Loyalty
Marketing Newsletter Ernex brings you an online newsletter based on loyalty marketing concepts, trends,
and insight, published once every three months.
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.