now + new + next: rethinking rewards in the new engagement economy
DESCRIPTION
The notion of “reward” has long been a basic and critical component of a loyalty program. But now with the rise of social channels, mobile payment, geo-location and gamification, our definition of reward is undergoing a dramatic shift, along with ideas on how frequently rewards need to be delivered to drive behavior. The challenge for brands will be how to integrate these new reward models into existing programs in a way that will maximize benefit without alienating existing members. Barry Kirk and Mary Luckey invite you to join us for this webinar and engage in a dialogue exploring new approaches that are enabling companies to significantly rethink their reward strategy in order to drive competitive differentiation and results.TRANSCRIPT
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Proprietary and Confidential © 2011 Maritz
Now + New + Next Rethinking “Rewards” in the New Engagement Economy
December 10, 2013
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Mary LuckeyDirector
Reward Strategy
Barry KirkVice President
Loyalty Strategy
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I am: •Currently running a rewards program.
•Planning to launch a program soon.
•Evaluating whether to launch a program.
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7.4
US consumers are enrolled in
loyalty programs.
Maritz Loyalty Marketing 2013 US Loyalty Report
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16%Only of consumers
redeem for rewards in US loyalty programs
Forrester 2013 State of Loyalty Programs
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Part
icip
ati
on
Time
Initial Awareness & Enrollment
Participation, but with lagging engagement levels
Disengagement
The engagement cliff
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Based on the work of Paul Lawrence and Nitin Nohriaat Harvard Business School
©2013 The Maritz Institute. All rights reserved.
The Four-Drive Model of Motivation
Driven to engage,cooperate,“fit in”to the community
Driven to “create” better self, team, organization, world
Bond
Create
Driven to acquirestuff, status,resources
Driven to defendstatus, stuff, ideas and relationships
Defend
Acquire
CHOICE
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Pendulum swing
Traditional Rewards
Virtual Rewards?
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Traditional rewards
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Traditional reward strategy
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Today we have an avalanche of data …
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People in reward programs have changed
• New Generations– By 2015, the oldest Millennials
(born after ‘77) will be 38 years old1
• More Digital Devices– Average U.S. household has 5 digital devices,
and some have 15 or more2
• Soon, More Devices than People! – Number of mobile-connected devices will soon
exceed the world’s population3
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1 Pew Research Center’s Internet and American Life Report
2 Bloomberg Tech Blog3 Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update
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People’s expectations have changed, too
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“I expect personalized experiences in all my online
environments.”
“I’m a 20-something who likes music downloads and
designer handbags … so don’t show me
housewares, sporting goods, and lawn care.”
“I want access to my rewards site on my smartphone,
tablet or laptop – depending on where I am and what I’m
doing.”
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Consumers are in the drivers seat
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Social intelligence is big data
Sentiment
VolumeVelocity
Emotion
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21Emotion
Volu
me
Affluent Women – Conversations
Maritz social intelligence study : affluent women
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Behavioral Intelligence is also big data
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We are: •Currently using big data in our reward strategy.
•Evaluating how to use big data in our reward strategy.
•What’s big data?
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Future strategy for traditional rewards
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Behavioral Intelligence Social Intelligence
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Pendulum swing
Traditional Rewards
Virtual Rewards?
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• Likes
• Shares
• Comments
• Levels
• Points
• Badges
• Trophies/Achievements
• Virtual “goods”
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Virtual rewards are non-physical goods that exist online and are earned by participants
for engagement and achievement.
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We are: •Currently using virtual rewards in our rewards mix.
•Evaluating whether to integrate virtual rewards into our rewards mix.
•Not planning to include virtual rewards in our program.
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Trans actions
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actionsInter
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• Low cost to produce
• Low cost to store
• Inexhaustible supply
• Can attach to any behavior
• Consumers and employees like them. A lot.
The upside of virtual rewards:
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IntrinsicExtrinsic
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MOTIVATION
Engaging in a behavior for its own value.
Engaging for the promise of an attached reward.
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Virtual rewards have low and exceedingly fleeting extrinsic value.
The downside:
Instead, link them to behaviors with intrinsic motivators.
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Status Quo
Status Quo
Disruption!
Disruption!
Habit
AWARENESS COMMITMENT INFLUENCE
Social Interaction – Autonomy – Mastery
Effort – Risk - Reward- +
RitualRitual
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5 best uses for virtual rewards:
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1. To show progress toward a goal
2. To acknowledge mastery
3. To indicate social connection/status
4. To enable online personalization
5. As a proxy for a tangible reward
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2X Participation doubled over previous year
EE+ Four of 7 engagement outcomes are up significantly
Results:
115%Increase in overall recognitions submitted
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Traditional Rewards
VirtualRewards
Big Data & Strategy
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Mary LuckeyDirector
Reward Strategy
Barry KirkVice President
Loyalty Strategy
Questions?
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Thank You
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