With football playoffs in full swing, studio show analysts are everywhere. Let's take a look at the most important insight from the Bradshaw's and Corso's of customer retention and loyalty.
The following expert analysis of customer loyalty best explains how loyalty will evolve in 2015. Considered together along with the key stats from 2014, marketers should be all set to understand what it takes to build a modern and successful retention marketing program.
Make the in-store loyalty registration process seamless
Seven in 10 retailers said in-store loyalty-program registration is a major challenge. These merchants are searching for tactics to acquire new members, yet roughly half of those surveyed conceded their program redemption options are limited, and less than half partner with other brands, including banks or other merchants, to deliver offers that would likely enrich their offerings and have wider appeal.
In-store loyalty registration stands as one of the most important initiatives for brick-and-mortar stores looking to maximize their program success in 2015. In theory, all customers who have a good experience should sign up immediately. In practice, however, merchants need to be smart. Start by partnering with only with knowledgeable providers who can deliver an effortless sign-up process. In addition, make sure that the loyalty program aligns with the way customers already pay, as credit card and other benefits have huge influence over customer behavior.
Create transparent customer communication
Michael Marino, Vice President of Customer Loyalty, Caesars Entertainment
Four months ago, our capture rate of email addresses for new card assignments was 24%. Today it's about 80% because we made a conscious effort to be very clear with our intentions. It's important to make sure customers know what they’re going to get back, so they aren’t among that 77% shown earlier that don't think they get anything for their data. Make sure that they know what the value is.
Transparent communication is a crucial aspect of loyalty program success. Mobile, of course, plays a huge part in creating transparency. The best programs will be those that make it very clear to customers where they stand in the customer loyalty race.
Make sure retention programs can generate actionable data
Mike Passilla, CEO, Chase Merchant Services
The research shows retailers are surprisingly short-handed when it comes to the tools needed to fully understand their customers. Sixty percent of retailers believe the data sources they use to gauge spending outside their stores are very limited, according to the retailer survey. An equal percentage said they lack the data to effectively target new customers.
Without data, personalization and intimacy with customers is impossible. The best loyalty programs in 2015 will be the ones that can accurately draw on demographic, behaviorial, and demographic data to build mutually beneficial customer relationships.
Loyalty should take advantage of customer surprise and delight
Dr. Gregory Berns, Assistant Professor of Biomedical Engineering, Emory University
We find that so-called pleasure centers in the brain do not react equally to any pleasurable substance, but instead react more strongly when the pleasures are unexpected.
A long-standing history of difficult check-ins, added steps at checkout, and scanning clunky coupon codes has put customers on the lookout for poor experiences. The best retention marketing programs in 2015 will flp this model on its head, and create experiences that make customers react with surprise at how easy loyalty can (and should) be.
Loyalty goes beyond monetary value
Edward Nevraumont, Former Vice President of Loyalty and Database Marketing, Expedia
What was interesting was that only 10% of those we sent the coupon to actually used it, but even those who didn’t use it still traveled more with us.
Of course, customers care about saving money. Loyal customers, however, care about a brand. By making customers feel valued, monetary value or otherwise, brands will have more success in 2015.
Make data dyanmic to provide customers with the best experience possible
Mark Wilmot, Senior Vice President and U.S. Head of Communications and Media, dunnhumbyUSA
Segmenting is good, and better than mass (marketing), but many people move through different segments through different times of the year. A lot of people look in the mirror and couldn’t say what segment they are in.
To be successful in 2015, remember that loyalty marketing isn't an on/off switch. It's a crawl-walk-run process. Iterate upon each improvement in order to ensure long-term program success.
Balance the four motivators within a retention marketing program
- Promotional pricing: Discounts, coupons, partner-funded offers, cash-back programs or fuel rollbacks that encourage short term purchases;
- Points or miles: The reward currency issued through a loyalty program;
- Promotional programs: Contests, sweepstakes and giveaways that deliver high-value rewards; and
- Member privileges: Special benefits offered through club memberships and subscriptions.
In 2015, successful loyalty programs will find a more balanced mix of the four customer motivators. Again, monetary rewards will be important. Experiential rewards, however, will see a much bigger piece of the pie. That's how merchants can create more authentic customer loyalty in the coming year.
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resources/pdf/reports/ 20141208-Loyalty-Leaders-Tell- All-rep.pdf
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