Australian Loyalty Programs

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Australian Loyalty Programs-Trends

Current trends in the Australian loyalty programs space include integration with digital payment systems, socially responsible brands, customer engagement through artificial intelligence, personalization of consumer products, and increase of partnerships.

CURRENT TRENDS IN THE AUSTRALIAN LOYALTY PROGRAM SPACE

1. INTEGRATION WITH DIGITAL PAYMENT SYSTEMS
WHY IT IS TRENDING
2. SOCIALLY RESPONSIBLE BRANDS
WHY IT IS TRENDING
  • The emergence of socially responsible brands is trending because it helps build a trusting relationship between a brand and consumers, leading to positive social change, as well as customer loyalty.
3. CUSTOMER ENGAGEMENT THROUGH AI
WHY IT IS TRENDING
4. PERSONALIZATION OF CONSUMER PRODUCTS
  • According to Marketing Land, clients desire to feel unique to the brand in which they express their loyalty to.
  • Personalization refers to moving from a broad target audience to a single one that is very specific and supported by credible data.
  • One brand-new method is to guarantee that the information is communicated to the target audience at the right time and through the correct device.
  • The active participation of customers is a crucial feature that can ensure the personalization of consumer products is successful.
WHY IT IS TRENDING
5. INCREASE OF PARTNERSHIPS
WHY IT IS TRENDING
  • The expansion of partnerships between trademarks is trending because it increases both the revenue and volume of customers for the brands involved in the merger.

Research Strategy:

Customers sign up for loyalty programs from which they can obtain benefits. The perks might include discounts, cash backs and earning of points for every dollar received. In the Australian loyalty program space, the rules do not change.
To identify the current trends in the Australian loyalty program space, we scoured through credible industry reports and blogs from publications such as Forbes, Marketing Land, Alpha Beta, and Inside Retail, among others. We also looked at companies such as Woolworths and Cole's Flybuys to get a better feel of the brands in Australia. Based on these resources, we came across some trends in the Australian loyalty program space, which include integration with digital payment systems, socially responsible brands, customer engagement through artificial intelligence, personalization of consumer products, and increase of partnerships.
We have identified these trends as currently "trending" based on its repetition as a trend across two or more reports. Next, we focused on the new features that programs are testing with customers and new ways to be successful with these programs.
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Australian Loyalty Programs-Case Studies

A case study of a new successful Australian loyalty program is Telstra's Telstra Plus and a case study of a successful overhaul of an existing program is Qantas' Frequent Flyers program. Below is an overview of the findings.

TELSTRA: TELSTRA PLUS

OVERVIEW
  • On April 2, 2019, Telstra announced its new customer reward/loyalty program Telstra Plus as part of the company's T22 strategy plan to successfully grow its 5G customer base, radically simplify products and services for customers, and improve the experience.

PROGRAM OFFERS
  • Telstra Plus allows members the opportunity to earn discounts on the newest devices and accessories, access discounted and pre-sale movie tickets, receive entertainment rewards, VIP tech support, and rewards customer loyalty.
  • For every dollar a Telstra Plus member spends on their monthly account they earn 10 points which can be used to receive discounts on new accessories and handsets."
  • Membership benefits include earning points which can be used for purchasing must-have devices, mobile devices, home entertainment, and essential accessories. Silver and Gold tier members can enjoy Stan and one month of Kayo Basic for free, $12.50 movie tickets, discounted sports tickets, and access to exclusive pre-sale concerts and art performances.

MEMBERSHIP INFORMATION
  • Telstra Plus membership is available for existing customers of the telecom company and new members who are 18 years or older. A member can join Telstra Plus by accessing the Telstra 24*7 app or by creating an online profile and selecting a customized membership plan. Membership plans fall in three categories Member, Gold, and Silver and are based on annual spend ($0-$3,000+).
  • More than 770,000 customers have enrolled and are earning points since Telstra Plus launched in April 2019.

SUCCESS METRICS
  • Telstra Plus is a huge success as a high volume of customers has enrolled (more than 770,000) in just three months after the launch of the loyalty program (April-June 2019).
  • The company was able to build its 5G network coverage in 10 new cities by successfully executing the T22 strategic plan and achieving more than 10% on the invested ROI.

