Be Different or be dead

January 26, 2012

5 simple ways to build the best marketing loyalty program

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5 simple ways to build the best marketing loyalty program.

Most marketing loyalty programs are the same. Points are acquired for purchases and they can be redeemed for a variety of things: another product or service, travel and so on.

Most loyalty programs lack the marketing juice that make them memorable. Every program is the same. Boring-ness pervades.

The intent is to bind the customer to a specific organization forever; to provide them with so much additional value that they will never be enticed by another provider to leave.

Some loyalty programs are more effective than others but the one ingredient that seems to be missing in many of them is marketing juice — the treatment that is normally given to products and services to make them unique and to make them stand out from the competition.

Here are some ways to inject ‘the juice’ in your loyalty program:

1. Be relevant — A loyalty program should be relevant, something your customers care about. I know it sounds trite, but generally some marketing analyst decides what rewards define the program without an extensive amount of individual customer research.
In fact most of the time the program reward portfolio is determined by what the organization wants to supply (based largely on economics and logistics) as opposed to reflecting their customers’ demand profile.

Furthermore, most loyalty initiatives are based on mass market one-size-fits-all considerations rather than a more personalized approach. What drives loyalty is most often a personal motivation: what makes one person loyal to an organization doesn’t make any impact at all on another.

Build your loyalty program on the principle of personalization. Discover the secrets of your target customer group and construct the elements of the program around them.
Remember if you treat your program as something for the masses, it won’t be for anyone.

2. Be unique — A loyalty program should be unique, something your target customers can ONLY get from you. And if you do a good job to define specifically what your customers desire as hooks for their loyalty, you will end up with something very close to being unmatched in the market because most others will be building their programs on mass market needs.

If you can’t make your program special in some exciting way, don’t do it. Doing the same thing as everyone else will diminish its value to the point of making it worthless.
As an expression of your program’s uniqueness, develop an ONLY statement for it using the framework I discussed elsewhere. Remember to be as specific as you can; the things that your program has (that other programs don’t have) must jump out at you when you read it.

‘Our loyalty program is the ONLY one that….’

This is the most effective claim that makes it easy to explain what your program is all about to customers and to make explicit how your program is different from the competition — YOU become the benchmark for others to follow.

3. Be targeted — Tailor your program around your top customers. They are the ones who probably create a disproportionate amount of wealth for your organization and who should be the first ones in line to reap the benefits for their loyalty. Again, stay away from thinking what ALL of your customers want; reserve your loyalty investment for the special ones.

Consider providing greater benefits to those who have been with you the longest. Someone who has been with you for 10 years is worth more than someone who has been loyal for 2 years.

Success is measured by retention rates in your high value customer groups not by its attractiveness to your entire customer base, so make sure you can track how well it resonates there. In fact if it appeals to a broad base of customers it’s a symptom that the program design is flawed.

4. Be myopic — Let your special customers guide the design of your program; base it on what they are telling you rather than by what your competitors are doing. Their programs might work for them, but they won’t likely work for you.
In fact, avoid benchmarking other plans completely if you want to do something remarkable.
You know by now I am absolutely against copying what others do and tagging your actions as innovative and it applies here unless you want to be contrarian and go in the opposite direction of the herd.

Be open — Before launch, test the plan design with your target customer group and be prepared to modify it on the basis of their feedback. If your program doesn’t address their high priority wants and desires it will fail, dragging your investment under water.

Rather than go the traditional hard core quantitative route, I suggest using focus groups as the way to get customer input.

It’s a more informal setting that, in my experience, is much more effective in deciding on whether your proposed program hits the mark or not. Plus, it’s a great way to gather more insights — secrets — on the special ones you’ve invited.

And btw, they love to be asked and they love to help.

If you want to be unique in the loyalty program space, just ask your reward recipients how you can make your program better

5. Be engaging — The communications strategy for your program should be based on continual customer engagement. It’s important that your customers are kept up to speed on the details of the program, their rewards status and the new rewards opportunities available to them.

Invite them to respond with how well they are liking your program — does it continue to be relevant to what they care about? — and with any suggestions they have to improve it.

Because you’ve designed your program to be more personal to the individual, it’s critical that you have a stream of feedback on whether you’re hitting the mark.

It’s interesting to me that even though there are thousands of loyalty programs being offered in the market, I’ve never once been asked to provide feedback or ideas to make them more personal for me.

How about providing loyalty club members a dedicated communications channel — phone, email or whatever — only for them to connect with your organization when they need to. Simple. Easy. Impressive. Different.

Cheers,
Roy
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• Posted 1.26.12 at 01:04 pm by Roy Osing
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