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A senior executive I once worked with spoke of the magic of his British Airways black card. Special treatment everywhere from check-in to landing. Its exactly what the Loyalty Doctor ordered. You can imagine my excitement when I got offered a black card through no special feat other than having been a loyal customer for a period of 12 months by none other than Cineworld.

There are so many ways to win a customers loyalty and what surprises me is how such few brands actually act on this much needed space given the battle for customers in todays fiercely competitive market across any vertical and any geography.

Cinemas have been looking for ways for some time now to make their offering stickier and levers have included partnerships like Orange Wednesdays (where an Orange telecoms customer could buy two tickets for the price of one) or loyalty cards such as cineworld unlimited cards which brought the magic of subscription to the cineworld books and unlimited movie viewings to cinema going audiences. It was not long after that Odeon caught on to the importance of the subscription model and also launched its own loyalty card called the Odeon Premiere card. With the Premiere card at Odeon a card holder is able to get GBP1 of credit for 10 points.

Insight: Odeon fell into what I refer to as the loyalty opaque trap and offers points to consumers which can be reclaimed for movie tickets and concessions at the cinema. Businesses should try and move towards greatest transparency and simplicity by simply having a 1:1 relationship between points and funds available for use at the business i.e. if there are 20 points available it allows the customer to buy goods and services worth GBP20.

Insight: Brands will find it challenging to compete with a customer’s attention given the deluge of direct mail and digital offers. There are few real opportunities to surprise and delight a customer and a truly differentiated ‘black card’ experience can move the customer’s loyalty dial and build in greater stickiness to the brand.

Cineworld is taking a number of the right steps in the physical world but its digital offer is very far from what a consumer may expect today. The inability for the loyalty card to be an application on the smart phone is costing the company a valuable engagement opportunity. Its systems that are lagging behind the process and product innovation. Customers start to notice that quickly. The chain has invested in 3-D screening facilities which allow them to milk customers for those undesirable ‘men in black’ type 3-D glasses and the premium to watch the movies which very often fail to impress or justify the additional cost.

Insight: Companies are looking to monitise loyalty and retention while I feel that the Cineworld model can offer value to high frequency movie watchers brands should be careful around elasticity considerations as there is only so much that customers are willing to pay for perks in the difficult economic conditions that prevail today.

Odeon is already offering discounted tickets to Apple iPhone owners through the ‘Passbook’ which is a mobile wallet. With the loyalty card going digital they may yet pull ahead of Cineworld unless some clever marketing executive at Cineworld gets their act together and recognizes the importance of the digital channel and more importantly mobile to its customers of today.

Insight: The biggest pain point for Cineworld Unlimited customers today is that if they do not have the physical card with them they are unable to have a staff member look up and verify that they are infact unlimited customers and end up paying for full price tickets. This is a recipe for attrition and should be recognised and addressed through a mobile initiative to take the cards digital.

After all do we really have the space for another card in our wallets today! Happy 2013 to all.