WHY IT IS SUCCESSFUL
  • Telstra has been aggressively investing in its T22 strategic plan and the Telstra Plus loyalty program is a key element in raising customer enrollment and improving customer experience and retention. Telstra has made up to $3 billion in strategic investments.
  • The company has a strong existing telecom customer base of 8 million who are strong prospects for the company to grow enrollment and its 5G customer base.
  • Telstra Plus is successful and has unique features the company has bundled as part of the program. These features include $0 membership enrollment fees, hot electronic offers (phones, watches, gadgets), $12.50 discounts on movie tickets, and $1 equal value for 10 points.
  • The company has promoted the program before and after its launch through press releases, news coverage, and social media posts (Twitter, Facebook).

QANTAS FREQUENT FLYERS PROGRAM OVERHAUL

OVERVIEW
  • On June 20, 2019, Qantas announced the first major overhaul to its frequent flyer program in its 32 years existence. It will invest $25 million to improve how members are recognized and rewarded as well as how they earn and redeem points.

PROGRAM OFFERS
  • Major initiatives the company will include under the overhaul of the Frequent Flyer reward program are adding more than one million extra reward seats annually, reducing carrier charges by up to 50% on international bookings, changing the points needed for reward seats on domestic and international flights, increasing the points needed for upgrades and Classic Reward seats, and introducing Lifetime Platinum status.
  • The overhaul will not hinder the way members currently earn points, but it will change the way members can redeem points on Qantas flights. The change followed years of feedback from members, according to Mr. Joyce.

MEMBERSHIP INFORMATION
  • To enroll in Qantas' Frequent Flyer program, one has to share their personal information and residential address through an online form on the website of the airlines and pay a fee of AUD 99.50.
  • The company has reported around 13 million enrollments till date in the Frequent Flyer reward program.

SUCCESS METRICS
  • The Qantas frequent flyer program has grown from 50,000 members to almost 13 million members recently with better redemption options from 300 partners and offers members a better digital experience.
  • On July 2019, Qantas' Frequent Flyer program was also ranked in the top list of the global survey by Ideaworks based on frequent flyer revenue generation as the company achieved a revenue per network passenger of US$37.51 (AU$53.94).
  • Loyalty is an important element of Qantas' business and "returns more on capital than any other part of the company. In the first half of 2018-19, Qantas Loyalty reported underlying earnings before interest and tax (EBIT) of $175 million, up 4.2% year-on-year and a margin of 21.6% on sales."
  • By 2022, Qantas Loyalty is estimated to be the most profitable and biggest earner for the airline. Through the changes and updates to the program, the company is targeting an EBIT of $500 million to $600 million.
  • By Skytrax Air lie quality scoring, Qantas in the 2019 customer rating received 6/10 score with 5-star reviews and positive comments given by fliers on the Frequent Flyer program of the airlines who quoted, "Being a Platinum Frequent Flyer has its perks with a personal meet and greet"

WHY IT IS SUCCESSFUL
  • The company has promoted the program before and after its launch through press releases, news coverage, and social media posts (Twitter 484,000 followers, Facebook 1.4 million followers).
  • Qantas has been investing aggressively($25 million) in this loyalty program and overhaul to make it the best offering of the company and in turn add to its loyalty revenue.
  • The high brand presence and existing customer base have given the overhaul a strong push to increase customer satisfaction and add to the redemption revenue.

Research Strategy

To identify case studies on new successful Australian loyalty programs or overhauls of existing programs, we researched various credible Australian customer loyalty reports such as Rewardo, the For Love or Money 2019 report, and others. Additionally, we searched through related news articles and survey reports from Consumer Research, Business Insider, Sydney Times, Wise Marketer, and others.

Through the search, we were able to identify the above-listed two case studies which were launched in April and June 2019 by the respective companies and were successful in attaining the overall objective behind the initiative by generating a huge membership numbers (770,000 and 13 million respectively), generating loyalty revenues for the company, and other brand loyalty and customer rating scores.

Each company's official website, annual report, financial information, reward section, press releases, news articles were thoroughly searched to gather in-depth details on the company's loyalty program/overhaul of the existing program along with other key details related to its membership, success, and offers.
Sources
Sources