Tag Archives: loyalty strategies

Using loyalty programs to reach retailers’ best customers

Loyalty programs are not a new concept in the world of retail, but, like today’s customer base, they are in a critical state of flux in the current digital era. Both for retailers looking to create loyalty programs from scratch and for those looking to adapt existing programs to appeal to shifting consumers, engaging today’s connected consumer is key, and developing engaging programs was the topic of a session at National Retail Federation’s BIG Show this week in New York.

According to Caroline Papadatos, senior vice president of international corporate marketing at Loyalty One, there has been an “explosion of channels” recently among consumers. She noted during the session that smartphones are often the first thing consumers pick up when they wake up in the morning and the last thing they put down before they go to sleep at night, and it is the responsibility of retailers to make sure that they let that kind of behavior shape their loyalty programs.

“What we’re seeing is that savvy retailers are adapting and they’re getting ahead of the customer,” she said.Shoppers are increasingly looking for personalization and they are looking to have experiences in everything they do from shopping to ordering pizza, Papadatos said, and loyalty programs are a great way for retailers to not only offer shoppers a unique experience but also to collect the kinds of data they need to create a truly personalized shopping experience.

“To create real personalization you need data,” and the well-positioned retailers are the ones that are using that to fuel their loyalty programs, she said.For Walgreens, it took longer than other retailers to really get into the loyalty game. In the early 2000s, the retailer relied on stores for growth, but there came appoint where Walgreens reached a saturation point and had to restrategize. So in 2013 the company turned to loyalty programs as a way to figure out how to better leverage its network of stores and get a deeper understanding of customers, with the goal of transforming the retailer’s image from a drugstore to a wellness destination, Walgreens Senior Manager of Loyalty Strategy and Insights David Zychinski said during the session.

In the two years since the chain launched its rewards program, Walgreens has really worked to create an engaging and dynamic program that includes its regular Balanced Rewards, pharmacy rewards and Balance Rewards for healthy choices, Zychinski said. And the retailer’s goal is to focus its loyalty strategy on its best customers.

“It’s not about having a loyalty rewards strategy, it’s about having a customer loyalty strategy,” he said.For Walgreens, the direct benefits of its loyalty programs are important, but the indirect benefits like gaining insights into product assortment, pricing, promotions and store layout also carry real value for the retailer, Zychinski said. And focusing its loyalty strategy on its best customers creates opportunities for retention, greater access to those customers and a deeper understanding of the “share of mind” of Walgreens customers, he said. And the strategy is paying off. Since its launch, Walgreens’ loyalty program has seen more than 1 million customers download coupons, 120 million registrations, more than 80 million active members and 500 billion loyalty points earned.

All in all, Zychinski said important things to keep in mind when it comes to loyalty programs include aligning loyalty strategies with corporate strategies, focusing loyalty strategies on the best customers, establishing a foundation of insights into and segmentation of those customers and using those insights to drive loyalty and behavior changes among the best customers.

“It’s a really exciting time to be in loyalty,” he said.The main goals retailers should keep in mind when it comes to loyalty programs are acquiring customers, increasing basket size, drawing shoppers to stores and achieving a status among customers that has them choosing you over your competitors, according to Papadatos.

“It’s not much more complicated than that,” she said.But it doesn’t end with just establishing a loyalty program.“Loyalty programs are an important tool, but they’re not the only tool in the tool set,” Papadatos said.

It’s also about knowing what to do with the data collected through loyalty programs and bringing the different aspects of loyalty programs like promotional pricing, points programs and perks together into a single platform. Data can only become a decision-making tool after retailers take the time to prioritize and when they apply the data to other aspects of their businesses like merchandising, Papadatos said.

Source : smartblogs.com

Four Factors That Create Compelling Loyalty

While we have seen a significant expansion of loyalty and rewards initiatives in recent years, the core elements remain pretty basic which needs to be changed. Here are four key elements  essential to making just about any brand’s marketing and loyalty strategies more relevant, more compelling and more personal.

1. Unified- Consumers are using any and all channels to go through their decision journey. Customer data across channels and touch points must be integrated and used consistently to inform decision-making. Most marketing interactions must reflect anytime, anywhere, anyway perspective. One brand, many channels should be the guiding mantra.
2. Individualized- To pay attention in the first place – much less act on a company’s marketing messages – the consumer needs to feel that “this brand knows me, it consistently shows me it knows me and it regularly shows me it values me.” Unique customer identification and distinctive treatment and offers need to be dialed up in most brands’ marketing mix.
3. Localized -With more and more consumers using mobile devices to enhance their shopping experiences, there is a huge opportunity for what I like to call “right-time marketing.” Geo-location technology, employed judiciously, adds an element of context that increases the odds that offers will be meaningfully more customer relevant.
4. Amplified – It’s been years since Seth Godin reminded us of the value of finding our “Purple Cow.” Godin’s admonitions have never been more relevant. The only way to stand out in a sea of sameness is to amplify a dimension of the business model that is meaningful to core customers and that a brand can ultimately own. Stated differently, brands must choose and distort a signal to break through the noise. If strategic, and perhaps a bit lucky, an organization can tap into the essence of remarkability by inspiring customers to advocate for the brand and amplify its message.

The promise of personalization has been around for many years. Until recently, the technology did not exist to scale most of these approaches. Moreover, there was not a compelling business case to invest in the incremental cost and complexity that robust personalization requires.

Marketing science and technology have advanced to the point where pragmatic and affordable solutions are becoming readily available. Most importantly, market dynamics require most brands to re-evaluate much of what they are doing. Mass marketing programs are becoming less effective literally by the minute. One-size-fits-all strategies are getting diluted in the ether. If you’re not relevant, the customer stops listening. Any measure of trust that may have been built up is easily lost.

In a competitive world that looks like a zero-sum game for many companies, the only chance for success is to become meaningfully more relevant than the next guy. So this time it’s not about who is bigger, faster or cheaper. It’s about who gets closest to the customer. This time it’s personal.

Source : www.colloquy.com/loyalty-strategies