Think global, act local

Imagine opening up an email from your favourite hotel group 24 hours before you and your partner leave for a stay in one of their new hotels in Asia.  Past data has shown them that you love sushi, so the email provides a coupon for a new sushi bar inside the hotel along with 3 customer reviews and a link through to the concierge to reserve a table. You click on the link.

The email also includes a local map to get you from the hotel to the conference you are attending, and lists the address of your partner's favourite retail store in the vicinity, with an invite to an exclusive preview shopping event.

As consumers ourselves, we can all see the value of this type of experience. By leveraging more locally relevant content, brands can increase member participation in loyalty programmes, brand usage and long-term value. This is particularly true for markets with multiple cultures and languages, such as Asia, where a singular global approach can be not only challenging, but less effective.

However, implementing locally relevant loyalty programmes is not without its challenges. P&L ownership along with the ability and expertise to successfully roll-out a programme locally are important considerations.

Local relevance - a key differentiation strategy

In practice the majority of global brands have to deal with these issues on a daily basis, but how critical is it to apply local relevance to create a competitive advantage and drive customer loyalty?

At a global level, loyalty programmes are often very well defined but often lack a local focus.  If any attempt at localisation is to be successful then organisations initially need to understand customers' expectations.  For example, in China consumers prefer immediate and tangible rewards, such as cashback or free gifts, rather than reward points which are attractive in the U.S. and Europe.  In the Middle East rewards are built around travel and value added benefits - and customers will proactively look for a card that offers a choice of rewards beyond their core service.  Relevancy can therefore be increased by focusing on specific cultural and buying behaviours and localising features such as earn and burn limits.

Furthermore, other important considerations are language, tone of voice, presentation, look and feel - all of which make communications personal and relevant. In addition there may be global loyalty expertise centrally, but insufficient skills in territory to support the implementation of a locally adapted programme. 

Where programmes can be localised, it is important that the local team also has the responsibility for its commercial success.  When a local market has to continually go back to headquarters for marketing dollars or decisions on redemption, this can delay activities and thus impede success.  People making local decisions need local accountability so they can act quickly and appropriately.

Conversely, there are many aspects of a programmes infrastructure that can be globalised to achieve both cost efficiency and increased value. These include loyalty expertise, programme brand control, systems, procedures/processes and relevant partnerships.  Programme branding is usually best controlled centrally so the local customer benefits from the strength of a globally positioned programme even if its supporting messages are locally targeted.  The ultimate goal is to have a locally relevant programme on a globally efficient structure.

Mirroring repeatable best practices

When looking for best practices upon which to model your global and local loyalty strategy, airlines are a good place to turn as they tend to manage multi-regional programmes well. Their core objective is to operate a globally consistent programme design on centralised infrastructure to minimise costs, whilst at the same time allowing local flexibility in certain rules.  For example airline points earn and redemption rates so the programme can be tailored to meet local market economic conditions and competitive context.

Some strong global brands from other sectors have also been able to establish a strong value proposition that translates effortlessly into all markets.  American Express Rewards have achieved this. This mature brand is well known worldwide, is driven centrally and is managed by experienced loyalty experts; yet they use local relevance across their proposition, in promotions, communications and rewards.  In fact American Express Rewards has recently been ranked as the Lifetime Value Leader by loyalty peers, and also voted as the programme consumers like best[1]. The personalisation and relevance that American Express delivers in countries across the globe has been a key to their success.  

Hotel groups, on the other hand, can find localisation a greater challenge due to their scale and number of local considerations.  Many global hotel groups are strong in localising communication, but find it challenging when trying to localise the core structure of their programmes.  However, localisation also offers tremendous opportunities for this sector as they invariably have the resources to help brands understand the unique local behaviours and act on them relevantly.  For instance, one worldwide luxury hotel group offers its Asian loyalty programme members a customer service line in Mandarin and an in-language enrollment page online for its Chinese customers.

'Think global, act local'

Ultimately, local relevance can maximise a programme's value and effectiveness, while globalisation can maximise its efficiency.   The key is to challenge your programme.  How can it be adapted to be more locally relevant to drive increased customer value, whilst leveraging the opportunities to maximise efficiencies offered through programme centralisation?