Uploaded bySallie Burnett
Loyalty Program Refresher
The document outlines the importance of customer loyalty and loyalty marketing, emphasizing that retaining existing customers is significantly more cost-effective than acquiring new ones. It provides seven keys to building customer loyalty, including recognizing customer loyalty, managing the customer lifecycle, and effective communication. Additionally, it discusses the changing landscape of customer loyalty programs and the necessity for businesses to engage and recognize their loyal customers.
More Related Content
Similar to Loyalty Program Refresher
![Business marketing midterm CHAPTER 3 PPT [Autosaved].pptx](https://cdn.slidesharecdn.com/ss_thumbnails/bmchapter3pptautosaved-240818111130-e33aaa72-thumbnail.jpg?width=640&height=640&fit=bounds)
Loyalty Program Refresher
- 1. Loyalty Program Refresher Timeto update your loyalty program? Sallie Burnett sallie@customerinsightgroup.com
- 2. Sallie Burnett Strategist. Leader.Innovator. © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758 President of Customer Insight Group, Inc., a leading strategic relationship-marketing firm Digital marketing professor at prestigious Daniels College of Business 2009 Direct Marketer of the Year
- 3. Agenda • What isloyalty marketing? • Why is customer loyalty important • What can loyalty marketing do for your business? • How is customer loyalty marketing evolving? • Where is customer loyalty today? • 7 keys to building customer loyalty. • SOSTAC • Resources
- 4. What is LoyaltyMarketing? Loyalty • Customer’s faithfulness; advocacy, devotion; constancy. Loyalty Marketing • Discipline of identifying and nurturing the yield of best customers through a long- term, reciprocity, value-added relationship. © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 5. Why is CustomerLoyalty Important? 45% of sales are from existing customers. Cost 5X more to attract a new customer than to keep an existing one satisfied. 60-70% probability of selling an existing customer again. 5-20% probability of selling to a new prospect. © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 6. What can LoyaltyMarketing Do for Your Business? GROW Grow and maintain the number of existing customers who purchase from you. FREQUENCY Increase number of times a customer makes a purchase. TRANSACTION SIZE Build transaction size by meeting more of the customers needs. PROFIT PER CUSTOMER Increase average value per customer through efficient marketing. © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 7. Where is CustomerLoyalty Today? CUSTOMER More demanding, more choices Trust is key to customer loyalty Participation in loyalty programs increasing COMMUNICATION Irrelevant, impersonal messages New customers/members are forgotten No customer engagement plan STRATEGY Me too value proposition Launch and put into “auto” drive Measurement metrics not tied to strategy INSIGHT Manage defection, not migration Data used to run program, not used to run the business Customer relationships are “siloed” in the organization © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 8. 7 Keys toBuilding Customer Loyalty 1. Recognize and Reward Customer Loyalty 2. Proactively Manage Customer’s Lifecycle 3. Make a Great First Impression 4. Create at Customer Engagement Strategy 5. Show Brand Advocates the Love 6. Communicate. Communicate. Communicate 7. Practice Serendipity © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 9. 1. Recognize andReward Customer Loyalty Recognize Reward Ask for their input © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 10. 1. Recognize andReward Customer Loyalty 34% 20% 13% 12% 10% 0% 5% 10% 15% 20% 25% 30% 35% 40% Providing exceptional 24/7 customer service Rewarding me for purchases, feedback and referrals Sending me exclusive and/or relevant offers and specials Providing personalized products, services Knowing me when I visit or call When consumers were asked about the best ways companies can gain their loyalty, the top choice for respondents was providing exceptional 24/7 service, followed by reward programs. Customers want to be rewarded for their loyalty. © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 11. 2. Proactively ManageCustomer’s Lifecycle Value to the Customer ValuetotheOrganization Unqualified Customer Prospective Customer Advocate Customer Repeat Customer © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 12. 3. Make aGreat First Impression 48% 40% 11% 1% 0% 10% 20% 30% 40% 50% 60% When I make my first purchase or begin service (first impression) Exceed my expectations in resolving an issue (service and experience) Before I buy or decide to do business with a company When I consider switching to a competitor First impression critical to winning customer loyalty and trust. Clickfox2012BrandLoyaltyStudy © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 13. 