Get paid to drink Pepsi (and eat Fritos)…

Pepsi is launching a PepCoin loyalty program that rewards you for buying both a single-serve beverage and a Frito-Lay snack by sending money to PayPal and Venmo accounts. If you scan enough codes on bottles and bags, you’ll receive a little bit of cash. You’ll have to earn $2 before it goes to your account, but this is real spending money.

How it works:

  • Buy a PepsiCo beverage and Frito-Lay snack.
  • Scan the codes on the bag and under the bottle cap with your phone.
  • Link the program to your PayPal or Venmo.
  • Once you accumulate $2, the money automatically transfers to your account with Venmo or PayPal.

It’s not a dollar for dollar point system, each transaction earns a person about 37 cents. So, like, 5.4 purchases.

Why it’s hot: Companies with multiple brands are increasingly using loyalty programs as a vehicle to sell across their portfolio and drive awareness of the many different products within it. With the exception of credit and debit cards, that apply cash back as a credit to your account, cash back incentives in the form of actual cash have yet to be tested (as far as I could tell). Truly successful loyalty programs thrive on creating engaging experiences and emotional connections with their consumers — it’ll be interesting to see whether Pepcoin will be able to establish a true connection with customers, past the initial shock and enroll stage and whether it’ll change how loyalty and rewards programs provide benefits to consumers in the future.

Sources: Engadget, Thrillist, MediaPostPYMNTS.com, Pepcoin, Pepsi press release

You can’t buy me love…but you can buy loyalty

Spending on loyalty programs is through the roof – experiencing an annual compounded growth rate of nearly 21 percent. And no wonder – returning customers spend up to 67 percent more than first-time customers.

But most loyalty programs don’t generate loyalty. One recent study found that customers of retailers that offer a loyalty program were not more loyal than customers of those that don’t. Another recent study found that only 42 percent of loyalty program members are active or engaged. While it pays to have loyal customers, you can’t simply pay customers to be loyal.

Loyalty

What if instead of paying customers to be loyal, those same customers actually paid the companies they want to be loyal to?

It’s a concept Amazon understands well. In the latest quarter, Prime membership grew by 47 percent. Prime members spend 250 percent more a year than non-members. And while standard loyalty programs tend to bleed engagement over time, Prime members actually become more engaged.

What companies like Amazon, GameStop, Sephora and Restoration Hardware understand is that there’s a difference between loyalty and love. Loyalty simply means you’ve managed to put a card in the customer’s wallet. Paid membership means you’ve secured a place in the customer’s heart. At the same time, charging a membership fee creates an onus on the part of the company to deliver value against the heightened expectations the fee creates.

Read more: Business of Fashion

Why It’s Hot
Expanded notions of loyalty in CRM can benefit both the company and consumer – a mutual value exchange that can breed longer-lasting brand love.

Cathay Pacific Airways’ Artmap Project

Cathay Pacific Airways is emailing personalized paintings as birthday gifts to its loyalty club members. Members can share their painting digitally or print a high-resolution copy.

The art piece is made by an algorithmic tool specially designed to create tailored digital paintings using each member’s travel data and flight trajectories.

Why Its Hot

The brief was for a member’s birthday greeting to drive increased loyalty amongst Marco Polo loyalty club members. But the brand understands that consumers are not loyal to programs or points: they are loyal to experiences.

Cathay Pacific is genuinely about meaningful experiences, treating travel with respect, understated elegance and being there when people need it and not when they don’t.This experience is rewarding, inspiring, and personal.

 

How Under Armour is linking fitness data with customer loyalty

Under Armour and MapMyFitness are working with sports equipment retailer Sports Authority to link workout activity with customer loyalty programs in a data play that is part of Under Armour’s efforts to become a technology company.

The companies are working together to create a new set of “challenges” on MapMyFitness, the workout-tracking app that works with phones, Jawbones, Garmins and Fitbits to track calories and workouts. Under Armour purchased MapMyFitness last year.

The 150 million people within the “Under Armour Connected Fitness” group will get a set of challenges (for example, “run 10 miles a week”), and if they complete it, they can win gift cards and points within “The League,” Sports Authority’s loyalty program.

Warren Kay, vp of advertising at Under Armour said that Sports Authority is looking for a way to invest in technology to strengthen their market position — and using Under Armour’s verified activity feed is a way to get data on those customers and marry it with the rewards program.

MapMyFitness challenges you.

Kay said Under Armour differentiates from competitors because it has opened its API and platforms to other brands and hardware manufacturers like Fitbit or Garmin — and lets its customer play across platforms — instead of creating its own hardware. Still, it requires a lot of resources, and a lot of money.

Under Armour, for example, bought nutrition- and workout-tracking leader MyFitnessPal earlier this year, plunking down $475 million for the company, and also put down $85 million for Endomondo, a social fitness network. Connected Fitness is the part of Under Armour that houses the technology to help its athletes and users: MyFitnessPal, Endomondo and MapMyFitness all live within Connected Fitness unit.

The payoff for Under Armour is partnerships like this one with Sports Authority. Active people that use fitness trackers are likely to buy apparel and footwear. And hopefully, they’ll buy yours.

Why It’s Hot

This is a really smart way for a retail brand to think smart about how to grow itself.  They are transforming the brand to own fitness in general- by providing the clothes people wear when working out along with the apps they need to track performance.  People could soon associate the brand or the apps they bought as more of a lifestyle choice than a simple tool or piece of clothing…which adds brand equity.

Amazon Continues to Up the Loyalty Game

Just announced: Amazon Prime members will get free streaming entertainment on JetBlue. The e-commerce company will let members of Amazon’s $99 annual loyalty program Prime stream its instant video service for free on their Wi-Fi enabled devices via JetBlue’s inflight Wi-Fi service. JetBlue is the only U.S. airline to offer free Wi-Fi on its planes. Called Fly-Fi for Amazon Prime, the service will give Prime members access to original Amazon shows like “Transparent,” its other streaming TV and movies, as well as the ability to rent or buy other titles on Amazon’s Instant Video store. Prime members will be able watch Amazon Instant Video from their laptops, Fire devices, iPhones, iPads and Android phones and tablets without downloading anything beforehand.

Read more here.

Why it’s hot:

Smart move for both brands. Once again, Jet Blue stands at the forefront in the airline industry. And Amazon continues to rule loyalty as they have been expanding the Prime program’s offerings in an effort to grow its membership with services such as grocery delivery, one-hour delivery in some cities, beefed up video streaming and the creation of a Bluetooth speaker called the Echo that syncs with Prime music.