Switch incentives will be driven by hyper personalisation
We caught up with Mark Eglington, Director of Client Services at Simply Thank You to discuss the changing trends in loyalty and switch incentives.
“The Financial Conduct Authority introduced new pricing regulations on 1 January 2022, which mean that insurers have to offer renewing customers a price that is no higher than they would pay as a new customer. It’s no doubt a strange new world for the sector, which has developed a reputation for preferring to incentivise the acquisition of new customers, and an adjustment for consumers too, who are accustomed to switching.
Last year, six million customers switched to a new supplier, with half a million customers on average moving to a new supplier each month. In energy alone, over 370,000 customers moved in one month in 2021.
It’s a unique model of business where companies vie for consumer attention. There are also two roles to play – retainer – keeping hold of your loyal customers – and attraction – winning business over rivals.
At Simply Thank You, I work with businesses who are increasing their spend significantly on incentives and incentive technology and using the onecode and the trend I have seen across sectors as diverse as banking, finance, insurance, media and healthcare is that incentive use is starting much sooner in the customer journey, that the variety of incentives has changed and speed of delivery is now critical.
Incentive use is being ‘baked in’ to business
The leading global businesses we work with have a phrase we hear time and time again – ‘baked in.’ Loyalty has to be baked into the whole offering. Great service has to be baked into every experience. Positive brand perception has to be baked in, from the start. Challenger brands bite at the toes of the leading giants, and that’s why incentives have to be instant, interesting and attainable.
Businesses now have to strike the balance of attraction and retention and the incentive programmes have to do it all.In short, where incentives were once the ‘cherry on top’, they are now more like the flour, eggs and milk of the mix of customer experience, starting much sooner at the top of the funnel of the customer journey.
There are new customer rewards and incentives following an activation. Referral incentives. Activity incentives. Loyalty and gamification mechanisms that try and drive out ‘brand fatigue’. Let’s not forget employees too – a critical part of any brand success lives or dies on the engagement and interest in your teams.
Incentives are getting diverse and hyper-personalised
For 2022 and beyond, we believe that incentives will have to be bolder than before. In banking, Virgin Money and Monzo gained the most current account customers during the first three months of 2021, according to the latest data from Pay UK, with Virgin Money giving away a 15-bottle case of wine worth £180 for a switch, while HSBC attracted over 23,000 new customers with a £125 switching bonus. Barclays use a full reward system to earn British Airways flights.
The tactics being used are all about reach and appeal. Our own clients are getting amazing results in acquisition and retention with the onecode by not being prescriptive and by personalising the reward marketing and the redemption, and of course, it’s all instant. Our latest offering is the onecode, and what this offers is the ability to pitch a switch offer in a totally new way.
I always say if someone has an idea of doing a certain incentive reward – go on Twitter and see what people are saying about it. People really are not thrilled with prescriptive rewards. They just aren’t reflective of the personalisation they expect.
Incentive marketing is becoming refined and data-led
That’s why with the onecode it works so well for brands. On one level, you can do quite basic marketing, so instead of ‘Get a £50 Department Store Gift Card’, it becomes an individual marketing campaign. In January it could showcase get fit equipment and the associated sports suppliers, in February – well it’s a month of love – so it could be all about wines and chocolates and luxury spa breaks. It’s the same card, the digital onecode that has a value that can be exchanged on gift cards, digital gift cards, physical products – but it’s being marketed in a totally different way each time.
You can then take that up a notch and use personalised data to customise a log into a platform for each customer, so it greets them by name, and also shows them items that will resonate with them. It could tie into your own campaigns, or what you know about them.
Moved house? Super – you can show them homewares. New baby? You guessed it – toys. There are boundless possibilities.
This is the future of switch incentives – complete, hyper-personalisation. We are very excited to see more brands really excel at the delivery and reap their own rewards from taking a new look at switch incentives.”