4. Create aCustomer Engagement Strategy Companies who have profited from social media are twice as likely to have a FORMAL STRATEGY. BE SOCIAL DO SOCIAL MEDIA © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 14. Consumers Trust Friends, family,connections have greater influence. SourceNielsonGlobalTrustinAdvertisingSurvey,Q32011 Don’t Trust Much/ At All Trust Completely/ Somewhat 36% 41% 42% 46% 47% 47% 47% 50% 58% 70% 92% 64% 59% 58% 54% 53% 53% 53% 50% 42% 30% 8% Ads served in search engine results Ads before movies Ads on radio Ads in newspapers Ads on TV Brand sponsorships Ads in magazines Emails I signed up for Branded websites Consumer opinions posted online Recommendations from people I know © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 15. Engaged customers… • Recommendproducts, services or brand” (52% respondents) • Engaged customers are “more likely to convert more readily (31%) • Engaged customers “purchase regularly” (28%) • Engaged customers “less likely to switch supplier” (27%) • Engaged consumers are “more aware of product family” (28%) © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 16. MEASURE Measure success ofprogram based on objectives including increased brand advocacy, referrals, and sales. ENGAGE BRAND ADVOCATES Create a formalized plan to recognize and reward desired behavior. IDENTIFY BRAND ADVOCATES Qualification of brand advocate can include the value to the organization as well as quantity and quality of posts, customer referrals, etc. 5. Show Brand Advocates the Love © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 17. 5. Show BrandAdvocates the Love Low High Customer Satisfaction High Loyalty Brand Champion Significant value to influence Viral Loyalists Loyal and do tell Loyalist Loyal but don’t tell Mercenaries Switch based on price —little value created Antagonist Dissatisfied and tell others © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 18. 6. Communicate. Communicate.Communicate. 0% 10% 20% 30% 40% 50% 60% 70% 80% strongly agree somewhat agree neutral somewhat disagree strongly disagree Good Communication Drives Customer Satisfaction Satisfaction “Program” communications are relevant to me MaritzInsightstheLoyaltyReport2012 © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 19. 38% 62% 47% Modify purchases to maximizeloyalty benefits. Loyalty programs make me more likely to continue doing business with a company. Modify when and where I shop to maximize loyalty benefits. Best Practice: Use contextual, relevant communications in the moment, when it matters and you will strengthen customer loyalty and reinforce customer satisfaction. 6. Communicate. Communicate. Communicate. © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 20. 7. Practice Serendipity ©Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 21. 7 Keys toBuilding Customer Loyalty 1. Recognize and Reward Customer Loyalty 2. Proactively Manage Customer’s Lifecycle 3. Make a Great First Impression 4. Create at Customer Engagement Strategy 5. Show Brand Advocates the Love 6. Communicate. Communicate. Communicate 7. Practice Serendipity © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 22. SOSTAC • Situation Overview •Objectives • Strategy • Tactics • Actions • Controls © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 23. Depth of customerinformation Business Objectives Expand marketing channel with direct capabilities (“broad and shallow”) Build strong relationships with growth segments (“narrow and deep”) Collect data to be leveraged as a core business asset (“broad and deep”) No explicit strategy Continue to pursue defined initiatives Provide direct, targeted messages and offers across customer base Target all segments, with limited ability to target and tailor between segments Collect customer data to make better decisions across the business Target all segments, significant ability to target & tailor between and within segments Develop strong relationships with most valuable segment(s) Target growth segments only, significant ability to target and tailor between and within segments Low High Low High Breadthofcustomercoverage Developing Program Strategy © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 24. Expand marketing channelwith direct capabilities Key areas of benefit Potential Types of impact Customer Segments Functions Limited data for all customers Growth segments Maintain segments Marketing Only • Improved efficiency of markdown spend through direct targeting and understanding of promo response “broad and shallow” Build strong relationships with growth segments Deeper data for select segments • Limited customer insights to drive core function business decisions • Increased customer loyalty (e.g., greater margin, improved cross sell, higher frequency of purchase) • Enhanced customer perceptions (e.g., affordable indulgences positioning) • Targeted levers (e.g., conversion, frequency, UPT, and markdown) “narrow and deep” Collect data to be leveraged as core business asset Robust data for all customers • Robust customer insights to drive core business decisions • Strategic decision support (e.g., segment assortment preference) • Strategic choice evaluation (e.g., impact of menu changes on core customer segments behavior) • Increased customer loyalty • Enhanced customer perceptions • Targeted levers “broad and deep” Growth segments Maintain segments Growth segments Maintain segments Marketing Distrib. Merch. Planning Buying Store Ops.Marketing Distrib. Merch. Planning Buying Store Ops. Strategy Options and Potential Impact © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 25. Successful Strategies © CustomerInsight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 26. Key Economic Considerations PotentialExecution ElementsProgram Type Key Economic Considerations Instant store discount “broad and shallow” Points based rewards “broad and deep” Segment specific propositions “narrow and deep” • Customers present card to receive in-store discounts automatically at POS • Markdown dollars distributed through card • “Swipe Sweepstakes” element to encourage consistent use of card • Mass consumer data insights to build tailored merchandising, pricing and promotional mix at store and customer level detail • Customers present card to accumulate points over time to be redeemed for tiered rewards • “Swipe Sweepstakes” element to encourage consistent use of card • Mass consumer data insights to build tailored merchandising, pricing and promotional mix at store and customer level detail • Select customer segments invited to participate in program that appeals to them • Brand distinctions leveraged against group for distinctive positioning and brand strength • Purchase response to tailored messages drives follow-up communications and determination of need for additional customer data detail • Highest participation • Low customer upside • Minimal incremental impact on UPTs, store trips and conversion • High participation • High free rider hurdle • Aspirational purchases to achieve rewards will provide gains in UPTs, store trips and conversion • High exit costs • Select participation • Greatest customer upside • Enhanced loyalty to drive per cap and margin • Strongest gains in conversion and UPTs • Minimal exit costs © Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 27. Thank You! Sallie Burnett sallie@customerinsightgroup.com Twitter.com/sallieburnett LinkedIn.com/in/sallieburnett ©Customer Insight Group, Inc. All rights reserved. * www.customerinsightgroup.com • +1 303.422.9758
- 28. Resources Social Media Library http://www.customerinsightgroup.com/loyaltyblog Infographics http://www.customerinsightgroup.com/loyalty-infograph SallieBurnetton Twitter http://twitter.com/sallieburnett LinkedIn Group http://linkd.in/LinkedInDiscussion Social Media Grader http://www.customerinsightgroup.com/marketinglibrary/social-media-grader White Papers & eBooks http://www.customerinsightgroup.com/white-papers
Editor's Notes
- #2 A strategic loyalty initiative is one of the star players in your marketing arsenal to build momentum and spur continued growth. Learn about latest trends in customer loyalty and what the customer is expecting from their timeshare experience. You’ll also learn seven best practices that you can compare with your customer loyalty approach to uncover weak points and opportunities to improve the odds of your success
- #5 Discipline of identifying and nurturing the yield of best customers through a long-term, reciprocity, value-added relationship.“*This definition speaks to your CFO as well as your customer experience manager. Now that we have some common definitions, it’s time to concentrate on the hard stuff: nurturing customer loyalty. Five key elements of successful loyalty marketing: Insight — Create a competitive advantage Precision — Treat different customers differently Relevancy— Make it resonate Reciprocity — Deliver value in every interaction Yield — Gain an amount as a return on an investmentNurture:To help grow or develop; cultivate: Promote and sustain the growth and development of:Interactive: capable of acting on or influencing each other. Or Acting or capable of acting on each other.A term describing a program whose input and output are interleaved, like a conversation, allowing the user's input to depend on earlier output from the same run. yield v1. vt to produce something naturally or as a result of cultivation2. vt to produce something as the result of work, activity, or calculation3. vt to gain an amount as a return on an investmentReciprocity - a state or relationship in which there is mutual action, influence, giving and taking, correspondence, etc., between two parties. [1]
- #6 A company’s retention rate is the gateway to the future and the foremost predictor of strategic success. 45 percent1 of timeshare sales are from those that already own a timeshare. 1 State of the Vacation Timeshare Industry: United States Study 2011 Edition conducted by Ernst & YoungAccording to the Customer Service Institute, 65% of business comes from existing customers.It costs five times as much to attract a new customer than to keep an existing one satisfied. Marketing Metrics study found the average company 60% - 70% probability of selling again to existing customers and a 20% - 40% percent probability of successfully selling to lapse customers. 5% - 20% probability of selling to a new prospect.
- #11 Different resorts offer different rewards for referring someone to buy there. Some rewards could include:Free or discounted memberships at your exchange company.Free or discounted maintenance fees for up to a year.Discount on your own timeshare payments.Money or gift cards for different locations.
- #14 The Social Media and Online PR Report, published by Econsultancy in association with bigmouthmedia, is based on a survey of more than 1,100 companies and agencies and was fielded in September 2009.
