Customer Loyalty Programs

The development of successful Customer Loyalty Programs is evolutionary in nature.

The process takes place over the course of several years. Converting purchasers of a product to identifiable loyal customers is the epitome of permission -based marketing. The adjustment from a purchase only mentality to an “I’m a member culture” necessitates a change in attitude by the customer.

Customer loyalty development begins with the building of program members and evolves overtime into a customer relationship platform that can be used to communicate with customers, drive sales and gather data on purchasing behavior and customer preferences.

A decade ago, customer loyalty programs were associated primarily with product promotions and food store chains. Now many of the best-known brands leverage point-based customer loyalty programs to increase sales and reinforce their brands. American Express, MasterCard, American Airlines, Delta and United, Sheraton, Hilton and Starwood hotels for example all use point-based consumer loyalty programs to promote product sales, increase customer loyalty and communicate with their customers.

A well executed customer loyalty program can deliver a substantial array of strategic benefits. Specifically:

• Increase purchase frequency.
• Build a comprehensive database on purchasing behavior.
• Establish a promotional platform to drive marketing campaigns.
• Support brand-building initiatives by linking highly-perceived and complimentary lifestyle rewards to a brand.

At the core of all customer loyalty programs rests a combination of program strategy and management, reward selection, communication and technology challenges. There are three basic criteria for successful customer loyalty programs:

A. Management Support

For a customer loyalty incentive program to be truly successful, top management must fully back the concept and communicate this support to every sales associate, reseller, customer and prospective customer. The time frame involved in indoctrinating and educating this universe about your customer loyalty program, developing and refining the tracking system, and realizing firm sales goals is an ongoing process requiring about 2-3 years. Management must be willing to patiently support the program during this phase.

B. Program Participant Communications

Regular and effective communications to all program participants is an integral part of a successful customer loyalty incentive program. Changing those who just buy your product into loyal, frequent buyers and including ongoing motivation is a difficult task. Therefore, a planned, communicated effort is critical to aggressively introduce the customer loyalty incentive program and clearly define the program’s structure and your company’s firm expectations for it.

It is also just as important to clearly and repeatedly communicate the benefits and rewards of loyal membership. You must create a genuine emotional branding experience, one that lasts. In the initial start-up phase of this program, there is no risk of over-communicating. Newsletters, web site, POP; advertising and direct mail will play major roles as the communication vehicles. Additionally, we want to bring your retailers and sales force to the point where their role in this program becomes an intrinsic part of doing business.

C. Automated Tracking Capabilities

All customer loyalty programs must feature an automated tracking system which will be the heart of the program. It becomes the resting place for all data collected, monitored, measured and reported effectively to loyal members and the management team via the internet. In addition, for loyal members who do not have internet access, you can communicate with them via Interactive Voice Technology (IVT). IVT only requires the dialing of an 800 number and will eliminate costly direct mail communication.

FIRE Light Group helps firms build results – focused, brand-building customer loyalty programs. From program design and specification, through implementation and management, our team of seasoned industry experts is committed to building a customer loyalty platform that helps a company grow and nurture its precious customer base immediately and into the future.