A recent report from Aberdeen Group compiled results from several studies on Customer Loyalty – specifically cross-channel, rewards, promotions and ROI. I found the information contained in the report to be interesting, and I want to share some of it with you here.
Retailers who have the best results with their customer loyalty marketing are best in the following categories:
- Utilize customer data to deliver personalized promotions
- Utilize social media and online communities to maximize brand interaction with customers
- Offer rewards to their loyal customers based on how often they shop, making an effort to not simply cut prices in order to make a sale
- Customer loyalty is not confined to the brick and mortar store, allowing customers to reap the rewards of their loyalty plan through the channel of their choice
- Track loyalty program redemption rates
- Track loyalty program sign-up rates
- Align loyalty offers with seasonal merchandising, pricing and promotions in all channels
- Use a loyalty processing application at the point of sale, allowing the retailer to process a loyalty card, redeem loyalty rewards, and generate receipt-based coupons for the customer
- Utilize database marketing
- Provide employee incentives based on loyalty redemption and registration
- Run a balanced loyalty program incoporating rewards, discounts, and merchandise promotions
Important points to consider:
There is so much more to implementing an effective customer loyalty program than offering free stuff or discounts. That part of the program is what I refer to as the front end of it. Retailers also must concentrate on the back end, or else you’re leaving money on the table. According to Aberdeen’s report, only 37% of retailers surveyed use the data collected at the point of sale to personalize offers and market to their customers.
Another important point to consider is the effectiveness of focusing on frequency instead of dollars. “By increasing the frequency of customer visits, the retail organization will gain more up-sell and cross-sell opportunities,” cited from the above-mentioned Aberdeen report. Retailers need to get away from the thinking that cutting prices or giving price discounts is the only way to drive customers back to the store.
How do you know if your loyalty program is working if you don’t track its effectiveness? Your program should give you the ability to know what percentage of your customers are participating and which rewards are being redeemed so that you can adjust accordingly. Otherwise, you’re not spending your marketing dollars efficiently.
Your customers should be able to reap the benefits of your rewards program through whatever channel they choose – in the store, on your website, from their mobile device, etc. From the Aberdeen report, “Changing customer needs for marketing deliverables must be addressed; as these changes are met, retailers can expect to remain top-of-mind, and increase their wallet-share…. As customer sales channel preferences and affinity behaviors continue to evolve, retailers must evolve as well.” Translation: You have to move with the times. Don’t be afraid to change, and don’t put up barriers to communication with your customers by resisting technology.
I hope the information from the Aberdeen report as summarized here is helpful and acts as a reminder that we must continue to evolve and improve our marketing strategies. If you would like further information or assistance with implementing an effective customer loyalty marketing solution, contact me via phone or email anytime, or visit our website, www.powerpassloyalty.com.
