10 tips to improve your loyalty marketing program plus 5 reasons to kill it
DESCRIPTION
For companies that have or are considering a loyalty marketing program, this presentation provides 10 best practice tips for ensuring success, and 5 bad-practice tips to avoid.TRANSCRIPT
10 TIPS TO IMPROVE YOUR
LOYALTY MARKETING PROGRAM…
PLUS 5 REASONS TO KILL IT
Jay Weinberg, President, The JAY Group
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Total Number Loyalty Program Accounts in the U.S. is Over…
2,100,000,000
The Average Household is Signed up for…
18.4
The Average Household is Active in…
8.4
Source: 2011 Colloquy Loyalty Census
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Your Loyalty Program Needs to Work Hard!
10 Tips to Improve Your Loyalty Program
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1 2 3 4 5 6 7 8 9 10
Understand where you are on the
Earn/Redeem spectrum
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High
potential
Low
potential
High value
EARN
RE
DE
EM
Airlines
Gas
Retail (high Freq)
Retail (low Freq)
Hotel
Car Rental
Casino
Drug Store
Dept Store Credit Cards
Low value
Ensure Everyone Knows About the
Program and Understands It• Front-line service personnel are most important
• If they do not understand the benefits and features of the program, customers will reject it
• Issues are often tied to extent employees are expected to deliver benefits
• Instances where many front-line people never heard of the program• High turnover, low training establishments
• Less control over messaging
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He’s a Rewards
Club Member.
What Rewards
Club?
Determine Whether You Need Points
• Soft benefits only may make sense
• Special discounts are easier to manage
• Experiential rewards provide high perceived value
• Points are good for enabling flexibility of choice
• Points make sense for high frequency transaction industries (5-10+ per year)
• Points create opaqueness
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POINTS DISCOUNTS EXPERIENCES
Determine Whether You Need Points
• Examples of programs that focus on discounts and
special treatment
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Make Rewards Meaningful
• High perceived value
• Attainable
• Available
• Redeemed for good value
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10
Make Rewards Meaningful
$1,042 $599
Going Mobile? Understand the Difference
Between Visits and Transactions
• POS integration ties rewards to customer value
• Gain the benefits of customer information
• Segmentation!
• Less prone to fraud
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• Easy to integrate
• Many third-party options
• Relevant for stores that
are not necessity-based
Accrual scheme should be designed around the customer lifecycle
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Going Mobile? Understand the Difference
Between Visits and Transactions
VISIT TRANSACTION
Be Unique
• You’re not an airline. Don’t copy their program
• Think about the added value you can bring to customers
• What unique, meaningful experiences can you provide?
• Are there private, exclusive communities you can create?
• Access creates demand and trumps discounts
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Be Unique
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COST
PE
RC
EIV
ED
VA
LU
E
High
Low High
Transparent (cash)
THE BERMUDA TRIANGLEOF LOYALTY
GOOD
GOOD
BETTER
BETTERBEST
Be Unique
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Be Unique
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Use Data to Drive Incremental Sales
• Focus on the back end of the program as much as the
front end
• Segment messaging and offers
• At least based on RFM
• Win back profitable defectors
• Implement an at risk (defection) model
• Deselect unprofitable customers
• Use data to improve merchandising and site selection
• Become a customer centric organization
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Gamify
• Include gamification elements to increase engagement
and interest
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Gamify
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Treat Customers Better than Prospects
• Do not give better deals to new customers than existing
customers
• At least not blatantly
• People understand sign-up bonuses
• If they didn’t get one, give it to them later
• Surprise and delight current customers
• Not a special offer that requires a purchase
• Make it a real gift
• OK to require a visit, but not a purchase
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Keep it Simple
• From a business standpoint, do the cost/benefit analysis
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INCREMENTAL
REVENUE
- Acquisition
- Retention
- Share of wallet
- Cross/up sell
>TOTAL COST
- Rewards
- Delivery & execution
Recap
Understand Where You Are on the Earn/Redeem Spectrum
Ensure Everyone Knows About the Program and Understands It
Determine Whether You Need Points
Make Rewards Meaningful
Going Mobile? Understand the Difference Between Visits and Transactions
Be Unique
Use Data to Drive Incremental Sales
Gamify
Treat Customers Better than Prospects
Keep it Simple
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5 Reasons to KILL It
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It’s the Agency’s
fault!
You’re Under Water
• Cost of the delivering benefits is greater than the
incremental return
• Negative ROMI
• Decreasing benefits or increasing promotions have not been
effective
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It’s Unnecessary
• There are more cost-effective ways to differentiate from
your competition
• Loyalty programs are best used as a tie-breaker
• “Real” loyalty strategies are always preferred
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Tracking Purchases is the Only Reason
• If there is no compelling value proposition for the
customer, it will not work
• The program, first and foremost, must be about providing
value to the customer
• That’s the path to incremental value
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Overcome Service or Product
Deficiencies• No marketing program, rewards or otherwise, will
overcome product deficiencies or poor customer service
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To Dissuade Deal-of-the-Day Shoppers
• They are likely looking for deeper discounts that you can
provide
• If they like your product or service, they’ll come back
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Thanks for listening!312-447-0414 x1
Skype: jayweinberg
www.thejaygroup.com
Jay Weinberg
The JAY Group
444 N Wells St. Ste 304
Chicago, IL 60654