Vantage Blog

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29
Jul
2011

What’s brand got to do with it?...aligning loyalty and brand

Why are so many loyalty programs like the proverbial shag on a rock?  They seem to sit isolated from the core brand offering.  In many cases they actively work against what you are trying to achieve.


Loyalty and reward offerings should be building brand equity not dragging it down.

In many cases it’s due to reward or loyalty programs merely being a competitive response.  They’ve got one so we should too.  They have built a loyalty program rather than developed a loyalty strategy – a key distinction.

The loyalty offering isn’t grounded in the brand, or structured to reward and drive the right sort of behaviour.

  And they end up becoming a drag on the business to the point where you’re trying to work out how to reduce their cost rather than reward and influence customer behaviour.

Yes, you should keep an eye on what your competitors are up to in so far as it affects your brand and business.  But having a loyalty program or not is a business decision based on the return it can deliver and how it fits with your overall loyalty strategy.  And like any such major initiative it needs to be properly designed, costed and delivered so as to build brand equity.

If you aren’t too sure if your loyalty program is aligned to your brand I suggest you ask yourself some simple questions:
  1. How does is it look and feel?  If you took the branding off your loyalty program would customers pick it as part of your offering…or at least ascribe similar brand values? Is the core of the program the core of your brand? Are you giving cheap key rings for a luxury car brand?  Extreme adventure holidays for a credit card that targets over 50’s?  (yes, real examples!).  Whilst coalition programs (like Fly Buys and shopping centre cards) are a great way to deliver rewards in a cost effective way they are very difficult for individual businesses to tailor a specific brand experience.
  2. What do customers have to do?  Is there a base level of involvement that just says thanks?  Uncomplicated, easy to understand and attractive to initially join.  It makes sense to enable your customers to engage at a base level – and be seduced, and then rewarded, the more they buy from you.  Charging customers a joining fee – even a small one like Just Jeans do – seems an unusual way to entice customers to engage.
  3. What is the reward experience? Do you control the reward offering?  Does it reinforce your core proposition and bring customers back to you? Is it achievable?  If the reward currency is controlled by another – like frequent flyer points - you have no control over a large component of the experience.   Frequent flyer programs like Qantas have great pull and can deliver real customer value (when played right) but you have traded that for control of the brand experience.  Just remember your best customers are now being rewarded by someone else’s …no seats available=damage to your business.


Finally if you are contemplating following your competition into this space there is one question you have to be very clear on. 

What does your brand stand for, and what part can loyalty play in that?

If you can’t answer that in a clear and compelling way – don’t start – you will be wasting your money and just feeding another shag on a rock!

Why are so many loyalty programs like the proverbial shag on a rock?  They seem to sit isolated from the core brand offering.  In many cases they actively work against what you are trying to achieve. ..

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20
Jun
2011

Gathering a loyal following - Smart Company

Was recently asked to comment on engendering loyalty for Smart Company....


"James Atkins, Vantage Marketing director, says a loyalty program needs to be something that the customer wants to be part of. "It needs to excite and motivate them so it becomes a discussion piece with their friends. Have new elements, offers and events that give a real buzz to what you are doing. But remember, it needs to be in line with your brand, and fun."

Was recently asked to comment on engendering loyalty for Smart Company....
 ..

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03
Dec
2010

Disloyalty: are you game to encourage it?

I read recently of a unique marketing approach by Gwilym Davies who is the current World Barista Champion.  Basically he gives you a card and encourages you to try out his competition.  Buy eight coffees from eight identified quality coffee places in East London and when you present the completed card you’ll get a free coffee.


Not only has he tapped into the experiential coffee culture where it is increasingly being marketed like wine, but he is confidently saying his coffee is one of the leading brands.  He is also subtly saying “try out my competitors and then finish with the best”!

Got me thinking…how many businesses here in Australia would be willing to put themselves to such a test? Instead of enticing customers to “buy 2 and get the 3rd at 50% off” they encouraged their customers to try out the competition and be rewarded for it! 

Gwilym is obviously passionate about his craft and his business.  He is willing to put his reputation on the line and also engage in a meaningful conversation with well informed customers – no doubt they give him lots of useful feedback when they come to redeem their cup. 

And, of course, this is a savvy PR stunt as well.  Like all effective marketing it is working on more than one level. A crazy idea? Possibly.  But can it act as a challenge to your offering?

If you immediately recoil why is that?  Is it because you are worried that your customers will not come back?  Is your point of difference, in fact, illusory?

We are all passionate about our businesses and our brands – or we should be!  But quite often we are blinded to the fact that the widget we offer is no different to the one down the road. 

During some downtime (hopefully!) over Christmas I implore you to really consider:
  • Am I any different to my competition? 
  • Why would someone buy from me and not them?
  • How can I develop, refine or as in the case of Gwilym, turbo charge my point of difference?
Easy to do? No. 

Worth it in the long run?  Without doubt!

I read recently of a unique marketing approach by Gwilym Davies who is the current World Barista Champion.  Basically he gives you a card and encourages you to try out his competition.  Buy eight coffees from eight identified quality coffee places in East London and when you present the completed card you’ll get a free coffee. ..

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16
Oct
2010

Converting rewards into sales: how to use your loyalty program to drive sales

This article was also published at marketing mag online
Across the country there are thousands of unloved loyalty programs ticking away adding cost to business’s P&L’s whilst racking up potentially huge liabilities on balance sheets.


Why?  Because marketers haven’t worked out how to drive sales from this asset they so lovingly developed. At best your customers bought into the original proposition of the loyalty program – excited by the chance of getting some real rewards for shopping with you. At worst they took a card just to stop your sales staff harassing them. 

