Thursday, July 5, 2012

Beef Up Your Loyalty Program

NEW YORK, NY - APRIL 10:  A customer walks int...
(Image credit: Getty Images via @daylife)
Retail loyalty programs are evolving. They’re no longer just those bar-coded icons of customer loyalty that hang – often unused – from (your mother’s) key chains. Today’s reward initiatives don’t require an actual card, and they increasingly engage with smartphone-wielding shoppers to provide a 360-degree view of regular customers. Rather than simply collecting points toward a free sandwich or hotel room visit, the latest mobile-linked loyalty programs allow members to scan identity codes from a phone or app, rewarding them with instant coupons and sales.

Loyalty programs are evolving as quickly as the digital marketplace –and that’s no surprise because we’re seeing more and more how these individualized interactions with your brand can allow the personalized, relevant messages that truly drive sales.
If it’s time to beef up –or start –your loyalty program, here are five key questions you need to consider:
1. Would your customer base support a tiered membership program? In a tiered membership program, bigger spenders get more perks, and multiple membership levels are long-time staples from retailers such as  Starbucks, Best Buy and the Gap. Climbing to different status levels adds spice to membership by offering tiered advantages, increasing the perceived value of membership and improving member retention. 
2. What exclusive or fun rewards will best engage your customers? Best Buy’s most-valued customers were pleasantly surprised when the retailer invited a handful of top shoppers and family members to an exclusive movie preview. This “surprise and delight” approach is becoming a regular element in loyalty strategies as a way to standout in a crowded loyalty space – and capture the hearts and minds of customers, essential for true “loyalty.” 
3. What are the benefits/disadvantages of offering credit card or debit links? Credit-card linked rewards programs encourage sales by triggering merchant offers. Many retailers such as Express, who used to base their rewards program on a proprietary credit card, are retiring these outdated programs and transitioning account holders into new programs that allow points to be earned for social media interactions and also for purchases –regardless of payment method 
4. Can you partner with an affiliate so the reward points a customer earns can be used in more than one way? Shopkick, a location-based shopping app, has partnered with ExxonMobile, pumping out rewards to service station users. Other company partnerships allow the points you earn in one program to be used in other stores; Citibank cardholders, for example, can use their reward points at Best Buy stores. Of course, affiliation only makes sense when you partner with a company that enhances or mirrors your core offerings. Figure out what relationships are most important for your brand and design a rewards program that fits the complexities of your customer’s lifestyle.
5. How can you develop social-media tie-ins? It’s a given: Social networks can help you identify and engage customer advocates, so consider integrating loyalty programs with social media interactions (rewards-club members who “like” a brand on Facebook or follow it on Twitter can get extra coupons or deals, e.g.). With the new Express program we mentioned,  launched by the Columbus, Ohio, based apparel retailer, members can earn exclusive rewards for following one of the company’s Twitter accounts, reviewing products (“Love these pants!”) or re-tweeting its tweets (“Have you heard about the 50% off sale?”)

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