- Posted by careers 23 Mar
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To continue in our series, kindly find below the next 5 major factors behind a successful loyalty program.
21. Geographical targeting for new branch / store locations:
Selecting a site for a new store is no longer a case of sticking a pin in a map, or choosing a site on a hunch. Thankfully, a loyalty program will enable you profile your best customers demographics – because it is often likely that the best prospective customers will have similar demographics – choose new locations much more accurately. In addition, a loyalty program will aid in capturing addresses of new and existing customers, they can be plotted geographically and sites can be chosen where there are outlying pockets of customers or gaps in coverage.
22. Promoting the brand to build customer loyalty:
Every business must develop and deliver a consistently branded experience for its customers. The essence of the brand should be apparent in every interaction a customer has with the company, enabling customers to form an emotional attachment with the brand. This includes: training and enabling front-line employees who interact with customers; developing high-impact marketing campaigns; defining the brand’s “promise”; and segmenting customers on the basis of value. The loyalty programme provides a truly multi-channel vehicle through which to communicate this brand experience, and through which the consumer can become more attached to the company and its brand.
23. Rapid market penetration with a coalition programme:
Partnership in a coalition loyalty programme is often thought of (quite rightly) as a quick method of entry into the field of customer loyalty – however, there are disadvantages that must be weighed up first, such as the ownership and usage of loyalty programme and customer-specific data, and potential competition of other programme partners in future markets you plan to expand into. Successful coalition programmes have a major partner in several of the key consumer sectors in order to quickly capture a significant proportion of consumers’ spend. Ideally, this would be a major grocer, fuel retailer, bank or credit card, department store, and mobile telecoms provider. Proportions as high 50% – 60% of the target market can be enrolled very quickly. This means that not only is the data collected more representative of the target market but that the share of each consumer’s wallet is also maximised. Most importantly, new partners joining the programme after it becomes established will automatically gain the same degree of market penetration as the existing partners, and co-marketing activities with the programme’s operator will usually raise consumer awareness rapidly.
24. Successful CRM (customer relationship management):
The loyalty of customers stems from building relationships with them, and those relationships have to managed. This is where CRM comes in. Whether the relationships are so finely tuned as to be one-to-one relationships, or whether they are in bigger segments or groups, the principles of management are similar. Over the past decade CRM has come to be regarded by many marketers as being synonymous with huge, costly IT systems. But many of the big companies have now passed through that stage, and are focusing more on explaining to both employees and customers the benefits of the system, and streamlining the laborious processes of data collection. CRM’s reputation is improving – it is making a come-back. Some of the key faults that can cause CRM projects to fail or prevent delivery of the expected ROI are a reliance on technology as a global ‘cure-all’ and down-playing the importance of management level buy-in. But having the correct focus and commitment can significantly improve a CRM initiative’s performance. According to IBM’s research, CRM should be run at the corporate level or with a cross-functional perspective – and when this is the case, there is a 25-60% greater chance of success.
25. Using gift cards, vouchers and store value cards for loyalty:
The market for gift cards – many of which are pre-paid, stored value cards – is expanding rapidly. Clearly, the card is the mechanic: what is done with it determines how useful it is as a vehicle for building loyalty to the retailer. Copious research has been carried out to show the potential of the gift card market. Gift cards have been widely used in the US for longer than in other parts of the world, but the popularity is now beginning to spread. Gift card merchants can use different types of promotions to increase the level of excitement. For example, creating a swipe and win sweepstake when the gift card is redeemed is an excellent way to drive additional sales. Another opportunity that can benefit both the merchant and the customer is the use of receipt coupons, or custom coupons, as part of a gift card programme. And if something can be offered that is difficult to put a price on – priority service, a vip treatment, a ticket upgrade, front row seats at concerts – there is an opportunity to create ‘extreme perceived value’. All of these are gift card-based ways of generating renewed consumer engagement.
Kindly note that next week, we will share with you the last 5 factors behind a successful loyalty program and we sincerely hope that you have found our newsletter useful in your businesses.