internal systems, such
as Point of Sale (POS), e-commerce, social
media, CRM, ERP, financial, and customer
service systems. The platform must support
cross-channel rewards redemption, enable
the aggregation of data and insights, and
support advanced analytics for real-time
rewards management and personalization.
Getting Team Structure,
Governance Mechanisms
and Technology
Infrastructure Right
Align the Organization on Delivering
a Seamless, Multi-channel Customer
Experience. To deliver a seamless customer
experience,loyaltyprogramsmustbeclosely
integrated with other elements of marketing
and brand strategy. Organizations must
break down internal silos to build greater
collaboration between teams. At Starbucks,
the digital marketing, mobile payments, and
loyalty teams were brought together under
the leadership of Chief Digital Officer, Adam
Brotman. Articulating the rationale for this,
he says: “We realized those were all one
thing, they all work best together and if
you listed the vision for where we wanted
to go with digital, it was encompassing all
those things23
.” Likewise, Walgreens set
up committees comprising stakeholders
from various groups that were affected by
its “Balance Rewards” loyalty program. This
was to ensure stakeholder alignment and
engagement24
.
Reward mechanisms
should recognize
customers for brand
advocacy on social media,
for sharing feedback and
writing reviews, and for
participating in
game-based campaigns.
Put Data Privacy at the Heart of Program
Design. Organizations must take proactive
steps to alleviate concerns about how
personal data is used. Loyalty programs
should clearly communicate the types
of data they collect and how the data is
used. This allows consumers to make
an informed choice about participation.
Loyalty programs should also incorporate
opt-in and opt-out mechanisms so that
people have full control over their personal
data.
The consumer goods industry recently
adoptedanewsetofguidelinestosafeguard
consumer information across digital
platforms (see Figure 8)22
. Organizations
across sectors should adopt such
guidelines in order to build great consumer
trust. Such measures can also be a key
differentiator for brands in an environment
where privacy is often sacrificed at the altar
of increased sales.
12. 12
Designing a loyalty program should not
be a one-off event. Organizations must
continue to listen to customer feedback
and monitor changes in behavior. This will
keep them in tune with changing customer
needs. Organizations should also prepare
themselves to continually adjust their
loyalty programs so that they keep
pace with these changing needs. This
requires a test-and-learn approach where
organizations rapidly experiment with new
ideas, measure the incremental benefit,
and then conduct full-scale rollouts.
Companies spend millions of dollars
on loyalty programs. Unfortunately, the
returns are often elusive. We live in an
age of information overload and are
saturated with loyalty programs. Inevitably,
customers are unlikely to be impressed
by another me-too offering. Organizations
need to think beyond points, discounts
and offers, and forge real relationships with
customers. A well-designed, engagement-
based loyalty program will create a virtuous
cycle: stronger customer relationships,
greater advocacy, and enhanced loyalty.
Organizations should
prepare themselves to
continually adjust their
loyalty programs so
that they keep pace with
changing customer needs.
However, given that most organizations
have highly complex IT landscapes, setting
up such a platform can be a significant
challenge. It is critical therefore, that
organizationsapproachtheimplementation
systematically, with careful planning. As a
first step, marketing and IT teams should
formulate a joint vision on the capabilities
required to deliver an engagement-based
loyalty program. This vision should serve
as the basis for the platform architecture.
Second, the platform should be
implemented gradually and iteratively, to
ease the process of integration. Finally,
the choice of technology components
should be based on the ease with which
they can be integrated with the existing IT
landscape.
Focus on Strengthening the Mobile
Channel. In line with the consumer
adoption of mobile devices, organizations
must pay specific attention to
strengthening the mobile channel for their
loyalty programs. Mobile apps should be
designed with a focus on ease-of-use.
They should provide easy access to up-
to-date information on program policy,
points balance, and offers. Crucially, the
app should also act as a mobile wallet
so that customers can instantly redeem
their reward points. A senior manager for
loyalty programs at a top global retailer
underscored the significance of the mobile
channel: “As smartphones increasingly
become more widespread, we would
reasonably expect to see everybody
accessing their loyalty programs almost
exclusively on a mobile basis.”
Build Predictive Behavioral Models to
Improve Reward Relevance. In order to
align rewards with a customer’s individual
preferences, organizations should use
predictive analytics techniques to identify
the offers that a member is most likely to
prefer and also to dynamically create new
offers in real-time.
Mobilize Customer-Facing Teams.
Customer-facing team-members need to
be on-side with an engagement-based
approach to loyalty before a program is
launched. Customer service teams must
be trained in the nuances of the new
program. Walgreens began a campaign to
enroll employees in its “Balance Rewards”
loyalty program. This measure was to
make sure they understood first-hand how
it worked and could act as ambassadors.
As part of the campaign, Walgreens
conducted webinars and created blogs to
educate employees on the program25
.
Define Metrics to Measure
Success in an Engaged
World
Traditional operational metrics, such as
enrollment and redemption rates, offer
useful insights into the health of a loyalty
program. However, you also need to
define additional metrics that measure
the level of customer engagement
generated. Operational metrics must be
complemented by engagement-based
metrics, such as time spent online or
in-store, social media sentiment, and
purchase recency26
.