- #18 Everyone likes to be recognized for their goodwill efforts. Brand advocates are no exception. Whether you send a tweet that says “Thanks for sharing our big news!” or give more formal recognition in an e-newsletter or blog post (such as a Member or Customer of the Month), telling your advocates that you recognize and appreciate their efforts goes a long way in motivating them to continue to speak highly of your brand.Bodybuilding.com does a nice job of recognizing their members with a Member of the Month feature that includes a member bio, photo and interview questions. Give them something to display – If you don’t already provide them with a plaque/certificate or similar item, make sure you give it to them. Simple things like online badges or a certificate like the one I got work wonders._____Reward Them: Nothing incentivizes brand advocates like a good, old-fashioned reward. This is a great tactic not only for thanking existing brand advocates, but also for identifying and engaging new ones. Be strategic about the reward by linking it to a particular action you would like them to take.Ask for their Input: 3. Ask Them For Their Input. Brand advocates often know your products and services better than anyone else, because they love them and use them often. Why not ask them what they think? Whether you are instituting a new program, rolling out a new product line or want ideas for a catchy new slogan, brand advocates will love that you have turned to them for advice. Asking brand advocates for feedback is also a great way to beta test marketing initiatives and crowdsource new ideas.
- #19 A comprehensive report on the state of the Canadian loyalty landscape The consumer loyalty landscape is maturing, as consumers are not only joining many programs each, but are purposely modifying their purchase decisions in order to optimize their loyalty program membership experience. Consumers modify where they shop, what they buy and even how much they are willing to spend in order to maximize the rewards they earn within loyalty programs.But how do consumers choose the programs they belong to and the programs in which they engage most? Not only are there hundreds of programs to choose from, but even for those who have chosen their preferred retailer or bank, there are STILL choices; most banks have several programs, retailers have credit card and non-credit card programs, and some retailers even have multiple non-credit card programs. In a sea of alternatives, how do consumers choose, assess meaningful value and stay engaged over time?This whitepaper looks at these and other important questions for loyalty marketers.About this studyMarketers who continue to spend or promote spending on loyalty marketing solutions need regular opportunities to stop and reflect on the success and the future of not only their own loyalty programs, but the loyalty landscape overall.Maritz’ 2nd annual report titled Maritz Insights: the loyalty report offers one such opportunity to reflect on the Canadian loyalty landscape, driven by the voice of consumers. Our report reveals the results of a survey of more than 6,500 consumers, exploring attitudes and behaviours on loyalty marketing programs impacting regular shopping and purchase decisions.About the researchResearch results were taken from a survey commissioned by Maritz Canada and conducted by Maritz Research Canada. The survey was fielded from December 2011 to January 2012 and spoke to a total of 6,665 Canadians, though certain lines of questioning were asked to subsets of this overall base. The sample was augmented to ensure sufficient response from certain subgroups, such as affluent consumers, though total results were weighted to national proportions on all major demographics such as income, age, gender and region.AuthorsThis report was written by:Rob Daniel, VP, Loyalty and ResearchKyle Davies, Account Manager, ResearchFebruary 7, 2012
- #20 A comprehensive report on the state of the Canadian loyalty landscape The consumer loyalty landscape is maturing, as consumers are not only joining many programs each, but are purposely modifying their purchase decisions in order to optimize their loyalty program membership experience. Consumers modify where they shop, what they buy and even how much they are willing to spend in order to maximize the rewards they earn within loyalty programs.But how do consumers choose the programs they belong to and the programs in which they engage most? Not only are there hundreds of programs to choose from, but even for those who have chosen their preferred retailer or bank, there are STILL choices; most banks have several programs, retailers have credit card and non-credit card programs, and some retailers even have multiple non-credit card programs. In a sea of alternatives, how do consumers choose, assess meaningful value and stay engaged over time?This whitepaper looks at these and other important questions for loyalty marketers.About this studyMarketers who continue to spend or promote spending on loyalty marketing solutions need regular opportunities to stop and reflect on the success and the future of not only their own loyalty programs, but the loyalty landscape overall.Maritz’ 2nd annual report titled Maritz Insights: the loyalty report offers one such opportunity to reflect on the Canadian loyalty landscape, driven by the voice of consumers. Our report reveals the results of a survey of more than 6,500 consumers, exploring attitudes and behaviours on loyalty marketing programs impacting regular shopping and purchase decisions.About the researchResearch results were taken from a survey commissioned by Maritz Canada and conducted by Maritz Research Canada. The survey was fielded from December 2011 to January 2012 and spoke to a total of 6,665 Canadians, though certain lines of questioning were asked to subsets of this overall base. The sample was augmented to ensure sufficient response from certain subgroups, such as affluent consumers, though total results were weighted to national proportions on all major demographics such as income, age, gender and region.AuthorsThis report was written by:Rob Daniel, VP, Loyalty and ResearchKyle Davies, Account Manager, ResearchFebruary 7, 2012