It is an established fact that loyalty programs tend to roll out astonishing returns for companies that run them. Having said this, there is a plethora of options and strategies available today for brands looking to run loyalty programs, and not one single type is right for all brands. Brands often end up losing money due to their failure to approach and select the right loyalty program.
In this blog, we’ll cover three determining factors you should consider when establishing a loyalty program of your own:
Nothing beats consumer data when it comes to gaining insight into how to execute a loyalty program (or for that matter, any brand strategy). Being able to delve into a specific demographic’s needs and wants, understand everything about their shopping habits, and then being able to target them effectively is the best way to begin a loyalty initiative. A recent McKinsey research concluded that the executive teams that make extensive use of customer data analytics across all business decisions see a 126% profit improvement over companies that don’t.
What types of data metrics come into play? Factors such as demographics, lifestyle, products purchased by category and type, frequency of purchase and purchase value can really provide a good head start for the firms to select a right program.
How do you get the data? In addition to the data collection infrastructures already have in place, pop-up promotions and other one-off initiatives (especially if they utilize receipt processing) is the perfect way to get data on the consumers that will likely be participating in any future loyalty strategy.
Today, consumers not only in US but all over the world expect the flexibility of mobile platforms whenever they are engaging with brands. They expect the ability to access the responsive microsites, apps, or SMS, and to be constantly engaged and kept in the loop. Gone are those days when customers would carry around several loyalty cards in their pockets. Hence, to verify that a loyalty strategy is mobile-first, to avoid alienating modern consumers.
Kellogg’s Family Rewards, for example, now allows members to collect points by snapping and uploading images of receipts with their mobile devices – the receipt processing platform then automatically adds earned points to members’ Rewards accounts. This is to contrast the former system of requiring physical codes to be printed on pack, and then manually entered by the consumer.
A mobile-first attitude goes far beyond enhancing program mechanics. Orienting your brand towards technology creates organic loyalty amongst consumers, as they will be more prone to spread your program through word-of-mouth, tout it on social media, and bring their buying decisions to their friends, relatives, and colleagues.
Revamp Your Rewards
Loyalty programs thrive of points and perks. Consumers expect to be rewarded for their continued loyalty, and brands are earnest to satisfy their shoppers to keep them returning again and again. However, the rewards landscape is changing drastically. In the past, the rewards themselves mainly revolved around free merchandise or coupons. This approach no longer addresses the preferences of modern consumers; innovation in consumer incentives are blossoming, with numerous categories gaining traction, such as digital rewards, lifestyle options such as charity donations, mobile rewards such as data, and even “sharing economy” incentives such as Uber credits. What is the common thread behind these rewards innovations? They much more accurately reflect the preferences of today’s consumers, and they have inherent value that goes above and beyond mere discounting. Further, the high-perceived value and low actual cost of many of these reward types is easy on the budget and the bottom line for brands.
One caveat: it is tempting to throw everything in the mix when it comes to program set up, and offer consumers as much choice as they can handle with the reward options they can earn. However, brands must be extra careful to make sure that any rewards they are offering is in-line with their overall brand, and consumer perceptions of their brand. The right rewards have the capability to significantly bolster brand equity and image, just as the wrong rewards can cause harm to brand perceptions.
Marketing Coordinator at Snipp