By Barry Smith, Senior Consultant at Ikano Insight
The customer landscape is changing; and as a result it is becoming increasingly difficult to keep your customers loyal. Whilst some business leaders may view loyalty programmes as an unnecessary method of rewarding customers who would probably spend anyway; this is not the case.
Data-driven marketing is the future; and loyalty programmes present the opportunities to collect this vital data about your customers that will feed into all business departments: from how your marketing budget is spent; to the products/services you offer; right through to merchandising or how your front-line staff communicate with customers.
Aligning your business around the customer has never been more imperative, and a loyalty programme provides the potential for just this. Here are the questions to be asking of your Marketing Directors; ultimately how will investment in a loyalty programme benefit your business?
- How much will a loyalty programme cost us?
- Technical: which platform will you use to design, manage and report on your loyalty programme?
- Marketing: How will you promote your loyalty programme to drive behaviours? What are your ‘Welcome’ and retention tactics?
- Benefits: Will you offer limited-time rewards for customers who hit a certain spend threshold; free gifts; or different rewards for different tiers of customers?
- What’s the value/ROI of investing in a loyalty programme?
- Do/will our loyal customers spend more?
- Do our customers want a loyalty programme?
- What are the objective and KPI’s?
- What data/insight can be gathered from the loyalty programme and how can this be utilised across the business?
- What are the risks?
- How will we know if the programme is successful?
In summary, your loyalty programme should not just fit into your business, but shape it. Data doesn’t lie, and the beauty of this data-driven marketing approach allows you to put numbers against engagement.