Mando-Connect’s latest research conducted with YouGov provides yet more evidence that Rewards are the number 1 factor for Brits to join Loyalty programmes. 60% are motivated by discounts and offers with 28% looking out for partner offers.

The results demonstrate that the impact of loyalty programmes are stronger than ever. They help brands engage in a completely unique way and cut through the noise of a crowded advertising and marketing landscape. Once a programme is in place, brand appeal among users increases. Then, as users needs naturally evolve, the challenge is to keep innovating in the right direction and keep pace with these changing requirements as they happen.

For the full whitepaper, please head to the Mando-Connect website 

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McDonald’s has signed a deal with The Smiley Company, master licensee for the Rubik’s Cube, for the iconic 1980s puzzle toy to feature in McDonald’s Happy Meal offers in multiple countries.

In a deal brokered by global customer engagement agency The Marketing Store, which has worked closely with McDonald’s for many years, the multi-territory promotion will appear in McDonald’s restaurants across various European countries, the Middle East, Africa and North America.

The campaign launches in France this month (July 2018) and will then roll out across other territories from August through November 2018, including Italy, Spain, Austria, UAE and Canada, amongst many others.

It is not clear yet whether it will be running in the UK, where restrictions are in force on the use of toys and licensed characters to promote food and drink products. Promomarketing has asked McDonald’s for clarification on this point.

Unusually, the Happy Meal Box will be transformed from its traditional tented ‘house’ design into a Cube shape to mirror the Rubik’s Cube for the duration of the campaign.

Children enjoying a Happy Meal at participating McDonald’s will have a choice of four different bespoke Rubik’s Cube toys; including square 2×2 cubes and rectangular 3×2 cubes as well as rounded versions of these, with a total of 12 different toys to choose from.

The unique promotion will also feature a product mash-up between Rubik’s and a major Hollywood animation film studio’s properties appearing on the toys alongside the iconic Rubik’s Cube colours and trademark twist and turn mechanism.

Nicolas Loufrani, CEO at The Smiley Company, says: “We have worked closely with The Marketing Store and the whole team at McDonald’s and are really pleased with the innovative and high quality content of this campaign. From the robust mini Cubes and the unique Rubik’s Cube shaped Happy Meal box to the TV ads and bespoke games created for the Happy Studio app, every aspect of the promotion has been crafted to perfectly leverage the Rubik’s brand mission of encouraging children to PLAY SMART and further our goal of bringing intelligent play to kids of all ages.”

The Smiley Company will be leveraging the partnership with McDonald’s to drive the ongoing Rubik’s brand extension program and “to realise our plans to take the brand to new consumers, with particular emphasis on engaging the brand with children aged from 3-8 years old, as our brand mission continues to focus on creating new toy partnerships for this age group,” Loufrani adds.

To support the promotion’s launch in the markets where it will be appearing, there will be a 360° marketing campaign, supported by a TV advertising featuring the Happy Meal mascot ‘HAPPY’ playing with a Rubik’s Cube in a 26 and 13 second spots. There will also be series of ‘How to Solve’ short video tutorials launched on social channels to help kids solve the bespoke Happy Meal Rubik’s Cubes, and a McDonald’s Happy Studio app takeover.

Additional marketing materials will include in-store POS, branded balloons, colouring sheets, wall stickers and window decals which will help amplify the Rubik’s brand identity throughout the promotion.

The launch of the activation in France is being supported with an influencers’ campaign while other national markets will also see major marketing initiatives.

The Smiley Company is a brand licensing company which originated in France and which holds the intellectual property rights to the classic smiley face symbol face symbol in more than 100 countries (although not the United States, where the symbol originated).

In addition to the smiley symbol, it also holds licensing rights for Rubik’s Cube and related properties, and recently launched a major brand extension program for Rubik’s. This draws on Rubik’s iconicity, rich heritage and archive and the resurgence of retro gaming and geek culture, while utilising Smiley’s own industry leading design studio and world class distribution channels.

The company says global demand for Rubik’s is now at the highest levels since its launch in 1980 and a number of industry leading partners have already signed up across categories including apparel, back to school, gift, live events and attractions, partworks, promotions and publishing.

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There is a growing trend for brands to create their own loyalty programmes, rather than sign up to coalition loyalty schemes, says Belinda Clark of RAPP UK

When Sainsbury’s announced it was buying Nectar from Aimia earlier this year, we all nodded knowingly. That made sense. As the retailer that issues the most Nectar points and provides the most rewards¹, it’s not surprising they saw value in owning the coalition, rather than merely being a part of it.

But when news broke that Avios.com would close on May 20^th, with Avios currency transferring across to the Executive Club², it signalled a clear change. And, of course, we can’t ignore the imminent merger between Sainsbury’s and Asda and what that means for its loyalty strategy – but we do know that there is a growing trend by big brands away from third-party-owned coalition programmes and towards brand-owned programmes.

