The Development of customer loyalty for the age group of 2000-2010.
Master's Design Thesis, Metropolia University of Applied Sciences, 2021. Client S GroupService Design / Customer Loyalty Program / February - November 2021
Main idea for the thesis was how S Group is going to get new loyal customers in a future. How people of young adults and teenagers are considered to be loyal customers? Old generations are disappearing and with this S Group will loose some loyal customers.
Tools used: Miro, Canva, pen and paper.
Design methods: Service Design, Design Thinking, Double Diamond, Project Management, Visual Design, Customer Loyalty Program, User Experience
Findings and observations:
Target group wants same benefits as other customer groups, which are to earn easy money and discounts, but they also desire transparency and high-class personal services.
Introduction
Main task in the work was to investigate age group of 2000–2010, what they think of a customer loyalty and what are their values. Also how to develop customer loyalty for the spesific age group. Developing Customer loyalty programs is a continuous work as customers demand new concepts. Customers want benefits and discounts which service providers create and while they receive important knowledge of the customers.
Responsibilities
Conducting survey online (questionnaire and interviews), analysing the data and creating a solution for the problem.
Topic definition
Generation Z (born 2000-2010)
Not a member of S Group and is critical towards the brand
Survey is done in Finland
The topic is actual, because the trade sector and the business world are in transition with digitization and diginatives
Main research question
The mindset / attitude of young people who are critical of the S group. Where does the attitude come from? Why they are critical?Research
I research young people's values and value-based actions (focus on loyal customers and services).
Target
To gain clarity on the thoughts and values of young people, how to use them to develop services and loyal customers to meet young people's needs.
Gen Z
There aren't much written knowledge about generation Z, in English there are some. I based my theory mostly from a book The Gen Z Effect (Koulopoulos 2014) . Gen G are adults and teens in their early puberty, they have been born between 2000 and 2010. They are more self-aware, independent and motivated than previous generations. In addition to this, they are also very reform-minded, goal-oriented and realistic. They don't know time before smart phones or internet. They use social media as they own it and it belongs to them.About values
In my thesis, I discuss the values of the target group in relation to loyal customers. The values are not easy to interpret, I use my research material to help me and with the help of the material bring out the value world of the target group. Values are part of a central self-image, they consist of beliefs and perceptions that are considered good and important. Values are acquired throughout life, they are obtained from upbringing, relationships and the surrounding culture, for example via social media. Everyone chooses their own values, i.e. what they consider important.Loyalty programs
The purpose of loyalty programs is to get the consumer to concentrate their purchases and form long-term customer loyalty. Centralization is not unproblematic from the point of view of the consumer, because consumer protection and effective competition mess it up. It is good for consumers to compare products and shops. They must be provided with enough information to make a decision and to support the comparison. Loyalty programs in FinlandThere are several types of loyalty programs, traditionally they have included a physical card ( S Group's loyalty card, Veikkaus card, HSL transport card and Museum card). All of these companies in the picture have their own loyalty program, with some you can accumulate points, get discounts or use it to travel like with an HSL card. All of these are connected by collecting information for the company whose card the customer uses.S Group's loyalty programThe operations of the S Group are summarized for the loyal customer in the S-card. Customer ownership of the S Group, i.e. membership, costs 100 euros in each cooperative store. As a loyal customer, you get a free S-card, either chipless or chipped, with payment features. Loyal customers can get discounts and benefits immediately by showing their S -card at the cash desk of the location. In addition to this, the loyal customer gets free S-bank services and S-mobile. Loyalty programs abroadIt is not easy to find a loyal customer program similar to the one used by the S group abroad. The closest equivalent can be found in Sweden from Coop, which was founded in 1899. The loyalty program has a fee (100 crowns) and you can get the money back if you want to end the membership (just like in the S Group). In addition to this, the customer receives a loyalty card from Coop, which collects points. Groups think positive way in S Group.
Groups want to belong to loyalty programs because they want benefits and bonuses.
They value the benefits and discounts, loyalty levels and benefits and personal service.
They also want memorable outcome, which I try to bring out in the results.
