In an age of thin retail profit margins, building customer loyalty is a key competitive differentiator. How best to build customer loyalty program to maximize your customer lifetime value.

1. (http://vertassets.blob.core.windows.net/image/e5fdde84/e5fdde84-de65-4d30-91ff-
0495b835427a/loyalty.jpg)
The Smart Way To Build Customer Loyalty
By Akbar Jaffer, VP of Marketing & Products, Social Annex
In an age of thin retail profit margins, building customer loyalty is a key competitive differentiator.
Over the past few years retailers and manufacturers of consumer goods have started paying much closer attention to the customer experience. Yet, ironically, one of the key
components to creating a positive customer experience, loyalty programs, is still subpar for many companies. In fact, studies conducted by RSR Research
(http://www.rsrresearch.com) revealed that:
Many retailers treat their loyalty programs as a “pay for customer data” relationship, yet few feel that they are making effective use of the data they collect.
Many retailers leverage trigger-based offers in their digital channels, but few can enable the same degree of personalization in stores.
There is very little coordination of customer interactions across available marketing channels.
Most retailers and consumer goods manufacturers understand that there is far more value to be had than their traditional loyalty programs — which reward customers only
for purchases and reaching milestones —can offer. Loyalty strategies that reward customers for taking social actions such as using social login, rating and reviewing
products, and sharing and referring customer programs can have a significant positive impact on the customer experience. Below are pitfalls that should be avoided and
advice that should be heeded by retailers and consumer goods manufacturers looking to build a more engaging customer loyalty program.
Avoid Application Silos
One of the pitfalls some companies fall into is focusing only on the immediate goal of the program, which is getting as many people to sign up — or follow them — as
possible. This shortsightedness often leads to poor software selection choices. For example, it may start with the purchase of a point-specific social media login app. A short
time later someone else in your organization will propose the idea that “we need to allow customers to engage with our brand,” which will lead to the purchase of a ratings
and reviews app, followed a short while later by a (separate) engagement-enhancing app like visual gallery.
The end result of taking a “There’s an app for that” strategy is silos of data and business processes that offer only a fragmented view of each customer. What’s more, using
disparate loyalty programs makes customers feel like the brick-and-mortar stores and the online store are run by two different companies, which puts a damper on the
customer experience.
Take A Long­Term View Of Customer Loyalty
A better way to create customer loyalty and deliver a positive customer experience is to consider all the ways your customers interact with your business and to find a
comprehensive solution that provides:
Login Services (including social login and single sign-on)
Sharing and Referrals (e.g. refer a friend; share, save, and win; and post purchase sharing)
User Generated Content (e.g. ratings and reviews, questions and answers)
Gamification
Contests
The reality is that not every retailer or manufacturer will need all the above features and functions, or they won’t need them all right away. It’s important when seeking a
comprehensive loyalty solution that you’re only paying for the features and functions you’re using, so you can grow into it over time.
Search
Article | June 22, 2015

2. WFM Is Conquering Real-
World Issues In Retail
(/doc/wfm-is-conquering-
real-world-issues-in-
retail-0001)
WFM: Stores Catching Up
With Technology
(/doc/wfm-stores-
catching-up-with-
technology-0001)
Best Practices Of
Shopping Mall Analytics
At Mandalay Bay
(/doc/best-practices-of-
shopping-mall-analytics-
at-mandalay-bay-0001)
What Retailers Need To
Know About The ACA
(/doc/key-provisions-of-
the-aca-and-the-
environment-they-ve-
created-0001)
Another important point to consider is that sometimes a retailer or manufacturer doesn’t have a staff of IT and marketing experts on hand who can collaborate and develop
the best loyalty strategy for their business. In addition to seeking out a comprehensive solution, consider working with a customer loyalty expert who can help you evaluate
your business needs and provide expert advice on the tools and services (professional and managed) you need.
A well-known healthy lifestyle retailer serves as an example of a company that recognized a need to strategically increase customer engagement, repeat purchases, and
customer lifetime value — without negatively impacting profitability. The retailer reached out to Social Annex who worked with the client’s ecommerce and marketing
teams to devise a loyalty strategy that included a points-based system that rewards customers for purchasing, sharing, and referring friends and family. Over a 10-month
period the retailer added more than 200,000 new members, its repeat purchase rate rose by 100 percent, and it realized a 10x return on its investment.
When the right loyalty solution and expert guidance come together, a customer loyalty program can generate a quick return on investment for the retailer or manufacturer
of consumer goods. And equally important, customers will have a better experience, too.
Bio
Akbar Jaffer is the Vice President of Marketing and Products at Social Annex (http://www.socialannex.com) (www.socialannex.com (http://www.socialannex.com)), a
customer loyalty and social commerce software vendor. Akbar has more than 15 years’ experience designing, developing, marketing, and selling enterprise software
products and services, and he has a proven track record of customer and revenue growth, market expansion, commercialization, product launch, and brand
management.
Recommended For You
(/doc/wfm-is-
(/doc/wfm-
stores-catching-up-with- (/doc/best-practices-of- (/doc/key-provisions-of-