What is Loyalty Marketing and how can it help my business?

November 10, 2009 at 2:51 pm 3 comments

Loyalty Marketing  by Jessica Grosse

 As consumers, we are constantly exposed to loyalty marketing programs. Think about how many times a day you insert your debit card, scan a key fob or provide your phone number or zip code at the check-out counter. We have become so accustomed to these routines that most of us now consider them just part of the purchase process, regardless of the personal benefit or reward. Whether we opt-in or not, our spending patterns and product preferences are easily attainable. Considering how prevalent transactional data has become, companies willing to invest the time and resources to collect this data have a distinct advantage in their respective industries. This data provides clear customer profiles, helps to predict product trends and can also be used as the foundation of a successful loyalty marketing program.

 I recently had the opportunity to sit down for a brief Q&A session with Stacee Amos who is the Owner of SEEK-Consultants, an advertising and branding firm. The goal was to capture the essence of a loyalty program, what it entails and how it can work for any brand.

 Q:         How do you define loyalty marketing?

A:            Loyalty marketing can be defined as a program that helps a company retain and expand their existing customer base by identifying the purchasing habits, preferences and then translating that data into relevant incentives to increase sales.

 Q:         What is a successful loyalty program?

A:         You must keep it simple and sweet or “KISS.” A successful loyalty program offers: (1) a clear list of expectations, (2) valuable rewards/perks that are relevant to its members’ needs and (3) attracts new customers with compelling opportunities that are only provided through the program.

 Q:         How does one start a loyalty program?

A:         A few top-line points in starting a loyalty program.

•          Get to know your customers intimately. Try to gather enough information during enrollment to learn about their preferences, which will in turn allow you to define their needs, wants and wishes. After all, the program is all about them.

•          If you can offer multiple points of communication, find out how they prefer to be contacted (online, direct mail, social media, mobile, etc.) and how often (1x a day, 1x a week, 1x a month). This investment will keep loyalty customers engaged on their terms, and allow your business to better understand what methods and promotions are working best.

•            Tracking. A loyalty program must have a tracking component within each communication. Implement an online tracking code, personalized URL (PURL), vanity phone number or bar code within all communications to determine what works and what needs improvement.

 Q:         What types of rewards are appropriate in loyalty programs?

A:         In most cases, the bargain hunters are not loyal customers. Ideally, your loyalty program will have rewards based more on products and less on discounts. If you are a restaurant, consider offering members one of your most popular or newest appetizers the next time they dine in. Or, if you are an online or retail store, offer an exclusive opportunity to purchase new products prior to the general public. Reward your loyal customers with your product as the incentive, not a discount. These customers become “loyal” over time by choosing your brand over price.

 Q:         And lastly, how do you sustain a loyalty program?

A:            Sustaining a loyalty program is simple if you continually support your existing customers with relevant promotional opportunities, entice new customers with members-only rewards and consistently track all communications; ensuring you target the right person, with the right message and at the right time.

  To learn more about the benefits of loyalty marketing, or discuss ways to get started using transactional data to increase sales, contact a Prisma Sales Representative, or Chad Carmody at 800 379-5777 or   chadc@prismagraphic.com.

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