Episode 18: Leveraging Loyalty to Scale Subscriptions with Vik Mehta, Head of Sales at Velocity Logic
In this episode of the Subscriptions: Scaled podcast, Nick Fredrick, President of Rebar Technology Solutions, is joined by Vik Mehta, Head of Sales at Velocity Logic. Velocity Logic is a loyalty technology company that mainly works with energy fuel companies and convenience stores.
Vik spent years at BP working on card negotiations, technology, and loyalty. Now he’s working with local fuel operators and franchisees on the retail front.
The Convergence of Subscription and Loyalty
Vik thinks of subscription as the idea that as a loyalty provider, his job is to provide value in exchange for a cost the customer is willing to pay.
He says you should build loyalty on a good product, good service, and a good relationship with your customer.
Today they look at subscription programs as a way to segment customers. Their goal is to engage the customers that can and want to take advantage of specific products and services.
Beyond Products and Services
They strive to keep customers continuously engaged, and want them to feel like they’re getting more out than what they’re putting in.
The goal is to make sure a customer is happy and wants to participate in the loyalty program on a subscription basis. And that takes bringing more advantages to subscribers than just a product or service.
Benefits of Loyalty for Subscription-based Businesses
Loyalty is a toolset that can open up all the data about your customers. It can help you see your customer from a holistic viewpoint.
Loyalty will show you what customers are doing from the day they become customers through their complete journey at different stages as a customer.
This data allows you to tweak what a subscription may need to look like for specific customers. It helps you decide what you provide to a customer and how you communicate with them. Loyalty gives you the data you need to offer custom communication and custom subscription options to customers.
Getting Consumers to Pay for Loyalty Subscriptions
First, you can’t pull gimmicks like retailers used to do years ago. There has to be a genuine value exchange for the customer.
Think Amazon Prime. There are benefits to being a subscriber. So Vik tries to get his retailers to think about other services they can provide subscribers, whether it’s a special discount, special perks, or other recognition opportunities as unique VIP customers with tangible benefits.
There is no one-size-fits-all solution, but every business has customers that are behaving like VIPs or already spending lots of money. Loyalty helps you identify those customers and make them specific offers. And once you create a core subscription offer, you’ll want to develop ancillary offerings that are customized based on the data you’re collecting.
Partnering With Others for Loyalty
Uncomplicated relationships between two brands are where Vik and his team have seen success in recent times.
The critical factor is being open and honest about what each partner wants to get out of a situation. And, of course, figure out what economics will work for each partner.
Most importantly, focus on the customer.
What would bring the most benefit to your subscribers? What other businesses would they find the most value from being connected to through you?
Is there another business where they would love to have the option of redeeming your loyalty points? For example, T-Mobile subscribers on a certain subscription get a discount on Netflix.
What would your customers continue to pay you for what another company could offer them?
Alternative Subscription Currencies
Subscription and loyalty programs will continue to trend more to cater to our everyday lives, from fitness and wellness to shaving and food—we can subscribe to just about everything today.
Allowing your subscribers to redeem loyalty rewards for subscription services they want to use or already use will give companies a significant advantage.
You have to leverage the advantage you have of having customers that other companies want to access. The relationship you have with your customers, proven by the data from your loyalty subscription program, is the advantage other businesses want to access.
Bundling Subscriptions
Don’t worry about connecting brands or companies. Instead, worry about connecting the consumer. What are they already buying? What do they want to buy?
In Vik’s case, the retailers he’s working with are expanding their product offerings along with partnering with other brands.
The Future of Paid Loyalty Subscriptions
Brands that create a broader offering are the ones who will win in the long-term. Subscribers want benefits that heavily outweigh the cost of their subscription.
And loyalty gives you the data you need to provide subscribers with that extra value. So how well you can identify your best customers is a good measure of how well you’ll participate in the future of paid loyalty subscriptions.
Pitfalls of Loyalty Subscription
Companies have to be able to understand what customers are doing beyond their subscription. That takes having the proper infrastructure in place.
Being able to track what they’re buying, how much, and how often is key to segmenting them properly. In addition, it allows a company to make valuable offers to their customers and communicate with them effectively.
Beyond the infrastructure, you have to have the ability and flexibility to communicate and provide value based on the data you gather.
Finally, you have to be able to deal with customer service issues. Technology doesn’t always work as it’s supposed to. You should try to prevent as many problems as possible and plan to handle problems as they occur.
And always keep the focus on enabling the customer to get the benefits they subscribe to get.
If you’d like to get in touch with Vik, you can email him Vik@VelocityLogicGroup.com or find him on LinkedIn Vik Mehta.
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