Loyalty is a Journey, Not a
Destination
At Starbucks, the
digital marketing,
mobile payments, and
loyalty teams were
brought together under
the leadership of Chief
Digital Officer, Adam
Brotman.
As smartphones
increasingly become
more widespread, we
would reasonably
expect to see everybody
accessing their loyalty
programs almost
exclusively on a mobile
basis.
- Leading Global Retailer
13. 13
Research Methodology
Our research focused on three aspects – an extensive web-based research on current loyalty program initiatives, a social media scan
to gauge customer sentiment towards loyalty programs, and focus interviews with senior managers and heads of loyalty programs
at leading organizations.
Analysis of Current Loyalty Programs
Our research covered 160 companies across 7 sectors including Retail, Banking, Consumer Products, Telecom, Airlines, Hotel
Chains and Consumer Electronics. We analyzed leading companies within each sector to understand their approach towards loyalty
programs.
We studied the following aspects of each program:
1. Do loyalty programs utilize new digital channels to reach customers?
We analyzed whether loyalty programs use new channels such as Twitter, Facebook and mobile apps besides traditional channels
such as e-mail, contact centers and websites, to connect with customers.
2. What is the current approach to awarding loyalty points – is it primarily transactional or is it engagement-based?
We assessed whether companies are rewarding customers purely for transactions or for engaging with the brand in various ways
(ex: social media interactions, reviews, ratings and referrals).
3. Do loyalty programs offer seamless cross-channel rewards redemption?
We tested whether loyalty benefits are redeemable through offline as well as online channels.
4. What is the degree of personalization or customization offered by loyalty programs?
We analyzed two levels of customization:
- Basic customization: Involves a tier-based method of personalizing loyalty programs.
- Advanced customization: Involves personalizing the loyalty program based on the customer’s purchase history and location
(geo-spatial) data.
Assessment of Social Media Sentiment on Loyalty Programs
We conducted a scan of close to 40,000 consumer conversations on social media to gauge sentiment towards loyalty programs.
Customer sentiment, as expressed on social media channels such as Twitter, Facebook, blogs and discussion forums, was analyzed
using sophisticated sentiment analytics tools. The objective of the scan was to assess how satisfied or dissatisfied customers are
with current loyalty programs. In order to get an accurate view of the sentiment, we focused only on opinions expressed by users,
rather than on neutral comments and questions.
14. 14
1 Gallup, “Making Loyalty Programs Work: Companies must first fully engage customers and activate their participants”,
October 2011
2 Loyalty.com, “The 2013 COLLOQUY Loyalty Census”, 2013
3 Maritz Loyalty, “The 2013 Martiz Loyalty Report”, May 2013
4 Advertising Age, “Affluence in America: The Next Generation”, 2014
5 Retail-Week.com, “Analysis: The top seven examples of mobile technology”, July 2014
6 InternetRetailer.com, “Apple Passbook users are among Sephora’s best customers”, April 2013
7 Entrepreneur, “How Rewards Are Running Loyalty Programs Into the Ground”, April 2014
8 Yahoo Finance, “Starbucks’ (SBUX) CEO Howard Schultz Discusses Q3 2014 Results - Earnings Call Transcript”, July 2014
9 Starbucks 2014 Investor Day, Presentation by Adam Brotman, Chief Digital Officer
10 TheGuardian.com, “The mobile revolution is here – are you ready?”, 2014
11 Simpliflying.com, “[SimpliClient] BalticMiles wins Global Innovation in Technology Award at Loyalty 2013”, February 2013
12 TheLoyaltyAwards.com, “Winners Supplement 2013”, 2013
13 TheLoyaltyAwards.com, “Winners Supplement 2013”, 2013
14 Earn Your Wings webpage at AirCanada.com
15 Spafax.com, “Air Canada Earn Your Wings Wins COLLOQUY Recognizes Award”, June 2014
16 Gamification.co, “Earn Your Wings: Air Canada’s Successful Gamification Venture into Loyalty”, July 2013
17 Walgreens.com, “Balance Rewards for healthy choices™”
18 Loyalty360.com, “Walgreens Seeks Lifetime Loyalty through Balance Rewards Program”, April 2014
19 Gallup, “State of the American Consumer: Insights for Business Leaders”, June 2014
20 Adweek, “Lancôme Is Getting a 60% Monthly Action Rate With New Loyalty Program”, August 2014
21 Nielsen, “Under the Influence: Consumer Trust in Advertising”, September 2013
22 The Consumer Goods Forum Press Centre, “Consumer Goods Industry Commits to New Guidelines on Consumer
Engagement and Data Privacy”, February 2015
23 MIT Sloan Management Review, “How Starbucks Has Gone Digital”, April 2013
24 Loyalty360.org, “Walgreens Seeks Lifetime Loyalty through Balance Rewards Program”, April 2014
25 AgilityLoyalty.com, “One Giant Step for Loyalty: A Q&A with Walgreens’ Graham Atkinson, COLLOQUY”
26 Purchase recency is a measure of engagement that captures the time that has lapsed since a customer’s last purchase
References