Vantage Blog

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26
May
2010

True loyalty: beyond the loyalty program

This article was also published on http://www.marketingmag.com.au/blogs/view/true-loyalty-beyond-the-loyalty-program-2144 These customers will usually earn more rewards points when they shop, receive exclusive invites to store openings, get regular email offers to buy the latest range and even get a ‘personalised’ letter from the MD each year.


But does this mean they’re really loyal? While they may very well spend more (it’s the reason they’re in the top group after all), retention, satisfaction and engagement ratings may not be increasing over time.

No matter how good your loyalty program is, your business won’t be able to maintain customer loyalty if you’re getting it wrong somewhere else. Give the following areas of your business the once over to make sure you’re not alienating your customers and undermining your hardworking loyalty program.

Customer feedback Truly listen to what your customers are saying about your brand and make sure you turn their requests around quickly, paying particular attention to your best customers because these are the people who can tell you what makes them spend. Thanks to social media platforms, there’s really no excuse for not listening to customer feedback. Blogs, Facebook and Twitter provide businesses with the ability to engage with customers in a meaningful way. The catch is that you must be willing to truly engage and not try and control what goes on. Your best customers will normally want to talk with you and this can become an amazing resource for gathering knowledge, ideas and even building advocacy. When managed properly, this two-way communication can become a key loyalty driver in its own right.

Staff retention and satisfaction There is strong evidence that increased staff satisfaction improves customer satisfaction and then sales. According to US retailer Sears, a 5% increase in staff attitude delivered a 1-3% increase in positive customer satisfaction which resulted in a half-a-percent increase in revenue. It’s not just compelling, it’s common sense – happy staff will engender a better selling environment and customers will feel welcome to buy from you.

Sales techniques How do your staff engage with customers? Are they trying to serve or put on the hard sell? A robotic ‘do you want fries with that’ is a real turn off and a clear sign that you are just selling not serving. From the outset staff need to ensure they are meeting the core needs of the customer in a personable manner, otherwise they won’t ever be in a position to sell. Serve first, sell second.

Call centre Long wait times, complex IVR and offshore call centres are all ways you have reduced costs and ‘encouraged’ customers to go online but they’re also great reasons to boycott a brand. Smart cost strategy… not smart service, especially for your top customers. In designing your loyalty strategy you need to consider all customer touch points and make the customer experience consistent and enjoyable.

Loyalty is not just about loyalty programs. In fact, loyalty programs are mostly about rewarding spending and giving you a structure to capture and analyse data. From that point you can attempt to influence behaviour. True loyalty should be an organisational strategy that’s central to what you do each and every day.

This article was also published on http://www.marketingmag.com.au/blogs/view/true-loyalty-beyond-the-loyalty-program-2144 These customers will usually earn more rewards points when they shop, receive exclusive invites to store openings, get regular email offers to buy the latest range and even get a ‘personalised’ letter from the MD each year. ..

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24
May
2010

Use It Or Lose It

This article was also published on http://www.marketingmag.com.au/blogs/view/use-it-or-lose-it-loyalty-data-2068 
So you’ve put a loyalty program in place to reward your best customers and drive sales. Before implementing the program you did all your homework: researching what your customers want, structuring loyalty tiers to reflect natural profitability groups, setting up cost effective communication methods and you’re running regular promotions to drive sales. Despite all this, your business isn’t looking any healthier – sales haven’t increased and neither has the number of loyal customers on your database... Why you ask? The answer is in the data.


Too often organisations put a loyalty program in place and then sit back and expect it to work on its own without tailoring promotions to suit specific customer groups. A one size fits all promotion (double points today, triple points tomorrow) is the lazy man’s answer to loyalty marketing and it’s responsible for pulling this marketing tool’s name through the mud. When loyalty programs are set up and left to die they become nothing more than an extra cost of doing business.

The real value of a loyalty program is in the rich customer data you gain in setting them up. Tracking and analysing what your customers spend at a transactional level can transform not only your marketing, but many aspects of your business model.

Without a doubt, the exemplar in this field is Tesco in the United Kingdom. Tesco uses their loyalty data to drive the business by analysing the information provided by their customers to not only make targeted and highly relevant offers to quite small segmented customer groups, but to also develop the brand’s in-store design, product ranging and new products and services.

Tesco’s use of the data is a significant driver in what has made that brand the success it is today.

Whether you have a marketing budget comparable to Tesco or not, there’s four simple steps you can take to ensure your brand’s rewards program doesn’t end up in loyalty heaven:
  • Ensure you are able to access data at a transactional level. If you can’t, you’re missing out on a huge piece of potential value. If you’re not capturing it now, work out how you can. Right now. 

  • Run some basic segmentation and analysis. If you don’t have the ability to do this in-house find someone externally who does. Use the segmentation to focus on recency, frequency and monetary (RFM) and natural customer segments.
  • Start small and start by testing. Set up control groups based on ‘like customers’ and make different offers to see how they respond. This will help you to understand what drives sales very quickly.

  • Structure activities to fit in with your overall promotional plan and in line with any tiers that are part of the program structure. Ensure you schedule loyalty campaigns when you need sales and leverage other advertising or in-store activities. Loyalty campaigns are only part of how customers interact with you and therefore it needs to be seamless or it will look out of place and irrelevant.

And finally remember that true loyalty means rewarding customers across all parts of your business. A loyalty program is a great platform, but if your best customers aren’t experiencing great service when they’re in your store or on the phone then they will go elsewhere no matter how targeted and generous the sales offers and rewards are.

This article was also published on http://www.marketingmag.com.au/blogs/view/use-it-or-lose-it-loyalty-data-2068 
So you’ve put a loyalty program in place to reward your best customers and drive sales. Before implementing the program you did all your homework: researching what your customers want, structuring loyalty tiers to reflect natural profitability groups, setting up cost effective communication methods and you’re running regular promotions to drive sales. Despite all this, your business isn’t looking any healthier – sales haven’t increased and neither has the number of loyal customers on your database... Why you ask? The answer is in the data. ..


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