Four Ideas to Put Love in Your Loyalty Program

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February 8, 2011

Irrelevant offers and messages alienate customers and reduce the love in the Return On Marketing Investment (ROMI) of loyalty programs.  A recent study by the CMO Council uncovered that 73% of consumers participating in a loyalty program have received promotions for products and services they already own.*  Ouch!

In addition to wasted marketing resources, customers become less and less interested in reading your communications.  They think, “Why should I read this?  I already know everything about this company and they aren’t going to offer me anything special.”

Forging a deep emotional bond with customers is at the heart of building loyalty.  Direct marketing communications play a significant role in achieving a personalized experience, yet 68% of consumers rate reward program communications a seven or less on a ten-point scale.** So what’s a direct marketer focused on customer retention to do?  Here are four ideas to consider:

  1. Make sure all your data points are aggregated. This includes purchase data (both online and offline), email opens and clicks, critical online behaviors (especially important for non-commerce websites), and direct marketing activity and response.
  2. Speak relevantly. By the very nature of signing up for a loyalty program, people are certain their purchases are being tracked.  They expect you to use the information.  So if someone only buys from only one category and nothing else, some level of cross-selling is OK, but you have to communicate about what’s important to them. The CMO Council Study also found that, “only a third of companies capture personal or product preferences from program members.” In addition, “80% said they are happy to provide additional personal data if they see that it is being used to provide relevant perks such as special offers, discounts, and loyalty bonuses.”***
  3. Offer appropriately. Do the offers you post to Facebook have more value than the ones you email to your loyal customers?  Nothing does more to diminish the value of a loyalty program than giving the wrong offers.  Not all customers are as valuable as others, so not everyone should receive the same offers.  (And keep in mind the relevancy issue from #2.)
  4. Show genuine appreciation. It is a loyalty program after all.

Loyalty programs have come to the forefront of customer retention marketing. Growing and expanding the love in the customer relationships evolves around cross-selling, up-selling and lengthening the customer life cycle.  Using data intelligence to provide messages and offers that are personalized to customers, demonstrates that you are interested in helping them in some way, and not just trying to hit the next sales quota.

*CMO Council, Why Relevance Drives Response and Relationships
**Research conducted by Colloquy/LoyaltyOne and Direct Antidote
*** Transactis Report


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