Monday, 22 October 2012

Loyalty

I've been hearing people asking for Loyalty schemes for ticketing systems for years. I'd never been able to work out what they'd do with one once they got one.

I think the problem was that I immediately translated loyalty schemes into the one I knew best - supermarket schemes. I'm still not really sure how they're supposed to do any good, given that there's nothing to stop you from entrolling into all the schemes collecting points for all the supermarkets at once, but that's not the point. The basic model I had in mind was "collect points; spend points", as if the loyalty point were some kind of second rate currency, and the chances are the shows you could buy tickets for for points would be the slow-selling Wednesday matinees, and not the in-demand Friday evenings.

Keeping a points balance total is a pain. You get all sorts of nasty edge-cases, what if someone buys a ticket, claims the points, spends the points on a different ticket, and then gets a refund on the first one? People love hacking special offers and finding the loopholes; the famous hoover flights fiasco a case in point.

And whilst this model clearly works for some industries, I couldn't work out how it would drive sales to theatres and venues and other live events. Why would you buy a ticket to something you didn't really care about seeing, in order to get points, to spend on something else that you do want to see? You'd buy the tickets for the things you wanted, and whilst points might be nice, they're not going to make you see an extra show, or choose to see a show you don't like so much at venue A over a show you prefer at venue B. Supermarket loyalty points work when you're selling commodities, and when it's just as easy to pop to the shop down the road instead; as with all commodities, all that matters is the price, and the points get factored into that.

I thought this was how Air Miles worked too - and to some extent they do - until Andrew mentioned to me why he cared about Air Miles. It's not because you might spend them on a free flight someday, it's because if you collect enough of them, you start to get "Silver"status and free upgrades and access to the lounge and the perks and so on. I guess I never took enough flights to find out =)

And suddenly this makes sense, in the context of selling tickets for live events. There's no need to keep a balance, and invent ways to "spend" points. We just need to run a calculation, say, every night, and look at your purchase history for, say, the last 6 months. And if you've done enough stuff with the venue in that time-frame, then we'll give you a membership level for free. It might be different to the normal membership that we sell; it might be the same (though I think it should be different, see below). It could give priority booking periods, or money off tickets. It might just come with a special hat. It doesn't matter; if you loyally attend lots of shows, you're given something... and if you stop going, it gets taken away again.

And that's where I can see it driving sales. You email someone and say "come and see one more show before the end of the month, and you'll get a free membership for 6 months", and what you're really saying is "you're the kind of person who goes to the theatre a lot and supports the arts, and that's a good thing". And I can totally imagine someone making the effort to see an extra show, because that's them making a statement about themselves and their values. You email someone and say "your free membership will lapse unless you see one more show before the end of the month", and you're really saying "You've stopped being the kind of person who goes to the theatre a lot. What happened?", and they'll come back to prove you wrong. Instead of the supplier trying to buy the customer's loyalty with nectar points, the perk becomes a status symbol that the customer can't directly buy at all - they have to PROVE your loyalty to the theatre before being allowed. And at that point it becomes something people take pride in and work for and keep up; the opposite of all those unclaimed air miles. And the threat of having that status taken away again should work brilliantly to motivate people to take a chance and see that extra show.

TLDR version:

All items purchased are assigned a loyalty value (configurable calculation based on ticket price)
Every night, the loyalty values of purchase for the last $daterange are added up.
Accounts "near" the threshold are emailed telling them they're nearly there.
Accounts over the threshold have a membership status automatically applied to their account for $daterange2
Accounts qualified once and remain below the threshold for $daterange2 lose the benefit, and will get the normal "your membership is about to expire" reminders.

4 comments:

  1. ADDENDUM: This is how the last night of the proms works, right? You buy tickets to other proms to prove your loyalty, and if you are a loyal prom-goer, you are permitted to buy tickets to the last night, otherwise not.

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  2. That's a neat idea.

    At my local (association) football club they run a points scheme where you trade in your points for stuff which money can't buy - meeting the team or whatever. I guess that's somewhere between the free ticket and the special hat.

    What is unique/unusual about their scheme is that you can earn points by watching away games on TV by entering the code which is given on screen. In theatre terms maybe you could earn points at the bar or in the cafe.

    http://www.philadelphiaunion.com/tickets/season-ticket-cards-loyalty-program

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  3. Football clubs I think don't need to do very much to encourage loyalty - I think it comes with the territory. The equivalent status there is "season ticket holder", which is your baseline "are you a proper fan or not", and comes with a completely different set of problems (the requirements I got for implementing season tickets for one club made moving seat look like moving house - you had to set up a chain of people who wanted to move, and all complete on the same day).

    Another of their requirements was to band matches into classes - so if they were playing Arsenal it would be an "A" match, and if they were playing Reading it would be a "B" match, and you couldn't just go in to buy a ticket for an "A" match, you'd have to buy at least two "B" tickets at the same time, as otherwise all the "A"s would sell out in an instant; which again is much more like last night of the proms. And they'd check attendance; if you bought but didn't show up for the B matches, they wouldn't let you in to the A match.

    But "perks that money can't buy" is a powerful incentive. Backstage tours, perhaps?

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