What Loyalty Managers Can Learn From PlayStation

According to a recent survey among 50 large German retailers, conducted by the Initiative Digitale Handelskommunikation (IDH), retailers are investing a lot in innovation and digital offers. The retailers surveyed want to increase their budgets by an average of 25 percent. The projects are very diverse. But, which projects will generate real competitive advantages?

For years the PlayStation Plus subscription model has been Sony's guarantee for both, satisfied customers and recurring revenue. The concept is a good example of how to bind customers to the use of a digital service in the long term. How does this connect to retailers and their customer loyalty programs? Let’s have a look at potential adaptations of PlayStation Plus benefits in order to drive loyalty in retail.

Access To Premium Services

The online multiplayer mode is the ultimate experience for most gamers. The option to play online with friends and/or strangers requires a PlayStation Plus-membership. Sony has thus made Playstation Plus a must-have for those who want to be part of the gaming community.

Imagine your customers could get access to premium items by creating a customer account within the retail app. Those who sign in would experience a way better shopping journey. Deleting an account leads to the loss of benefits.

Free Products

As a PlayStation Plus member you get three games for free every month. You can play these games until the end of the membership. With an annual membership price of €60.00, that is an incentive for customers to keep renewing the membership.

If retailers were to offer free monthly shipping of products that customers actually need, this would be a service that, as far as I know, no one has ever offered before. Then perhaps even a paid participation in a loyalty program could be plausible. Here, too, the value for the customer would have to be significantly greater than the annual price.

Another free product idea for the retail sector is to provide access to games that can be played within the retail app.

Example Scenario

If a discounter sells products from an animated series for kids and the customers' kids love the offer, wouldn't it be great if parents could allow their children to play a video game about the series on their tablet free of charge?

Recurring emotional experiences would favor referral marketing. The only thing needed would be a customer account to use the retail app.

Discounts Higher Than 50%

In the PlayStation Store, Plus members benefit from discounts of up to 75% off the original price. Of course, Sony can afford this level of discount especially because the forecast for PS Plus sales far outweighs the expected loss. Hardly anyone will regularly download more games than they can actually play. After all, the discounted games are account-based downloads. The uncontrollable sharing of Plus benefits is thus prevented.

Wouldn't it be easy to link discounts greater than 50% in retail to the ownership of a customer card? Coupons are good. But it would be easier to communicate something like, "Create a customer account in the app now to save up to 50% on every future purchase."

Customer Loyalty Is King

Retailers who provide free products or services to their loyalty program members may get in the position to set a price for the membership. With the retail app they are able to strengthen the bond with the customer:

1. Premium products e.g. in grocery stores are not new – exclusive access to these products would be. It should make the offer even more interesting.
2. It is a familiar concept in marketing: Give more than you take. As a result customer loyalty and referrals strengthen the company's own market position in the long term.
3. A loyalty program membership linked to high discounts is easy to communicate and offers direct added value for the customer.

Image credt: Main photo by Michal Ilenda on Unsplash