Loyalty Marketing: Beyond the Plastic CardWhat Is It?Loyalty is a feeling of attachment that customers have towards a brand.Loyalty Marketing focuses on strengthening brand attachment toinfluence consumer behavior…one member at a time.Why Do It?The goal of Loyalty Marketing is to maximize the Lifetime Value of eachcustomer through increased member frequency, spend and retention. CARD-BASED LOYALTY PROGRAMS CAN BE A KEY COMPONENT OF A LOYALTY MARKETING STRATEGY 5
Why The Excitement and Urgency Around Loyalty Cards?
What’s Driving the Interest In Card-based Programs? • Revenue Potential o Loyalty club members visit more often, spend more and take greater ownership in the brand o It costs about 5-10 times more to acquire a new customer than to sell to an existing one o On average, current customers spend 67% more than new ones • Market Share Battles o More and more restaurant brands are launching some form of earned reward program and In the fight for customers, no one wants to fall behind o A loyal customer has less opportunity to visit competitors • Success Stories o Airlines, hotels, retailers and restaurants are crediting their loyalty programs for sales growthTHE QUESTION IS: How Many Consumers Are Willing to Pledge their “Loyalty” to Your Brand? 7
How Big Is the Pie and How Can You Reach Them? Consumers Broadcast + Print Branding and offers sent to a at Large general audience using mass media Potential eClub Members In-store + Email + Social Media News, benefits and offers sent to members, fans and followers Loyalty Prospects
Many are willing to ENGAGE, few are ready to COMMIT eClub Loyalty eClub eClub eClub Loyalty eClub eClub eClub eClub Together…Loyalty Programs and eClubs can provide a bridge across the varying member engagement levels
eClubs & Loyalty Card Programs – How Do They Relate?
Shared Member Traits + A Paired Data Opportunity DEMOGRAPHIC DATA A fondness for your brand • Email Address • Home store Medium to Heavy Usage • Birthday • Name • City, State, Zip Desire for rewards & discounts TRANSACTION DATA • Card Number Interest in News & Events • Check Amount • Points Earned • # of Visits • Lifetime Spend
eClub-based Loyalty Marketing eClubs target basic Triggered offers are Common trigger loyalty objectives designed to events include: promote program Welcome, Birthday • Engagement commitment and Anniversary • Transactions • Retention 12
Card-based Loyalty Marketing: 2 Primary Types Point-based Rewards Surprise & Delight Rewards Points earned based on spend and Focus is on instant ‘win’ and rewards frequency; can include varying levels rather than point accumulation of rewards based on point level Heavier emphasis on soft benefits & Push on driving incremental visits and recognition (event invites, VIP increasing frequency privileges) 13
Stand-alone Challenges for eClubs and Loyalty Programs eClub Only Loyalty Program Only - Limited group of available members - No escalating or accumulating rewards - No benefits without membership - Limited to demographic data capture - Most communication directly related to the Loyalty program - Maintaining engagement can be difficult - Limited social media reach 14
A Loyalty Program and eClub Working in Tandem Digital media used to Members swipe loyalty deliver relevant card or redeems eClub messaging and loyalty offer Behavioral and preference recruit new loyalty data stored for ongoing use members Ongoing mining analysis of data to better target loyalty members eClub segments
The 837 Club: Palm Restaurants Program At A GlanceLaunch Date October 1997Enrollment Method In restaurant or onlineReward System Points; earn one point for every dollar spentMember Approach 2-tier: email program and 837 club Program Integration Palm Mailing List (eClub) 837 Club (Loyalty Program)Messaging Welcome Message , Update Profile Message, Monthly 837 Club Welcome, Miss You Message (60 days after last Newsletter and promotional messages. Monthly transaction), Monthly Newsletter with 837 specials, messages include 837 only special & push for Promotional Emails conversionHard Benefits Birthday lobster certificate; variety of prizes including Palm Free appetizer on join (select campaigns only) certificates, gift cards to other vendors (Tiffany & Co, Neiman Marcus), travel excursionsSoft Benefits Event invites, menu specials, exclusive news Periodic special offers, special event invitationsExpiration & N/A Unused points expire 18 months from date of issue; mustRestrictions accumulate 500 lifetime points and have activity 6 months prior to birthday to receive birthday offer 17
The Bones Club: Smokey Bones Program At A Glance Launch Date August 2009 Enrollment Method Online Reward System Points; earn one point for every dollar spent Member Approach 2-tier: email program and Bones Club Program Integration Bones Club Lite (eClub) Bones Club (Loyalty Club) Welcome, Birthday and Anniversary, Bones Club Welcome, Miss You Message (60, 120Messaging coupons and promotional items. Welcome days after last transaction), Rewards Notice, message includes push for conversion. monthly promotional emails and newsletters Receive $20 credit for every 200 points earned; $10 off for Welcome, birthday cake, freeHard Benefits free appetizer with enrollment, receive points dessert even when paying with rewardsSoft Benefits Exclusive news, event invitations Bonus point opportunitiesExpiration & Coupons expirations vary based on No expirationRestrictions promotion 18
Using Your Website to Build eClub & Loyalty Program Awareness 19
Summary and Recommendations• Every consumer touch point provides an opportunity to deepen the relationship and build customer loyalty. • Remember…consumers are at different places on the “loyalty” continuum, so be ready to meet them where they are.• Your eClub already plays a valuable role in your Loyalty Marketing strategy and can provide a natural first-step towards loyalty club membership: • Delivery of basic loyalty rewards (birthday, anniversary, etc.) • Recruitment of new program members and conversion of eClub members• If you’re considering a card-based loyalty program. Carefully consider the following: • Add-on costs of the program (POP, collateral, cards, rewards and liability for unredeemed points)? • How the program will look in 6 months, 1 year, 3 years (brand and customer perspective) • Resources needed to manage the program and related data today and as it grows• The most successful eClubs and Loyalty programs are easy to understand, join and use
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