Loyalty Strategy

US: Verizon launches experiential loyalty program

Just a few days ago, we heralded the launch of the Sky VIP program in the UK – the first serious foray of a robust customer loyalty initiative in the telecom space in many years. Before we could turn around, wireless carrier Verizon continued the trend with a blog post announcing their own new impressive loyalty program. Called Verizon Up, the new program layers on the experiential rewards – even promising an up-close encounter with Lady GaGa. Could the telecom sector be in the midst of a loyalty renaissance?

By Rick Ferguson

The Verizon Up program, free to join and accessible through the My Verizon mobile app, rewards Verizon customers with one credit for every $300 spent on their wireless bills. Rather than offering a currency accrual program, however, Verizon has designed the program to reward customers every time they earn – one credit equals one reward, which can be redeemed from a roster of six rewards renewed every month. Rewards range from everyday partner rewards to VIP experiences, including:

Everyday Rewards:  Free services and discounts from brands including Amazon, Apple Music, JetBlue, and HBO Now, with new partners added monthly. Sample Everyday Rewards include:

  • Apple Music: Four months free for new subscribers; existing subscribers receive an extra month
  • JetBlue: 20 percent off an R/T flight and 1,000 TrueBlue loyalty points
  • HBO NOW: first three months free of a subscription

Verizon Rewards:  Members can bank up to $10 towards their next Verizon device purchase, up to $240 total off device purchases, discounts on accessories and bonus data.

Super Tickets:  Access to events in sports, music and entertainment such as NFL and Broadway shows.

Dream Tickets:  Experiential rewards such as tickets to NFL events including Kickoff in New England, 2018 Pro Bowl and Super Bowl LII.

The Up program will also feature surprise-and-delight rewards, as well as a special program launch promotion tied to Lady GaGa’s upcoming US concert tour. Verizon is creating a special section of seats just for Up members, as well as a footprint outside the stadium during Gaga’s performances where Up customers can check in to receive credentials and gain access to a VIP lounge before the concert.

Money quote from Verizon spokesperson Sanette Chao on the impetus behind the Up launch:

“Over the past year Verizon hit the streets to hear what customers had to say about the rewards programs they use every day. People were feeling frustrated with all of the existing programs in the market, especially those that required accumulating thousands of points in exchange for a small selection of trivial items. Customers were seeking real rewards that had real value, and most importantly, they wanted rewards that were rooted in experiences. That’s how Verizon Up came to life. Verizon is upping their game and listening even harder to their customers. It’s digital only, simple to use and connects you with the brands and access to experiences you know and love.”

And another quote from Verizon CMO Diego Scotti:

“We spent a lot of time speaking to customers who were telling us they were frustrated with existing reward programs on the market. They didn’t want to spend time tracking or accumulating thousands of points in exchange for trivial items. They wanted rewards that have real value and were rooted in experiences. That’s how Verizon Up came to life, it’s digital only, simple to use, rewards are constant and relevant, and it connects you with brands and access to experiences you know and love.”

Over at Marketing Dive, meanwhile, contributor David Kirkpatrick takes the launch as a sign that brands are moving away from traditional points-based loyalty programs:

“Loyalty and reward programs have been around as a marketing tool for a long time, but digital channels and branded apps have changed the way brands are approaching the tactic. Brands with long-running programs, such as Coca-Cola, have been revamping the experience to make it more digital. The Verizon news, as well as last week’s announcement of a new points-based loyalty program from Pizza Hut, suggest brands continue to seek out the best approach of holding onto existing customers.”

There’s no doubt that brands are increasingly tying loyalty programs to their mobile apps; today, consumers are increasingly hard-pressed to find a loyalty program that doesn’t require downloading the brand’s app to join. Verizon also makes a point – pun intended – in its blog post of saying that it purposefully shied away from a currency-based program, with the implication that consumers have moved beyond them. Coke also recently shuttered its long-running currency-based MyCoke Rewards program in favor of a new program base on instant gratification. Does this trend mean that points programs are passé?

While’s there’s plenty of evidence that younger consumers love instant gratification and prefer experiences to stuff, there are still plenty of reasons to believe that currency-based programs will continue to thrive – not least of which is their ability to change behavior. The ability to earn currency in anticipation of a redemption episode is one of the most powerful behavioral motivators in a marketer’s arsenal. As long as marketers seek programs that motivate incremental, profitable behavior, currency-based programs will continue to thrive in the digital arena.

That said, the Up program is a great fit for Verizon. Points-based programs don’t work well in subscription environments; Verizon’s goal is retention, not increased frequency or cross-shopping behavior, and a program that allows members to redeem for something cool every month will provide a schedule of fixed-interval rewards that should allow Verizon to build relationships based on more than simple inertia and utility. It’s also a vast improvement over their previous loyalty effort, Smart Rewards. We’ll be excited to see where Verizon takes the program – and we’ll look forward to chillaxing backstage with Lady Gaga.

Rick Ferguson is Editor in Chief of the Wise Marketer Group.

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