The foundation of every successful loyalty program is an attractive value proposition for the consumer and integrated loyalty analytics. It is more and more important for companies to have very special rewards, so called WOW!-Factors. These rewards shall not only encourage customers to stay engaged, but to spend more money more often just to reach the once-in-a-lifetime experience, premium merchandise or lifestyle-themed reward that appeal to a member dream. Further elements in successful reward designs are soft benefits and personalized rewards. Soft benefits like special access and unique privileges are an important factor for differentiating oneself from the competitors.

The second part of the foundation is to cluster your customers in homogeneous segments based on the gathered transactional data. These segments are addressed with the appropriate customer strategy and, thus, make the most out of the marketing expenditures. The sheer amount of transactional data combined with the customer entity should give enough business insights to promote the right merchandise to the right customer. Therefore it is crucial to have several KPIs set up to see if activities are steering in the right direction or if a change is necessary. Your customer strategy is then based on a good foundation.

Based on this traditional loyalty service-, marketing- and sales activities are happening. Loyalty marketing campaigns have to be measured at both the individual customer and segment level and to be completely integrated with campaigns and promotions. The offers must be targeted with the right product and the communication needs to be personalized and consistent across all channels. Service and sales processes have to recognize loyalty specific elements and should be accessible via several channels. In addition it is crucial that typical loyalty operations like member registration, profile maintenance, statements or lost or damaged card process are integrated into the CRM application.

These traditional activities are the ‘bread-and-butter’ activities which in these times need to be extended by further loyalty marketing efforts in the area of Word-of-Mouth (WOM) and social networks like Twitter, Facebook or Linkedin. Be engaged, follow the blogs and react accordingly if necessary.

Personal recommendation (WOM) is the best marketing that can happen to a company and a brand. People believe friends or colleagues or even strangers more than a marketing campaign via TV, radio or internet. Therefore it is crucial to filter the so called WOM champion customer within the database. Going the next step and integrating WOM marketing will lift the success of loyalty management and companies will achieve an even better ROI of their loyalty marketing efforts. The goal is to build profitable, long-term, differentiated relationships with one face to the customer by additionally applying WOM tactics.

For more information have a look at my white paper under

www.ciber.co.nz/pdf/Loyalty_Management_in_Retail.pdf

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Posted in CRM on 14 January 2010
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Tagged: Business Value CRM IT Strategy IT Value Multi-Channel Retail Social Networking

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