All groups are price conscius and they compare prices.
They don’t understand that bonus is real money
What groups are not interested in is loyalty magazines.
They don’t want to pay the membership fee.
They don’t use S-mobile, they feel it isn’t accessible.
The research and analysis
The qualitative research includes a survey, which was conducted first, followed by interviews. I received 50 responses to the survey and there were ten interviewees. The age target group of the study is wide, born between 2000 and 2010. Since the age range was wide, they had to be divided into three different groups in order for the study to be proportional. I divided the age groups into 2000–2003, 2004–2006 and 2007–2010 and named them "Adults", "Teens" and "Pre-teens". The survey questions came directly from SOK, I added my own interests to the survey, such as what young people spend money on. Double Diamond
I used the the Double Diamond (2005) process in my thesis. The model was developed by the British Council. The double-diamond process model consists of two phases. In the first diamond, the Find phase I gathered information and in the Define phase I aimed to find the right problem. In the Develop phase I created personas. In the Produce phases, the aim is to develop a solution that responds to the problem found. My results are written product and final posters. Develop phase
In the develop phase, I talked with my mentor . We concluded that I don't need to spend time in workshops for ideation, because the collected research has a lot of information about the target group. I took on the role of designer myself and developed ideas on the electronic platform (miro.com) "How might we?" - questions. Based on the conclusions, I created a mind map and started thinking about factors that the target group might be interested in. My main themes were the bonus, becoming a customer owner, personal service and experiences.
Produce
I made Post.it notes for the Miro.com, I produced ideas thinking about what the target group would like, such as "free energy drink". I tested the first ideas in a workshop with a target group using the Zoom service. I showed the person in the target group my digital platform and asked which of these proposals would interest him. I also asked what else he could think of about this or if he could come up with something else. The workshop in the target group answered that they liked the "free energy drink" idea right away. One answered that he wouldn't take free makeup himself, but thinks it's a good idea anyway.In the Produce phase, I started making the actual pictures that I use in my workshops. I found that my Post.it notes were not working properly after a workshop. I don't think they tell enough about my feelings, so I decided to create visual images on a digital platform.I used all information from my research while creating images. Main pain point in customer loyal program, bonus, benefits, memorable outcome and personal services. I used hastags as they are popular e.g. #happy, #positivevibes and #sustainability. I tried to bring fun and good feeling to the images.
Testing
In the first workshop people felt that in pictures are happening a lot, especially in a yellow poster. They didn't understand my message about "bonus is money", so I need to think that more. They liked how S-mobile is presented in a glow font. It creates different kind of emotion from S Group, they described it in words e.g new, fun and interesting. One user commented the usage of hastags that there are too much of them and they are a bit embarrassing. User explained saying "if we see a poster like this, we know that the person who created this isn't same age as we are and that's why it is embarrassing".Testers liked the good wibe aroung poster
Testers like the idea of using hastags (but not to use in every poster)
Testers like colours and figures.
After testing
I used the feedback from the workshops. I made modifications to the posters, the total amount of posters grew to five pieces.I added "Bonus is money" word "real".In membership poster I removed all hastags and placed hearts.
I decided to split the yellow poster in two “benefits” and “Keikka keskellä Prismaa”.
I didn’t make any changes to the “S-mobile” poster.
Final posters
Pondering
The project needs to be planned better and its preparation must be thought through more carefully. I would have liked a quicker response from the client at the beginning of the work. I took advantage of the waiting time by finding out the background information of the intended target group, but only after I had narrowed down was I able to refine the information I was looking for.In the workshops, it would have been preferable to record the discussions, then I would not have missed any of the discussions. This did not occur to me because I organized the workshops in an urgent schedule. I wrote down notes and I think I got important information.How can the customer be kept loyal? I think companies should communicate positively and transparently by doing this in the long term and considering quality content for their customers.With my proposal photos, I aim to give observations to the S group, what my target group likes and what kind of information they need. I recommend the S group to think about the need for loyalty magazines in the future. In my opinion, incentives related to the co-payment could be developed more with the help of, for example, spa experiences or product gifts.