So if brands (especially big brands) are no longer buying into coalition-driven loyalty, that raises the question: is there any future for coalition loyalty programmes?

Recent evidence would suggest, no.

Why? Because coalition programmes are not designed to drive loyalty to any one brand. They drive loyalty to the coalition at the expense of individual brand loyalty. Yet this individual loyalty is ultimately what brands are after, as it offers the best long-term value.

Coalition programmes have instead leant on the marketing potential from their massive customer databases. But many brands have found this access to be limited, too – limits that could deepen when GDPR legislation comes into force on May 25th – less than two weeks from now. While aggregate data, insight and trends are useful to a point, customers are demanding more than being treated in aggregate. And brands have responded by creating their own customer databases, which are arguably bigger and better than those available from a coalition.

Coalitions undoubtedly benefit the consumers who are members by allowing them to earn and burn points from just one programme. But as the value of a point begins to decline³, so too does a coalition’s popularity. Without value, the simplicity of earning and burning in one program simply loses its sparkle.

So what lessons can brands learn from coalitions?

When done well, brand-owned programmes can achieve many of the benefits of a coalition… and more. Yes, it will require investment, or a coalition purchase such as Sainsbury’s and British Airways have opted for. But this investment is in more than just a programme; it’s in your customers, your company’s data collection capabilities and your competitive advantage.

There are some simple tips for those running loyalty programmes:

OPTIMISE THE VALUE EXCHANGE
Coalitions were known for their no-brainer value-add. Over time this became a reason for customers to share their data; but while the value-add has eroded over time, the principle of offering a strong value exchange (namely, rewards for data) still holds true as it makes the exchange valuable for both sides.

TO REMAIN RELEVANT, ENSURE YOU REMAIN VALUABLE
For all customers, a valuable programme is one that offers something in exchange for their continued purchase. But as the point declines in value, so too does a programme’s popularity, unless it’s able to demonstrate value beyond just monetary terms. In the case of Nectar, this meant its alignment with Sainsbury’s and its ability to target their customers with personalised offers based on their purchases. Something which gave loyal Sainsbury’s customers yet another reason to shop.

SIMPLICITY, SIMPLICITY, SIMPLICITY
Coalition programmes that last get this one right every time. They offer a programme with a minimum of steps to join, participate and earn and burn. This familiarity of structure was key to their success because it meant customers knew what to expect without having to re-learn the rules every time.

But if brands are to succeed in a coalition-less world, they also need to go above and beyond this. They need to:

BE GENEROUS:
With much more than just their money – their time and people too. Because money doesn’t talk like it used to! Customers demand brands be generous with their entire offering in an effort to make them feel special and give them a reason to return again and again.

BE VALUABLE – AND MAKE PEOPLE FEEL VALUED…
To be valuable means to offer something that customers see real value in. While rational reasons like money are still core parts of this equation, to be a valuable programme means to give customers bragging rights (think myJohn Lewis…free coffee and cake anyone?). To make people feel valued, means to make the programme feel like it’s been created just for them – even if its offering is available to everyone (think Harvey Nichols’ complementary concierge service…yes please!).

DELIGHT WITH AN EXCEPTIONAL CUSTOMER EXPERIENCE…
A simple, seamless end-to-end customer experience is now expected as standard. To delight now means to make customer’s lives easier; to demonstrate shared values and to improve their experience not only with you, but with the environment and community you both live in.

The best of both worlds really is possible, as Sainsbury’s and British Airways will no doubt demonstrate in time. While coalition programmes used to make sense, they just don’t cut it in today’s world. And as Sainsbury’s and British Airways have now shown us, a new world is opening up. And that world just so happens to be owned and run by brands.

Belinda Clark is Senior Strategist at RAPP, a London-based integrated agency which is part of the Omnicom Group. Rapp works with clients including Rapp UK is based in London, working with clients including PayPal, Virgin Media, Mercedes Benz and Nestlé Waters.

Sources:

¹ Sainsbury’s buys Nectar rewards scheme from Aimia for £60m. The Financial Times. February 1, 2018 https://www.ft.com/content/584f106e-0766-11e8-9650-9c0ad2d7c5b5

² British Airways’ Avios scheme is closing down – here’s everything you need to know about your points. UK Business Insider. April 11, 2018
http://uk.businessinsider.com/british-airways-avios-frequent-flyer-scheme-closing-points-2018-4?r=US&IR=T

³Sainsbury’s Nectar point cut angers customers. The Guardian. 10^th April 2015. https://www.theguardian.com/money/2015/apr/10/sainsburys-cuts-to-nectar-points-anger-its-customers

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