Do third-party rewards dilute the branding message and relationship program participants have with marketers? Direct Newsline spoke with Jill Goldworn, president and co-founder of rewards and incentives provider TheFirstClub about the challenges and opportunities available to marketers seeking to broaden their reward program offerings.
Direct Newsline: You run a company that offers ancillary premiums for your clients’ rewards programs. Is there a risk of diluting the brand by offering tangentially related rewards?
Goldworn: Consumers want to be loyal. They wouldn’t join an average of 14 programs if they didn’t have the intention. But they don’t necessarily have the opportunity to redeem points for anything useful. Airlines [for example] have had to come up with alternative methods to engage their consumers and steal redemptions in order to recognize deferred revenue. They have to carry points on their books as a liability. They want people to burn orphan miles so they can recognize revenue.
Direct Newsline: But do your offerings – digital awards such as e-books and music – really reinforce the relationship the consumer has with the brand?
Goldworn: Consumers are clever. They know when a brand is making money off their back. Brands need to offer them something that isn’t just a discount on their own profit line. Digital content provides meaningful awards in areas of their life. Airlines can offer e-books or games downloadable right when the customer is standing in the terminal.
Direct Newsline: What does an unused cache of points or miles indicate? Is it really a bad thing, as long as the participant continues to rack up the miles?
Goldworn: Customers redeeming their points spend seven times more than those that don’t redeem. In the current economic environment customers need empowerment to choose rewards that are relevant in their life.
Direct Newsline: What impact has new technology had on the ability to build relationships?
Goldworn: We have only just begun to touch the surface of what is possible with mobile devices, in terms of pushing offers in the way they receive them. Instead of just marketing to customers whenever they have a sale going, brands can now determine to a level of detail where those customers’ interests lie. And being able to market offers that might increase lift engages customers in ways that are meaningful. Rather than sending a blast to entire databases saying that flights to San Diego are available, if they know you love snowboarding, they can offer a “flight to the powder”, touting the best snowboarding of the year. That’s engagement in a way we have never seen before.
Direct Newsline: Your company has a global reach. What unique challenges does you face?
Goldworn: In China, piracy is huge and digital content doesn’t have the same value proposition. In the Middle East, we have to be careful about content and make sure it’s appropriate for the marketplace. We screen for mature content and language. In video games and artwork, modesty issues have to be taken into consideration. [To help with this] We source content in local markets. In Turkey, 80% of the music downloaded is local to that market. Our system geo-checks your IP address. The site knows where you are and filters that content based on that.
