The loyalist: leveraging relationshipswith existing customers to increase ROIData analysis and best practices for email marketerslooking to engage existing customersAn Experian white paper
She iS eaSy to pleaSe.Call her by another name andShe’ll quiCkly turn to another.
The loyalist Why customer loyalty matters it’s no secret that a large percentage of a businesses revenue comes from existing customers and that new customers are expensive to secure. it will always be important to acquire new customers, but to promote up-sell and cross-sell opportunities, build brand advocacy, and maximize long-term sales, businesses today also need to leverage relationships with existing customers and focus on programs that encourage customer loyalty. Surprisingly, in a recent experian qaS study, only half of the respondents stated that their organization has a customer loyalty program. however, 63 percent of organizations were found to track the lifetime value of each customer, and 72 percent see the value of those customers increasing over time. tap into this powerful revenue stream by creating effective email campaigns that empower customers to become vocal brand advocates and deliver a strong return on investment. Gaining deep consumer insight and combining this knowledge with email trend data and best practices can significantly improve customer engagement through loyalty-based email marketing. this paper covers loyalty-based consumer trends, email benchmark information and data-driven tips for marketers across industries.page 4 | the loyalist: leveraging relationships with existing customers to increase roi
The loyalistmost consumers today are not as brand-loyal as they were in the pastrecent changes in consumer buying attitudes have forced businesses torethink targeted-marketing strategies over the past couple of years. brandloyalty has diminished based on economic circumstances and the transparencyof the internet, making it easier to comparison shop. Given today’s competitiveenvironment where even the most loyal consumers are likely to stray — marketersmust work smarter to develop points and rewards programs that motivate andencourage customers to remain.points remain more important for credit card users than airline orhotel affiliationpoints are actually a more attractive incentive to consumers than some marketersmay expect. the most popular types of credit card affiliation among u.S. adultsare for points (18 percent) and cash-back (16 percent), whereas airline (6 percent)and hotel (2 percent) affiliations are less prevalent. percent of u.S. adults by major credit card affiliation/sponsorship 25% 20% 15% 10% 5% 0% 09 6/ 9 9 /0 09 9 9 /0 10 0 10 05 010 06 010 07 010 08 010 09 010 10 08 /200 09 200 11 200 01 200 03 201 20 20 20 20 20 2 2 2 2 2 6/ 6/ 6/ 6/ 6/ 6/ 6/ 6/ 6/ 6/ 6/ 6/ 6/ 06 /0 /0 /0 /0 /0 /0 /0 /0 /0 /0 /0 /0 /07 10 12 02 04 Points Cash back Airline affiliation Hotel affiliationSource: Experian Simmons An Experian white paper | Page 5
She iS partiCular. She iS faithful. She doeSn’t like ChanGe.Stop GivinG her What She WantS,and She Will quiCkly turn to another.
The loyalistemail can play an important role in optimizing customer loyaltyby leveraging email to communicate with loyalty members, your business canbenefit from extensive opportunities for enhanced customer relations andgenerate increased revenue.many loyalty-focused campaigns span the entire customer life cycle, from theinitial entry to program renewal notifications and reminder messages. they alsotend to perform better than standard promotional mailings in terms of customerresponse and revenue.emails targeted to current loyalty program members outperform bulkpromotion mailingsin comparison to bulk campaigns, emails targeted to current loyalty programmembers have 40 percent higher open rates; 22 percent higher click rates;and transaction rates and revenue per email that are 29 percent and 11 percenthigher, correspondingly. loyalty mailings generate higher transaction rates and revenue per email 0.10% $0.19 0.09% 0.08% $0.18 0.07% $0.18 Transaction rate 0.06% $0.17 $0.17 0.04% $0.16 0.02% 0.00% $0.15 Loyalty Non-loyalty promotional mailings Revenue per emailSource: Experian CheetahMail An Experian white paper | Page 7
The loyalist loyalty mailings boost open rates by 40 percent and click rates by 22 percent 30% 27.4% 25% 20% 19.6% 15% 10% 5% 4.0% 3.2% 0% Total opens Total clicks Loyalty Non-loyalty promotion mailings Source: Experian CheetahMail loyalty programs engage prospects mailings targeting prospects with an invitation to join a loyalty program tend to outperform the promotional mailings for the same businesses with a 28 percent lift in transaction rates and 25 percent higher revenue per email.page 8 | the loyalist: leveraging relationships with existing customers to increase roi
The loyalist Sending loyalty mailings to prospects also boosts transaction rates and revenue per email 0.10% $0.22 0.09% $0.21 0.08% $0.20 0.07% Transaction rate 0.06% $0.18 $0.17 0.04% $0.16 0.02% $0.14 0.00% $0.12 Prospects Non-loyalty promotional mailings Revenue per emailSource: Experian CheetahMailmany types of loyalty programs perform wellloyalty programs provide a unique opportunity to have an ongoing dialogue withyour most highly engaged customers and brand enthusiasts.Today’s savvy marketers leverage the low cost and effectiveness of emailby deploying a variety of loyalty-based email communications. An Experian white paper | Page 9
