We came up with the concept that we think of as loyalty because consumers became tribal, and loyalty became synonymous with loyalty. That turned out to be a very, very good thing for loyalty programs, and loyalty programs are some of the most success businesses have ever seen.
Our publication, Business Insider’s 30 Under 30, which has recognized more than 1,000 promising and innovative young people in more than 20 countries, has only given out one-thousandth of the awards, so there’s been a tremendous amount of response. It turned out, however, that some of the responses were being very disingenuous in how they’re presenting their companies.
It’s not as simple as everyone is just being altruistic. The responses have tended to be running companies like Uber, Lyft, Airbnb and Uber, Lyft, Airbnb and Slack, which have the highest stock price. They tend to have an increasingly large problem in terms of valuation, and they’re going to try to suck us in even more by offering sweet incentives, which is exactly what they do.
And it’s also important to realize that people are also becoming more savvy to the company. As an economic model, the original focus for digital loyalty programs on giving away discounts to consumers and getting their emails has just not paid off as much as it used to. The traffic has just not changed enough, and most of the traffic that consumers care about is not low-quality traffic.
“I think they’re hoping that if you give us a lot of money and nothing else, it’s a giveaway, and people will get bored and go away because they’re not getting anything better than that, and there are already some companies with low-quality content that are left with nothing. And to pay for nothing with such a competitive market, I think you have to pay up somehow. I think it’s a sad thing, the price points that they’re hoping to get.” — Marina Koujık, 28, CEO and founder, Limelife
It’s going to get very difficult for brands to compete, so they are more and more willing to compromise. It used to be that everyone gave this enormous discount and took away no other benefit, but the point of those programs are people working the entire journey with a brand. They’re not just one-on-one with one person.
I think it’s really sad. Customers are getting disappointed every day, but it’s always much worse in a world where incentives are always increasing. Even if you have the strongest brand name, customers will always look for more value. Even just getting more marketing tools to be a part of the entire customer journey doesn’t guarantee better results. I think sometimes it does lead to loyalty programs becoming — on an aggregated basis — important for brands, but I do think we have to respect the fact that consumers care about the total customer journey.
Being a customer also means being an influencer, so brands are becoming increasingly interested in media and influencers — even if those influencers are in the same industry as their target customers. But it’s the virtual customer journey they care about. The well-targeted customer is not only the high-value customer; the average high-value customer is also the high-value influencer. So rather than just encouraging content, companies are becoming even more focused on how they can amplify it.
The beauty of the digital age is that it makes it pretty easy for brands to be able to get into whatever industry they want to, and the best news is that people are more open to collaboration, so we’re not expecting things to end up that way because it’s good for the industry. What I think we need is the transparency. Let’s call it out that people should feel like there’s no downside for companies. There are always new consumers that enter the market. If there was just one reason, then there could be a reaction. I think we’re probably a bit spoiled by the fact that we feel like we’re getting free stuff that other companies pay for.
We decided to put a spotlight on the people building the loyalty programs. Companies recognize that loyalty works, so we’re trying to shine a light on the younger generation at companies who are trying to take advantage of the relationship that they have with their customers.