One NZ X Youtap Limited
They wish to expand their loyalty program beyond
with Trade-in rewards
AND new digital wallet.
What are their objectives?
Objective 1
Objective 2
Objective 3
Increase customers engagement to ONE NZ products / upsell and cross-sell.
Reason 1
Easy implementation of loyalty program to allow users into have access to promotions such as rewards, and cash back with wallet
Reason 2
Improvement in accessibility to their trade-in reward points accumulated along with any other loyalty points gained by the user through promotions. By doing so, it becomes more personalised transaction experience.
1
In order to better understand the product I decided to research different use cases of loyalty program. This way I can understand the specification and idea towards future development for ONE NZ
Airpoints
Loyalty Program
How airlines have become central banks
In 2021 United Airline has released financial statement about how their subsidary of ‘Mileage Plus Holding, LLC’ as collateral to borrow Billions of dollars
In 2018 American airline made
$1.9 Billlions in profit despite that fact they had loss of 0.43cent per mile for every seats for such reason.
How has it started?
By Loyalty Program and Partnership.
Enhancing program (Frequent flyer membership) members’ experience by providing perks and services that differentiate from normal passengers. E.g. Lounge access, free upgrade, and boarding priorities.
Partnership with external companies -
The loyalty points are sold to fixed value to external companies. Back in 1982, American airline initiated collaboration with Hertz to reward customers with airpoints when renting a car.
This caused synergy of more frequent spending on airfares, as customers wanted to take advantage of airpoints
Another use case is when American Airline joined with Citi bank to initiate the credit card as mean to provide loyalty points to bank customers.
What else?
Airlines became central bank.
No TAX. As the nature of loyalty program is treated as rebate and cashback; which is to be claimed back by customer, it cannot be taxed.
This opened up for more partnership with external companies
Airlines are essentially behaving as central bank of their own currency.
On top of that there banks are operating as private for profit, there is not limitation how much currency become available.
What happened after?
Airpoints gained purchase power
Point = Money
Airpoints are now able to used to purchase goods and services
Airline continuous expansion of their value based as loyalty members grow
Starbucks
Loyalty Program
Customers are their bank
2.1 Billion in reward revenue
Introduction of their digital point wallet to top up and store. Starbucks invest these as interest free loans
User behaviour data to tailor offers, and new products tailored to entice more spending
How has it started?
Digital wallet application
In 2021, instead of payment with cash or credit card. Customers were allowed top up on their application and was rewarded with double the points to be used towards free drinks.
Due to great reputation and review of their application, people were eager to leave amount of money in their account.
The application only allows you to top up in pre-set amount, forcing customers to top up more than required
What else?
Gamification to keep clock work
Their star reward system and introduction of tier system was introduced as gamification to attract users
What happened after?
Customers’ exponential growth of digital balance allowed them to take on free loan
As users always had left over balance for future purchase, the top up values allowed Starbucks to use it to reinvest with 0% interest
The accumulated balance of all users excceed 2.1 Billion dollars in value.
2
Based on the research, I have summarised the keypoints regarding the loyalty program which I could focus on when designing the flows.
Key is accessiblity
Access to their digital wallet to track and redeem rewards with seamless integration with mobile experience has been the key factor identified as designed user experience.
Spending habits
Investigate if the loyalty program influences spending habits. For instance, do users spend more to earn rewards, as suggested by the airline example?
User retention - Gamification
Explore strategies to keep users coming back to the program. For instance, what mechanisms encourage users to continue participating in the program after initial engagement?
User motivations
Incentives: Understand what motivates users to engage with the loyalty program. For airlines, perks like upgrades and priority boarding are key, while for Starbucks, the ability to earn free drinks is crucial.
Perceived Value
Understand and define how the Business and Consumers are to perceive the loyalty points.
Future developments
Clarify the stage of execution. Loyalty program is progressive; by setting up infrastructure and collective strategy with external businesses.
Behavioral datas
Loyalty program is not just on attraction but a mean to collect user data, which is refactored back into the product as development.
Increased in business value
The points and reward can be packaged to behave like currency which increase will affect the business’s value.
Exploration of solutions
Based on the research and anlysis, I reaslied the intention of the the trade-in experience is not the main point of digital wallet implementation. The focus is, use the trade-in as the trigger to expand the loyalty and reward beyond to be more competitive in the market. This can be noticed as One NZ is the only company that provide rewards to their users.
As designer for the implementation, our team has explored design solutions that aligns with One NZ’s intention foresee what the future implementation there be. This not only provide idea for One NZ, it also upsells our product as a company
Proposal breakdowns:
Introduce digital wallet dedicated for One NZ loyalty program with trade-in as the focus.
Introduce gamification to engage users to collect free rewards upon completion of smaller task. T
The first 2 stages, create a system that allows One NZ to introduce closed loop system payment system with other external brands to enhance on the catalogue of goods and service.
Here are the solutions we have provided as loyalty program
Trade-in, save, and manage
Have complete control over the balance you earned from trading in your devices.
Store it in your digital wallet
Personalised promotions to use your points
Have complete control over the spending of the wallet balance.
Provide platform for users with ONE NZ as transactional service
GAMIFICATION AND REWARDS
Complete tasks and gain points.
Each points you earn will go towards any purchase of your choice
LEARN ABOUT USER AND PERSONALISE THEIR REWARDS
Understand the user at greater level.
Through collections of tasks, we can identify the pain points and needs of the customer.
It helps provide desirable product tailored for each customer.
Track your balance history
We have defined rules and all states of transaction activity to customise our existing transaction history to be tailored to loyalty program and trade-in experience
Offer earned
Offer redeemed
Offer Expired
Trade-in
Void
(trade in reversal)
Trade-in Expired
Phone purchase
