How to Emerge Your Paid Loyalty Program from a Pandemic
AMA with Andrew Sonnichsen, VP, Loyalty Program Management, CINEMARK
Andrew Sonnichsen is the VP, Loyalty Program Management at Cinemark. He’s got a long history of success in retail, entertainment, and technology. Throughout his career, he’s proven his expertise in the development and profitable growth of marketing programs via a strategic emphasis and analytical focus. Today he’s here to talk with us and answer your questions about how he and his team emerged their paid loyalty program from the pandemic.
ANDREW SONNICHSEN, CINEMARK
“If you put the member at the center of everything you do – you usually end up being successful! Cinemark has always taken a very member-centric approach to all aspects of our loyalty program and we wanted to make sure we kept that same spirit even in difficult times.”
Full Transcript
*Questions submitted by community members
Question: What prospect/existing member habits have changed during the pandemic, that you expect to stick around post-pandemic? Of these, are there ones you are specifically focused on capitalizing/optimizing because it's actually a benefit to your business?
Great question to start with… We have seen the transition to digital interaction accelerate. for example - the purchase of movie tickets from mobile devices as opposed to in person at the theatre. From a loyalty perspective, we are working very hard to optimize our digital experience with such things as 1-to-1 personalized data to enhance members’ experience when they interact with Cinemark online or in our App. The way we shop on other apps like Amazon or Starbucks - these experiences that we have across all of the apps we use, train us on what to expect from other apps. Amazon and Starbucks might not be direct competitors in the traditional sense of the word - but they are setting the bar high for how our customers expect us to deliver on their in-app experience. Overall, we design the App to be member-centric and most features of the App are designed from a loyalty-first perspective to make the experience easy and frictionless. When a member wants to buy a ticket to see a show at Cinemark - the App is the place to go because it is just so easy. I know for me personally - that is how I shop on Amazon and why I use their App - and the same approach is taken for Cinemark.
Question: How did Cinemark handle options to pause membership during the pandemic? Why did you take this approach?
Cinemark automatically paused membership billing during the pandemic and it still remains paused today. So we took the action for the members. We considered several approaches including providing members the option on whether they wanted to pause their membership or not – but with our theaters closed, we decided the right thing to do for our members was to be proactive and pause billing. If you put the member at the center of everything you do – you usually end up being successful! Cinemark has always taken a very member-centric approach to all aspects of our loyalty program and we wanted to make sure we kept that same spirit even in difficult times.
Question: What KPIs will you pay the most attention to inform your decision-making as theaters re-open?
We are closely watching attendance in our theatres, especially from our Movie Club members to gauge their level of interest in collectively returning. We also have been executing consistent customer surveys to our members to keep in touch with their sentiments and opinions regarding COVID-19 and moviegoing.
In times like these, it's so critical to the success of the subscriber and the business to constantly be hearing their changing viewpoints - like everything else, their needs are shifting rapidly and the goal is to meet the needs of our subscribers.
Watching changes in viewpoints over time as the pandemic has progressed has been important.
Question: How has the direct-to-streaming influenced consumers’ sentiment on returning to theatres (aside from the safety concerns driven by the pandemic)?
Regarding streaming... overall we have seen that people who love to stream movies also love to see them in the theatre. Those that are streaming a lot of movies during the pandemic are the same who are saying they can't wait for big movies to come back to the big screen. Yes, streaming is a real element within the industry to closely watch, but we feel and our customers agree that having out-of-home 'escapes' are still very high in demand. This pandemic has presented a unique opportunity to understand the role that we play in the lives of our customers and the way they see our business - going to a movie is about more than just seeing the movie - it's an experience and an escape. Understanding the role you play in your customer'’ lives should inform the experience you deliver - and again, that will change over time. In markets a little bit further ahead in the re-opening of movie theatres with the pandemic more under control such as China and Australia - recent weeks/months has set some all-time box office records demonstrating the pent-up demand!
Question: Customer surveys for direct feedback are an excellent play - how frequently do you send those?
We historically had sent customer surveys quarterly, but during the pandemic, we increased that to monthly with questions specifically designed to understand the impact of the pandemic and how that is changing over time. If our goal is to create customer-centric solutions and experiences, then we need to know what is it our customers really want. Changing the cadence or the pace at which we hear from them is informed by what's going on in the world around us and what we're learning from them - this data is critical to a better subscriber experience.
Question: Customers may sign up for Movie Club for different motives, goals, and expectations. How do you group your customers in order to tailor their customer experiences?
A strong loyalty program allows us to collect a lot of data – and with that comes the ability to personalize. In the movie industry, an important element for targeting is the genre of the movie. Some members may like horror movies and some may enjoy going to kids’ movies with their families. The beauty of loyalty customers and subscribers is in the relationship we build together - at every stage, there is a chance to learn more about them and then use that data to make their experience better. One area we can effectively personalize well with data is segmentation. Having this information allows us to tailor our messaging about upcoming films and events which best align with each member’s preferences and create a better overall member experience.
Question: Why would movie-goers choose Movie Club over A-list?
Alright, you are setting me up with a softball there. First and foremost, Movie Club costs less than half of the A-list which makes it appealing to a much broader group. But beyond that, I would say it is the flexibility of Movie Club and the diversity of benefits. Movie Club ticket credits roll over from month to month if unused and can be redeemed for friends and family so you never have to go to the theatre alone! You really cannot overestimate the value that subscribers place on flexibility and diversity of benefits - when things are designed to meet their needs and the benefits you offer actually appeal, success is much simpler. Also, in addition to including tickets in the program and waived online fees, Movie Club also includes a 20% discount on concessions which is an appetizing benefit for our popcorn and candy-loving members!
Question: If you were creating a new loyalty program off of a single member benefit, what would it be and why?
As a base rule I think the best loyalty benefits tie in very closely to incremental activity from the member – and by that I mean the benefits increase in value as the member spends more and more. And of course, I like the concept of paid loyalty programs because I think requiring an upfront commitment from the member to buy into the program creates a high amount of stickiness to spend with your brand. So putting those 2 together and keeping it simple – I would say the single benefit I would choose would be the discount rate that a member would buy in to have access to (e.g. Pay $100 a year to get 10% off all purchases). This will provide benefits to both the member and the company. Simply put, benefits increase in value as the member spends more and more - rewarding their loyalty. Beyond that - paid loyalty programs work because they require an upfront commitment from the member to buy into the program which spurs retention and opens the door to expansion as they spend more with your brand. The member gets a discount that they appreciate and creates very real value for them that is easy to understand and ideally will create a level of commitment to consolidate their spending with that company instead of splitting their wallet amongst competitors.
Question: What opportunities could post-pandemic reopening present for Cinemark to revolutionize movie-going?
Interesting question! One thing that Cinemark introduced during the pandemic was a concept called private watch parties where a customer could rent out an entire theatre in an easy-to-book online experience for a relatively low price. These really took off and have been a huge success for Cinemark – and others in the industry have followed. Although the demand for this experience may lessen as the pandemic lessons, there are some aspects of this consumer experience that can be applied going forward that could change the way many view movies.