Spring 2017 Q3 • 2021


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She says that too many brands are simply not viewing marketing as a complete system from acquisition to retention. “Traditionally, businesses tend to spend


a disproportionate amount of marketing budget on acquiring new customers rather than retaining existing customers,” Simpson explains. “We all know it costs more to attract new customers, yet brands are still behind the eight ball when it comes to retention marketing. The irony is that retention (loyalty) marketing can provide valuable insights to improve acquisition strategies and gain efficiencies, yet many brands don’t have a retention strategy at all.” The reasons for creating and executing a


loyalty or rewards program are obvious. First, loyal customers are repetitive customers. Second, they spend at least 33 percent more with your brand than new customers do and are 50 percent more likely to try a new product of yours. These loyal customers also tell their friends and colleagues about their favorite brands, which drives referral traffic and word-of-mouth marketing. Finally, as Simpson mentioned, it costs five times more to acquire new customers than it does to retain current ones. Of course, none of this means you should give up trying to acquire new customers and depend completely on the ones you have, but it certainly makes the case for keeping your rewards program up- to-date and relevant so that your best clients


don’t go wondering off elsewhere. Today, with so many brands offering rewards programs that deliver real value to customers, losing revenue because you don’t offer privileges, promos, and perks is a real threat. “In general, programs have evolved


d


from card-based programs focused mostly on transactions to fully integrated


ted


The irony is that retention (loyalty) marketing can provide valuable insights to improve acquisition strategies and gain efficiencies, yet many brands don’t have a retention strategy at all.


loyalty initiatives within the larger marketing ecosystem, where transactional and emotional loyalty are the focus,” says Shirley King, who has 15 years of loyalty program experience in various capacities with brands such as Kimpton Hotels and IHG Hotels and Resorts. “The loyalty program has always been a mechanism to deliver the outcome. Now, with the focus on experience and emotional loyalty, the transactional part is table stakes with an eye on leveraging all the integrated real-time data to elevate the experience and create brand love.” What data should you be evaluating?


King says that aside from the basics (contact info, communications preferences, and purchase history), the golden record of actionable data is information that supports hyperpersonalization and informs how customers are behaving across channels.


3 Avoid


As a s an


We


As a pecialist in retention and loyalty marketing,


Robyn Simpson has seen ple


enty of great marketing wher the boa loyalty progr


and more than a few misses. We asked her to identify ere brands are missing


the bo t in the area of brand y programs.


Not putting the customer first—Too often, brand loyalty programs are designed and driven to meet business objectives as opposed to being truly customer-centric. Loyalty programs by nature should be customer led, yet many brands fail to implement robust customer research or understand the voice of the customer before launching a program.


Being a copycat—As a result of the tendency for brands to outsource their loyalty program to an agency, there is a lack of innovation that leads to a gluttony of “me too” look- alike programs with little or no point of difference. It takes considerable resources and expertise to run a loyalty program in-house, but it offers the flexibility to innovate versus having to fit your program inside a prebuilt box. Without a point of difference, your program will not generate loyalty, and customers will jump to the next program to save $1.


Taking a short-term outlook—Start your program with a long-term strategic view and risk assessment. Successful loyalty programs must continue to innovate and, therefore, need to grow and change to meet changing customer expectations. Be sure to do complete risk assessments for your original loyalty program and for each modification to your program.


Common Mistakes to


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