When most companies want to implement some form of loyalty rewards program, they usually outsource that work to an organization like Engage People and people like Len Covello.
Covello’s the CTO for Engage, and he’s been part of the loyalty rewards — and employee recognition — space for most of his career.
Engage works with global corporations to help them develop better employee recognition platforms, as well as better loyalty rewards programs.
“One of the mechanisms of employee retention or engagement is an employee recognition program,” said Covello, in an interview with MobileSyrup.
In a different era, companies used to reward longtime employees by gifting them with something like a pen or a watch.
However, due to shifting employee expectations — and the fact that it’s not uncommon for employees to switch jobs multiple times over the course of their careers — companies have started to reward talent in new and innovative ways.
According to Covello, ‘gamifying’ tasks, or turning the completion of tasks into a rewards-based system, is one of the the best ways that companies can retain employees, while simultaneously encouraging them to work harder.
Understanding the loyalty rewards space
Employee engagement is only one of Engage’s points-of-interest. The company’s also involved in building up companies’ loyalty rewards programs.
Typically, loyalty rewards programs provide customers with two different kinds of redemption options: local and global.
When a customer uses a rewards program to order a product that’s shipped from the customer’s home country, that’s local redemption.
When a customer orders a product and it gets shipped from a foreign country, that’s global redemption.
“When you start to get into global programs, it becomes difficult to package attractive products for people on a global scale.”
The problem with global redemption programs is that it can become quite expensive to ship products across foreign borders, while also guaranteeing that the products arrive intact in a timely manner.
Not to mention, it can be difficult to guarantee that the products you offer will appeal to every market.
“When you start to get into global programs, it becomes quite difficult to offer something to your entire member-base,” said Covello.
The Turkish frequent flyer from Istanbul, for instance, probably doesn’t want the exact same rewards as the Canadian frequent flyer.
That’s where Engage comes in.
Loyalty rewards on a global scale
Local Redemption Globally (LRG) — a name that Covello agrees is a bit of a mouthful — is both a philosophy and proprietary Engage product.
“[We] wanted to bring that local redemption to the client anywhere in the world,” said Covello.
As a product, the LRG platform enables clients to spend their loyalty rewards points — from Engage partners like TD and Marriott — at global ecommerce sites like Amazon and Apple.
“Any [online] store that offers ecommerce anywhere in the world can be put on LRG technology.”
As a philosophy, LRG is a way of opening up the ecommerce space, and allowing companies that aren’t typically known for their ecommerce work to compete with giants like Amazon.
LRG also means that, if you don’t have enough points to redeem a trip abroad or redeem an airline ticket, you can still spend points at online retailers without being limited by your options.
“Any [online] store that offers ecommerce, anywhere in the world, can be put on LRG technology,” said Covello.
LRG also solves the global customer problem by allowing you to spend your loyalty points at local retailers affiliated with the loyalty program.
“That’s one of the largest problems that LRG solves,” said Covello. “The system knows the country the member is shopping in and displays the appropriate local retailers.”
If you let a frequent flyer from Istanbul, or Toronto, or Reykjavik choose how to spend their points, you don’t have to worry about localizing their rewards options — they’ll be able to buy whatever they want to buy regardless of their location.
“[Imagine] redeeming those points for coffee.”
Equally important is that you won’t have to worry about customers cashing out their points on something like a gift card.
“The gift cards are usually a way for people to cash out of a program,” said Covello. “It could be an indicator that people are leaving your program and your rewards are not as robust as they could be.”
However, not every ecommerce platform is aligned with an LRG-equipped company. Users can only spend points on platforms that are white listed and approved by an LRG-equipped organization.
As for which partners are typically affiliated with a loyalty rewards program, Engage’s clients typically associate with brands that align with their own image.
Engage is also working with Mastercard and Visa to test out pilot programs around the world. Covello said that his company is looking to find ways to integrate mobile wallet services as well.
“Now it’s not just online ecommerce, but in-store point-of-sales,” said Covello. Engage’s internal goal is to transform rewards points into their own ubiquitous form of currency around the world.
One day, it might actually be possible for loyal customers to spend their points like real money.
“[Imagine] redeeming those points for a cup of coffee,” concluded Covello.