The loyalist listed below are nine mailing types that collectively provide a platform for achieving high loyalty program results. many types of loyalty mailings have high open and click rates 140% 126.4% Total opens 120% Total clicks 100% 80% 58.5% 60% 56.1% 53.6% 51.1% 50.0% 49.7% 40% 30.7% 26.2% 19.0% 20% 11.2% 12.4% 11.4% 9.7% 9.0% 6.5% 7.9% 3.5% 0% in ion io lty ey l al ts e s ve riv rd m ew r ns rv w en ot ya de m t ar wa -le al co re mp ne Su om Lo N em us Re el Re de W at at Re St St pr loyalty mailings provide opportunities for outstanding transaction rates and revenue per email 1.6% $8.00 1.4% Transaction rate 1.4% $7.00 Revenue per email 1.2% $6.00 1.0% $6.81 $5.00 0.9% 0.8% $3.86 0.8% 0.7% $4.00 0.6% 0.6% $3.00 0.5% 0.4% 0.4% $2.00 $1.26 $1.82 $1.60 $1.62 0.2% $1.00 0.1% 0.1% $0.80 $0.17 $0.11 0.0% $0.00 in on s ts ey e al io ty l riv rd ve ew m r ns al en w ot yal rv de m ti ar wa co -le ne re mp N Su em om Lo Re el us Re de W at at Re St St pr Source: Experian CheetahMailpage 10 | the loyalist: leveraging relationships with existing customers to increase roi
he iS devoted. he iS Sharp. he preferS routine.keep your end of the barGain,and he’ll never Stray.
The loyalist promotional loyalty mailings Clean, simple designs with clear short messages work well for promotional mailings. Website navigation Clear rewards benefits online account informaitonpage 12 | the loyalist: leveraging relationships with existing customers to increase roi
The loyalistnewslettersnewsletters work as a means of providing offers, membership information andhighlights of upcoming events.redemption remindersWith average revenue per email of $1.26, redemption reminders are clearlyworthwhile ways to remind members to redeem their miles or points, keep theminformed of other offers and note other program benefits. delta nicely highlightsthe benefits of redemption and includes partner offers as part of this email. Website navigation and links to account information redemption instructions and a second link to redeem extra benefits for redemtion and a clear link to redeem related offers An Experian white paper | Page 13
The loyalist Statements Statements can be the heart of a good loyalty program, with double the open rates and 10 times the revenue per email of loyalty promotional mailings. it is a best practice to provide clearly defined account information, reward or point value or certificates earned, as well as new offers to continue to engage your members. reward arrival members like receiving rewards. on average, emails announcing reward arrivals have the best performance of any loyalty mailing type, with five times the open rate and 15 times the transaction rate of loyalty promotional mailings. Website link multichannel benefits: rewards can be redeemed in-store, online or through the catalog Surveys loyalty members can be great resources for obtaining valuable customer feedback on products and services, as well as opinions on new products or proposed events. Surveys are second only to reward arrival mailings in performance, with double the open rate, three times the click rate and nine times the transaction rate of promotional loyalty mailings.page 14 | the loyalist: leveraging relationships with existing customers to increase roi
The loyalistfollowing proven best practices can significantly deepen customerengagement through loyalty-based email marketingengage loyalty members throughout their life cyclea good loyalty program is more than a simple sign-up and special offer. fromthe initial welcome campaign on, there are a number of triggers, such asredemption reminders, reward arrivals, status and renewals, related to loyaltyactivity when brands can engage with members. the loyalty messaging canalso be incorporated dynamically into all other email communications, includingpromotional emails, newsletters, monthly statements and surveys to enhancemember engagement with your brand.Clearly present account informationenhance your members’ experience by prominently including account detailsand defining member benefits on statements, particularly the loyalty number.account links can also be placed on other types of loyalty mailings to reinforcethe benefits of your program.include offersaccount management emails do not need to be limited to text. including htmloffers in mailing types such as statements, renewals and status changes canprovide effective ways to increase brand awareness and generate transactions.Clearly communicate program benefitsto remain active in your loyalty program, members need to understand, and beable to take advantage of, the benefits of the program. make reward benefits clearin all of your loyalty communications as well as including reminders in your mainemail communications, so that your members perceive the special attention andreward values that will keep them committed to your brand.ConclusionCreating a successful customer loyalty campaign can be challenging,especially as consumers engage with new technology and competition stiffensacross industries. to move marketing forward, overcome today’s obstacles andbuild programs that are worthwhile to your customers as well as your business,and remember to strategically incorporate data analysis and key trends into yourloyalty-based marketing strategies. arming yourself with the right data andexpertise will deepen customer engagement and increase roi now and intothe future.Email data in this report was collected by Experian CheetahMail, based on the email campaign performance of 80 clientswith loyalty email programs from January of 2009 through June of 2010. Over 5,600 transactional emails were comparedto the bulk campaigns by client for the same time period. An Experian white paper | Page 15