Loyalty programs are not new. Before the age of smart phones, people were carrying punch cards to get a free gift of some kind (e.g.: a free drink) when they got the whole card was punched. Carrying those cards was a messy affair and definitely not scalable on both ends. Smart phone based loyalty programs changed all that and brought several innovations on how these loyalty programs were instituted.
Last week, my friend Tony Padam (founder of CaptureCode) gave me a demo of the loyalty program they created for b.good, a restaurant chain in Boston. The feature that caught my attention most was an option to redeem the rewards in a very different way -- to give them as gifts to someone you love OR better yet, give it as a gift to a school or someone in the community that deserves it.
In a matter of days, more than hundred rewards were given away as gifts. Everyday love was spreading through the little b.good app. It was a perfect blend of loyalty with love.
Fascinated with what I saw, I asked one of the founders of b.good, Jon Olinto a few questions about their b.good loyalty program.
Here is what I learned:
RS: What was the thinking behind the b.good loyalty program?
JO: Our goal has always been to create a brand that has an emotional connection with its customers. We believe that emotion (not price or discounts) is the catalyst of real loyalty. So, the goal has always been to make the b.good experience more personal for the people who care about us.
Personal for us means knowing your name and "fun fact" and enabling you to share with others and to donate to a worthwhile cause in your community.
Meanwhile, if we can identify the customers (we call them "family members") who care most about us and value this personal connection, then we can invest in them as the ambassadors who evangelize our brand. Cultivating, rewarding and loving that community of family members is the dream.
Our b.good loyalty program helps us to scale our caring.
[Note: The b.good app also has a feature where the family member can update fun facts about him or her which is what Jon is referring to in his response above]
RS: How is b.good Loyalty program different from other loyalty programs out there?
JO: It seems like most loyalty programs are channels to deliver automated discounts based on behavior. We think "rules-based discounts" create a feeling of entitlement (customers feel like they have earned their discount when they hit their 10th visit). That feeling of entitlement makes connecting emotionally really difficult. Our technology partner CaptureCode was able to deliver exactly what I was imagining in our loyalty and engagement platform. It seems to be showing results already.
RS: What I loved most was how you blended love into your loyalty program by making it easy to gift rewards to someone else. Tell us more about this.
JO: The idea is to make it more personal and emotional (not just about discounts) and to figure out who is truly loyal. We think that our most loyal customers are ones who are most emotionally invested. So, those are the folks who will give gifts (i.e. share and donate). If they do, we'll know who those people are and will treat them differently since they're the all-important influencers and ambassadors. This is the dream -- we will have the data, but need to work on executing through programs that cultivate and reward this core group.
To apply it in a more tangible way, i have always thought about a specific, really important segment of our customers -- Affluent Moms. What would motivate these Moms to participate in our family?
I think the answer is: Meaningful content about the local sources of our food, wholesomeness of ingredients, and our involvement in community was always the only thing that would be relevant to them. Affluent Moms do not care about the free order of fries that we'd send them every once in a while. BUT, those Moms may want to participate if it meant that their visits would generate wholesome food that they could share with their hairdresser, babysitter, cleaning lady, kid's teacher, etc. Even more, we think that they'd be really interested in sharing that food with kids in their community who need it. So, the idea is that by being a part of the b.good family, they can actually feel good about supporting our business because we make it easy for them to help others.
Our best customers possess above average income and education level. So, freebies and discounts are not going to resonate (and certainly won't make them feel good). There needs to be more. We think we have something that could help us connect more effectively. Sharing and donating means they're helping others. Making them feel better about themselves is a good thing that discounts definitely can't do
I loved the way b.good was able to blend loyalty with love.
Follow Rajesh Setty on Twitter: www.twitter.com/rajsetty