Best Practices in Customer Loyalty Programs
The earning/redeeming processes need to happen in real-time (especially for retailers with multiple locations, brands, partners, etc.) "The power of that instant gratification can't be underestimated" and "immediate dialog response confirms the value of program membership, and will likely spur future activity." While the technology is still in its trial stages, it is clear that that effective real-time systems deliver conversation ("real-time is real-money.")
An additional impact can be seen in in-store customer-specific offers (whether delivered via kiosk, smart cart, cell phone messaging, etc.) that allow marketers to measure specifically which offers were accepted or declined. "What better time to make an offer than when the customer is in the best mood and position to accept it--when they're in-store and already shopping?"
The second article, which I found even more interesting is The Global Loyalty Infusion. It covers best practices and innovations from across the world that can help loyalty marketers differentiate themselves in a crowded market:
- Open-source loyalty - marketers outsourcing the
loyalty value proposition design to their own customers so that they become true partners in the
brand relationship (for example, a credit card program where the applicants choose their rewards, repayment
schemes, interest rate options, and even the look & feel).
- Partnership marketing - licensed currency model in which a company buys loyalty currency to offer to their customers. Such loyalty partnerships will help more companies achieve critical mass, and will transform the loyalty industry by creating additional value for members, partners and stakeholders.
The color green - green-themed programs and altruistic reward options are proliferating, highlighting a trend in the use of database segmentation to target green and altruistic rewards to those customers most likely to respond. This way loyalty marketers can put altruistic rewards to use not only for their PR value, but also for their bottom-line benefit.
The data difference - Loyalty marketers, who have thus far been unable to leverage the enormous amounts of data they have access to, are now perfecting the art and science of building customer value. Facing a saturated market, these marketers understand that share-of-customer battles will now be won in the database.
Relationship banking - the concept of recognizing and rewarding customers across their entire relationship with the company (mostly in regards to financial services) is gaining popularity as a way to build loyalty to the brand rather than to individual products. Such programs help gather actionable customer data that delivers bottom-line benefit.
Moving beyond plastic - new payment/loyalty systems include cardless, contactless, biometric and, of course, mobile versions. This new generation of tools will require marketers to create value propositions rich enough to create a desire to opt in—because without explicit customer opt-in, you're only creating more spam.
The article's bottom-line sums it up nicely: "by paying attention to global practitioners honing the art and science of loyalty and relationship marketing, by networking with them and learning what their programs bring to the table innovation, you can help move the art and science of loyalty marketing forward. Listen to your customers, analyze their behavior through effective segmentation, choose strategically-aligned partners and leverage the latest in payment and communications technology—but do these things strategically, with your business objectives and brand strategy guiding your choices."
Posted by Universal Ad
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