How I got there.
First I needed to get a clear understanding of what is being asked from me. I condensed the challenge into a brief for myself in order to gain clarity of what would be the most important aspects of the challenge. The opportunity I stated as follows: “How might we design a loyalty program that reflects N26’s brand and its disruptive nature while offering incentives that connect well with their customers?”
Next I needed to structure my approach: I set myself a time limit of 4 days to finish the challenge and decided on the format of the final deliverable early on: A website that would introduce the loyalty feature to customers. From there I worked backwards to identify the individual steps in the process.
Desk Research is a great way to dive into a topic to understand it better quickly. And I needed to get my head around the topic of loyalty. I had a lot of questions:
Competitive Analysis
I wanted to understand what direct competitors like Revolut or Monzo and other more traditional banks are doing in the sector. It turns out that the direct digital competitors do not yet offer a loyalty scheme to their customers.
More traditional German banks also don’t offer loyalty programs, though a lot of international and American banks like Deutsche Bank or CitiBank do so. They usually work with a point system: Customers collect points by spending money and the points can then be transformed into credit that can be spent on partner websites or stores. MasterCard and Visa work with a similar system.
Bank of America and Wells Fargo offer loyal customers lower rates on student and car loans as well as free withdrawals from non-chain ATMs, no-fee checking accounts or free equity trades.
Loyalty Program Market Analysis
I read about loyalty programs in general as well. There are a lot of studies and articles out there mostly talking about international or American markets. I synthesised the learnings into three main insights:
“The bottom line is that consumers have come to expect a joined-up, personalised customer experience, wherever they engage with a brand. (...) while some may favour express delivery, others may see more value in early-bird, exclusive buying opportunities or exclusive content. To keep an individual customer engaged and ensure your loyalty scheme remains fit for purpose, you’ll need to understand what improves their individual satisfaction.” – Inviqa
“A recent Accenture loyalty study reveals that while 91% of financial services executives running loyalty programs believe members are satisfied with their rewards program, only 15% of customers are extremely satisfied.” – Forbes
There were not many loyalty offerings that made much use of smartphones and the opportunities that come with them. Most loyalty programs still rely on loyalty cards that the user has to carry with them.
"As we move toward the age of digital payments, banks and retailers can start to think about loyalty programs that add value and delight customers with new “frictionless” rewards offered at the point of service." – Forbes
Having gotten a clearer understanding for the competitive landscape and the market offerings I wanted to see if the things I'd learned resonated with real people.
I prepared a small conversation guide with questions around 4 main topics:
It was important for me to get a diverse set of opinions on different ends of the spectrum. I tried to find people who…
…have a close connection to their bank & people who don’t care about their bank.
…only pay by card & people who only pay by cash.
…shop a lot & people who don’t like shopping.
After having talked to a few people I synthesised the learnings into three main insights:
Especially loyalty cards from small shops are often lost or forgotten. People end up having three versions of the same card because they never remember to bring them. Especially at places where people don't shop regularly, like a department stores people forget to bring their member card which leads to frustration and abandonment.
Bigger loyalty programs like Payback seem to have intransparent benefits which leads people to abandon the program. There are also concerns about data collection and privacy: People are aware that they are paying for the rewards with their data.
Instant rewards, so at the point of purchase, seem to be the biggest delight.
Ok, this was great input. Now let’s see what I can come up with. I based my intial ideas on what I read during the desk research phase, on what I had heard in my conversations and on what made most sense to me.
I came up with two rough concepts, mostly focused on creating a desirable offering. Then as a cross check I looked at the concepts from a business perspective.
The biggest need from a business perspective that I could make out for N26 is growth and retention of customers. My first concept–the loyalty platform–made the most sense to me in terms of business needs but it also seemed to reflect N26's disruptive nature very well because on the one hand it enables businesses of any size to attract and retain their customers by making it so simple to join and stay in their loyalty program but on the other hand it also attracts and retains N26's customers the more they buy into it.
Having decided for a concept I started mapping out a customer journey. Journey mapping helps me to think through the entire experience which leads me to identify problems and oportunities.
For this concept not only the customer journey was important but also the partner journey, since the B2B offering would be a key part of the puzzle.
Based on the journeys I started to design and prototype key interactions like the loyalty section in the N26 app and the loyalty cards to populate it. Being mindful of time I left out certain ideas like integrating the loyalty features into the transaction list or sketched them out roughly like the “Join more” section where N26 users can browse through all the loyalty partners.
For designing I worked with Sketch and for prototyping I used Principle.
Now I needed to focus on creating the final deliverable which would have to be self explanatory. I had already decided on the format of a website because it is accessible and easy to share.
One challenge was trying to imitate the tone of voice as well as the image language used by N26. I wanted the website to look and feel so that it could be mistaken for a real N26 website.
For building the website I worked with Webflow, a tool that I've been working with for the past 4 years.
I love working on details. Swtiching between high level concepts and small detail brings me a lot of joy. Even though there was not too much time available during this challenge I still wanted to make sure to have some things stand out.
