We discussed consumer loyalty with Roberto Muñoz, Head of Travel at Puntos Colombia. In this insightful interview, Muñoz shares ideas and learnings about loyalty programs.
By guest contributor Alejandra Velazquez
Consumer Loyalty: Can’t Buy Me Love
Customer Loyalty Reward Programs have become a necessity in this fast-paced world of marketing. Thanks to e-commerce, consumers have a thousand different choices at arm’s length, each claiming to be better than any. But the only way for consumers to marry your brand is by offering them something greater. Something beyond just added value, more significant than the menial transaction of purchasing a product. A prize for choosing well.
Roberto Muñoz knows how to keep consumers engaged and coming back. He is the former strategist for Club Premier, Aeromexico’s loyalty program. It was so successful it became a company of its own. Today he’s the Head of Travel and Banks for Puntos Colombia, an ambitious nationwide implementation whose motto is granting you points “for living.” It’s an alliance of dozens of restaurants, banks, gas stations, clothing and apparel stores, and lifestyle companies.
PC effectively lets users accumulate benefits by purchasing virtually anything with either an affiliated card, or any card at the right place. Joining takes a simple online registration, and the points are redeemable as cash. Simply put, it’s a powerhouse venture, with the power to engage and captivate an entire country. “Getting benefits and rewards for everyday activities is the single most important thing to unify frequent customers with newcomers and infrequent users,” says Muñoz. In this article, he shares a few of his insights and experience with Portada.
Getting benefits and rewards for everyday activities is the single most important thing to unify frequent consumers with newcomers and infrequent users.
From Frequent Flyers to Frequent Buyers: How to Make Consumer Loyalty Programs More Inclusive
One of the barriers of loyalty programs is that people often consider them to be an elite benefit for privileged customers. They come off as unattainable. Consumers feel like they’ll need to travel once a week in exchange for a free local flight. The benefits seem like they might be a long way down the road, and not worth working for. So Roberto Muñoz had to figure out a way of making all consumers know not only seasoned millionaires get rewards. “Loyalty programs such as Club Premier used to be focused on elite 40-50 y.o. consumers with spending power,” says Muñoz. “The type design was a fancy-looking cursive and everything was designed to look exclusive. However, the younger audiences never felt a connection with the brand. They felt like the program was not meant for them. We had to develop a rebranding without losing the elite feeling but inclusive for lower-profile, younger audiences.”
For Club Premier, the key was rewarding not only frequent flyers, but also frequent buyers. Muñoz explains: “We thought, how do we incorporate a travel rewards program into people’s daily lives? By offering them a very accessible credit card without minimum balance or positive credit history requirements. Users get points every time they purchase anything with it. With that execution, we went over 300% card affiliations and incorporated many new clients into the airline.” But it’s not just about the card, it’s also about the places willing to offer something in return. Just like Puntos Colombia and its partnerships, it’s important to find the right allies for your program. For example, bookstore Gandhi is one of Club Premier’s greatest allies, offering premier points just by purchasing books.
Latam: The Market of Immediate Rewards
Puntos Colombia offers points you can use as cash, just like BBVA does with its credit cards. Many users redeem their benefits just as soon as they’ve gathered enough to purchase anything. But why won’t people wait until they have enough points for something much bigger? The answer lies in the cultural differences between the U.S. and Latin American markets. Muñoz explains: “We’ve done much research on the subject of savings culture. The U.S. market is really mature in terms of loyalty. Customers are very aware that the goal is traveling for free by accumulating miles. They see the big picture and understand the value of saving. However, the Latam market doesn’t share the same mindset. They want to know what prize or reward they’ll be getting, and they want it immediately, by tomorrow.”
The U.S. market is really mature in terms of loyalty. […] However, the Latam market doesn’t share the same mindset. They want to know what reward they’ll be getting, and they want it immediately.
According to Roberto Muñoz, when people get as little as 200 points, they immediately try to use them on a quick run to the convenience store. Once again, this responds to the fact that the Colombian market is—or was—used to seeing consumer loyalty benefits as something unattainable. They’re not used to the rush of receiving incentives. So, they become eager to spend whatever they get, whenever they get it. “In Puntos Colombia, I learned the Colombian market doesn’t even know banks and retail stores also have loyalty programs, they think it’s just for airlines,” says Muñoz. Only time and effective implementation can contribute to getting consumers more used to the exchange of benefits.
Experiences: The Future of Consumer Loyalty Rewards
Not everything is about points for cash or free flights. On the other side of the Latam coin, mature markets have become jaded. High-profile consumers with spending power have little or nothing to gain from a the occasional freebie. So, what do you offer someone who has everything? Many consumers have been earning and accumulating rewards for decades. Is there room for innovation? Muñoz comments: “We discovered many clients had a common issue: they had too many points and didn’t know what to do with them anymore. It’s like “I travel so much, I couldn’t travel any more”. So we started offering them something they didn’t have: exciting new experiences.” According to Roberto Muñoz, offering experiences as rewards is a very underdeveloped area of consumer loyalty programs. The field is ripe for exploration.
Muñoz developed some of the first experiences for Club Premier some years ago. “We planned an exclusive trip to Vegas in a private jet for clients. There was an Elvis impersonator and karaoke on board. They had a limo waiting for them at the airport with Moët and other drinks. There was a special welcome dinner at the hotel. High-profile customers look for differentiating experiences, and this really added value for them and the program.”
We started offering them something they didn’t have: exciting new experiences.
But are experiences limited to high-end consumers, or can regular users also participate for fewer points? Is there a way to include and rank users at the same time? Now there is. “At the beginning, they were focused on a very, very exclusive target,” comments Muñoz. “Now they’re more massive. I classify experiences into micro and macro. Users can exchange fewer points for a day at the spa, or dinner planned especially for them by a chef.”
Roberto Muñoz’s Best and Not-so-Great Loyalty Strategies
Like in anyone’s career, not everything has been smooth sailing for Roberto Muñoz. Here are a couple examples of his most and least successful strategies. It’s always good to remember the greatest learnings come from seemingly terrible mistakes. In Roberto’s words:
“Our most successful strategy has been letting users complete their points with actual money. It’s one of the best new options on the market. That way, customers don’t have to wait until they accumulate all necessary points for the reward, they can just pay the difference in cash. Maybe you only have half the points and you can pay to complete the other half and collect the reward.”
And the least successful?
“Our least successful strategy has been trying to push the wrong routes onto the wrong target. We released “fly to Europa” campaigns because it was aspirational and exciting. But many customers that didn’t fit the profile to go to Europe also received the ads and the effect was very negative. We had comments like, “how can you people offer me a trip to Europa if you gave me a credit card with a 5,000 pesos limit?”. It was one of our worst moments. We learned so much about segmentation strategies and cross-marketing with the bank. They should’ve let us know whose profile wasn’t right for the offer. This was about two years ago.”
Roberto Munoz, Head of Travel at Puntos Colombia, will be one of the dozens of brand marketing innovators present at Portada Miami on June 4, 2020. If you are interested in participating in Portada Miami and/or in Portada’s networking and knowledge-sharing platform with brand marketers please contact us here.