But, you protest, customers are using their cards.  Is it because your efficient sales staff prompt them every time they front up to purchase?  Are they just playing the game of building points or earning future discounts without even thinking about it?  If so that’s a real problem.  All that has been added to your business is a cost line and no extra sales or margin have resulted.

They aren’t being incentivised to change their behaviour by exciting and motivating promotions.

However you now have a valuable asset - whether you know it or not. Assuming the overall structure of your program is right for your business (that’s the topic for a blog another day!) its time to drive sales.

1.       Don’t treat your loyalty program as an island.  It should be a key contributor (and hopefully over time a driver) of your sales growth.  Don’t leave your loyalty program isolated – develop a fully integrated plan that includes all marketing components.  I’m still amazed by some retailers who sign up for issuing loyalty points with various cards and programs, promote it via email and direct mail but you wouldn’t know they were a partner when you walked their aisles!

2.       Leverage other promotions and seasonal activities.  You wouldn’t advertise your door stopping 50% off sale on TV and then not back it up with point of sale, so make sure your loyalty program members know about it too.  Better still tell them first…and provide them with an opportunity to take advantage of the offer before everyone else.

3.       Make members feel special.  Ensure there are special offers only for loyalty members – they are (or should be) your best customers and therefore treat them accordingly.

4.       Make offers realistic and attainable.  Not all customers are created equal or for that matter can behave equally.  This is where your data should come in.  It is the most valuable aspect of your loyalty program and together with simple segmentation based on disctinct customer groups can really start to drive sales.  Focus on average spend, return visits, cross shopping – the aim being to gain greater share of wallet

5.       Have some fun.  Shopping should be fun – even if for business goods!  People want to enjoy themselves and smile even if time is short.  So why are so many loyalty programs so earnest?   Differentiate your loyalty program, and your business, by creating a buzz.   Make is a discussion piece - utilise social media sites like Facebook to get customers sharing and talking about you.  Regularly introduce new elements, offers and events that your members want and will talk about – it needs to be fun!

Remember though to start small and test, test ,test.  Some things will work, other won’t…that’s fine as long as you’re learning. 

 And, if you’re listening hard enough, your customers will make it very clear how to get them to spend more with you and less with your competitors.

This article was also published at marketing mag online
Across the country there are thousands of unloved loyalty programs ticking away adding cost to business’s P&L’s whilst racking up potentially huge liabilities on balance sheets. ..

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09
Jul
2010

Making it easier: taking the pain out of being loyal.

This article was also published at marketingmag online
Most reward or loyalty programs make it easy to rack up points, dollars or discounts.  Presenting customers with a plethora of weird and wonderful opportunities to earn currency in their program is normally their main focus.   


However when it time comes to make good on the promise they put up all sorts of hurdles and barriers.     

You know what I mean…
  • The rewards are a pittance.  The value is just not there.  A recent Choice survey found that for every $100 spent at the big supermarkets, customers earned as little $1 in rewards.  Bonus offers can bulk this up but do you know how your customers value the reward?
  • Customers are charged $’s or points if they dare to call to redeem (probably because the online redemption is just too hard!).
  • Blackouts mean you can’t redeem for certain products or during specific times that suit you.
  • There’s minimum redemption or transfer hurdles (a real favourite of card companies who are trying to divert you from high cost frequent flyer points!)
  • Points expire before you have enough time to reach that hurdle – feels you’re caught in a revolving door!


 A real pain. Who are they there to benefit?  Definitely not the customer.  

All these (and many other) restrictions were no doubt dreamed up by the CFO desperately trying to reduce the cost of what may well have become a legacy to the business.  Unfortunately these organisations either don’t know the value of their program (from a customer lifetime value perspective) or the program is a dud.  It needs a total redesign – a ground up restructuring aimed at truly capturing customers’ loyalty.  

So what if you took the opposite tack and made it EASIER?  Easier to enjoy the fruits of their loyalty.   Here’s a few thoughts…
  • Deliver real value.  Baked in.  Make sure customers can see and regularly experience the value of your program. 
  • No hurdles, no minimums, no time periods.  Your currency is able to be used as part or full payment.  The points+pay components of card and frequent flyer programs are examples but in most cases the total outlay doesn’t stack up.  Customers can spot a con when they see one!
  • Whenever, wherever.  Want to redeem online? Sure. On the phone?  Our pleasure. In store?  Definitely.   In fact encourage it in store. This will drive sales and reinforce the virtuous loyalty circle.
  • Encourage regular redemption – it will drive increased frequency and thus sales.  Don’t make them wait.  Myer are great at this in part due to their quarterly gift card redemption mail outs.
  • Surprise them - out of the blue.  Make offers at the point of sale to both earn and redeem. Bonus redemption offers at point of sale are a fantastic way to not only bring a smile to a customer’s face but to drive incremental sales. 
  • Don’t forget to thank them – recognise their value to you in a real and, as far possible, personal way.


And finally make the program free – no joining fee, no annual fee, no fees at all.   

Whilst no doubt the cash injection to your P&L looks good in isolation you have to wonder about the logic of charging someone to be loyal to you?  Shouldn’t it be the other way around?  If you have to charge fees and impose restrictions to make the program stack up then the design is all wrong.  You need to start again…and start with the customer front and centre.  

 Surely we should be making it easier for customers…not harder?

This article was also published at marketingmag online
Most reward or loyalty programs make it easy to rack up points, dollars or discounts.  Presenting customers with a plethora of weird and wonderful opportunities to earn currency in their program is normally their main focus.    ..


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