search
Loyalty & Stored-Value Card Solutions. Understand your customers. Influence their spending habits. Improve your overall marketing plan.

Ernex Update
June 2003
Volume 6, Issue 3
In this issue...
Feature Article
Five Critical Success Factors for Customer Loyalty - Years Three and Beyond

Special Report
Coast Hotels & Resorts Expands "Coast Select" Loyalty Program to the United States

Nuts N' Bolts
Future Trends in Loyalty & Gift...

What's New
New Client Announcement: Delta Hotels

Newsletter
Archives

Ernex Update e-Mail News

Ernex Update e-Mail NewsLoyalty Marketing Newsletter Ernex brings you an online newsletter based on loyalty marketing concepts, trends, and insight, published once every three months.

Sign Up Now



Feature Article - June 2003

Five Critical Success Factors for Customer Loyalty - Years Three and Beyond

Loyalty programs begin to mature in years three and beyond. Determining when your program "matures" will depend on a number of factors including the type of industry you are in, but it is safe to say that until you can start to look for year over year trends in data, it's not possible to assess important loyalty metrics like retention or your efforts to influence the behavior of loyalty program members. Once your loyalty program does begin to mature, there are more critical success factors that will help you stay focused and on track to maximize your investment. Here are five to consider:

Maximize the use of your loyalty information -
not just for your loyalty program

One of the top reasons businesses report wanting to create a loyalty program is to find out who their customers really are. Now that your loyalty program has built a customer profile, use it! Extend what you have learned about your best customers into your general marketing strategies. Program members will tell you where they live, when they shop, how old they are - it's all in the data. Use that data to not only communicate to your loyalty program members but also when planning your broader marketing initiatives.

Look at year over year performance data

It takes time to establish a baseline of performance within your loyalty program. Now that one is emerging, a way to stay focused on improving your program is to start paying attention to year over year performance data (and continue to do so on a regular basis).

Create differentiation within your loyalty program

Many loyalty programs have "tiers" which are established as the program matures. Most frequent flier and hotel programs have these characteristics. The loyalty rules within the different tiers of these programs can be very complex. The complexity is the result of many small changes within the program over time to treat specific customer segments within the loyalty program differently - the key is to make this complexity visible to loyalty members who are already familiar with the base program. As your program matures, consider tiering as a way to establish more value to more loyal members and to give them "performance targets" to strive for.

Cross Marketing can add even more value

If you have established a powerhouse of a loyalty program your marketing power extends beyond the walls of your business. Suppose you are running a theatre chain and that there is a restaurant chain that is almost always situated near your theatres. Adding value to your loyalty members, without affecting your business could be as simple as rewarding frequent movie goers with a restaurant offer (restaurant sponsored) or having the restaurant award and pay for loyalty points within your program when your members dine there. The key to any initiative like this is to protect your brand, and add value to your member at no cost or even a profit to you.

You are never done

Loyalty programs are living, breathing, beings. As long as they adapt, they never get old. Continually adjusting your program to address changes in your business, customers, and market trends will make it always relevant and valuable. Keeping up with these adjustments requires an ongoing commitment - one that pays off handsomely when executed well.




Related Articles and Links



Click to request information