Blog Post 2: Customer Loyalty Programs

            This blog posting will revolve around customer loyalty programs and internet marketing. Although, loyalty programs represent a part of customer relationship management (CRM) strategies they do not serve this function on their own – but rather they are a pillar of the overall CRM strategy.

            (Olenski, 2014) Even though the specifics of a loyalty program differ, the general premise remains the same: a loyalty program is a marketing system instituted by a business that rewards purchasing behavior, thus increasing the customer’s urge to stay loyal to that company. The focus of these programs is to change consumer behavior, but this means that businesses who want a successful loyalty program need to customize their program for each customer. (New Media Marketing, 2015) Loyalty is different for each customer. The key is to provide enough loyalty experiences that your best customers are appreciated.

(MarketingProfs LLC, 2000-2015) There are three main reasons why loyalty programs are one of the best ways to grow your business. First, these programs can help track VIP customers. Second, they can increase customer visits to the site. Lastly, with the right digital loyalty program they can segment specific groups and get them to come back to their site again.

Loyalty programs also give companies the best opportunity to engage with their best customers. There are endless possible ways to engage with these consumers such as utilizing social media, email, texting etc. It’s important to offer consumers a variety of platforms in which to connect. According to (Matsumoto, 2013), rather than using a one-size-fits-all approach, take the time to identify some key groups within their loyalty customer base that will allow them to customize their communications specifically to support the most important aspects of their loyalty program for these given set of customers, such as using an email marketing approach. (Matsumoto, 2013) Three main areas of focus for a successful email marketing campaign are: content, incentive and differentiation. In the dealing with the content portion of the campaign, it’s important that customers understand the benefits and touch points. The more the incentives motivate them, the more customers will share this with family, friends and others. It’s also important to try and make the incentive sound exclusive to the consumer and one that they feel compelled to go after. It will then be important for the offer to stand out against the consumer’s other email items. Making the offer time sensitive is one way to remind customers to take advantage of an offer before it is gone.

(Matsumoto, 2013) The loyalty membership lifecycle. (See below).

These phases effect customer viewpoints as they participate in the company’s loyalty program. (Matsumoto, 2013) This data grouping makes it much more likely that the company will deliver the right message at the right time; engaging in the right strategies should support a differentiated customer experience and support the business’ phase-specific objectives.

            (Miller, R.K., Washington K.D., & Miller Richard, 2014) There are also some actions that loyalty members find problematic such as: 

“allowing programs to review friends’ status updates/photos to see if customers are eligible for rewards based on shared interests, offering special rewards for providing program access to personal information, providing a credit card number to retailers for credit on their statements if a certain amount is spent, allowing program customers to “like” or “follow” to review their status updates  or photos and offer rewards based upon their profile content, and finally asking for personal information when enrolling to target promotions to that consumer’s specific demographic.”

These are items that consumers have stated that are concerns and businesses need to look at an address these concerns when developing a loyalty rewards program.

            (CRMTrends, 2002-2015) As loyalty programs become ubiquitous, some interesting dynamics will evolve in the loyalty marketplace. Some of these changes will potentially include looking for new ways for businesses to distinguish their programs, segmenting new programs (making them more tiered), programs will concentrate on expanding consumer relationships to strengthen their grip on existing customers, creating instant gratification by making it easier for customers to redeem their points, creating an increased multi-tender system where customers can participate in the programs whether they utilize credit cards or not, and lastly by being able to be mobile across multiple platforms. With brand loyalty being less and less common today, businesses have to create great loyalty programs to retain a steady consumer base. 

(Calero, 2015) "Loyalty programs are a step beyond promotions and competitions, where usually few people get rewarded. It’s important for businesses to create a structure that rewards customers after they've completed specific actions. As customers accumulate and redeem their awards. They get more interested, involved and are encouraged to do more.”

References

Miller, R. K., Washington, K. D., & Richard K. Miller &, A. (2014, p. 215). Consumer Marketing 2014-2015. Loganville, GA: Richard K. Miller & Associates.

Calero, A. (2015, March 23) How to Implement a Loyalty Program Using Social Media. Retrieved from http://www.socialmediaexaminer.com/implement-a-loyalty-program-using-social-media/.

Jarski, V. M. (2013, August 6) Surprising Facts About Customer Loyalty Marketing [Infographic]. Retrieved from http://www.marketingprofs.com/chirp/2013/11338/surprising-facts-about-customer-loyalty-marketing-infographic.

New Media and Marketing (2015, n.d.) Brand Loyalty Programs: Are they effective? Retrieved from http://www.newmediaandmarketing.com/brand-loyalty-programs-are-they-effective/.

Matsumoto, T. (2013, July 16) Supporting Loyalty Programs Through Email Marketing. Retrieved from http://www.clickz.com/clickz/column/2282550/supporting-loyalty-programs-through-email-marketing.

CRMTrends (2002-2015, n.d.) Loyalty Programs. Retrieved from http://www.crmtrends.com/loyalty.html.

Olenski, S. (2014, December 22) 8 Reasons Why Loyalty Programs Are Imperative For Marketers. Retrieved from http://marketingland.com/8-reasons-loyalty-programs-imperative-marketers-109077. 

Roberts, M. L., Zahay, D. (2012, March 28, p. 305). Internet Marketing: Integrating Online and Offline Strategies. 

Internet Marketing Blog Post 1

This initial Internet Marketing blog post will be focused around businesses using the Community Model to create a consumer base around user loyalty and recurring visits. This consumer base tends be more committed both in time and emotion. Revenue for this model is generated in a couple of ways such as through the sale of supplemental goods and services, donations, related advertising or subscriptions. Community models come in a variety of types such as an open source, open content, crowdsourcing, fund-raising, and social networking services. Let’s take a brief look at each of these types of models.

Open source is an agreement where people come together to produce a common resource on their own conditions, of their own design, as an independent community. According to Brabham (2013), “These individuals improve a common resource, they freely contribute their improvements back to the commons” (p. 6). Open source companies rely strongly on their development communities and are often seen as contributions to the constant advancement of the Internet. Most users have at some point utilized open source software such as Firefox, Linux and Apache. One could say that this open source movement helped spawn the free access or open content movement.

With the need for this open culture open content has begun to see a rise in popularity among its users. This content is created by a community of volunteers and is available to anyone and is often seen as “commons-based peer productions.” Open content is freely shared relevant resources, along with knowledge that is brought together in a collaborative way to create solutions or answer questions. A common example of open content that is used by many is Wikipedia. Piggybacking off of this collective intelligence of online communities is the concept of crowdsourcing.

Crowdsourcing brings in this concept of utilizing an online community of members to contribute on projects to solve problems and serve organizational goals. Crowdsourcing is still a pretty new marvel that relies on the skill of the Internet. Two great crowdfunding websites are Peerbackers and Kickstarter. According to Outlaw (2013), “Peerbackers is consistently recognized as one of the top crowdfunding websites in the industry and deals with funding entrepreneurs and innovators (para. 5).  Kickstarter is one of the most well-known of the crowdfunding websites, and focuses on creative endeavors such as design, the arts, gaming and technology.” (para. 6) This site isn’t really used to fund businesses but it takes products and has produced over a million dollars.

Then there is the community model of fund-raising. These fund-raising sites survive on voluntary donations from a community of consumers. Many non-profits utilize social media or fund-raising sites to solicit donations for their cause. According to Web Marketing Today (2014), “Reasons that non-profit organizations engage in utilizing social media to aid in their fundraising efforts is to target younger markets, maintaining communications, education, advocacy or to build your house list.” (para. 7) Most non-profit organizations have ways for donors to make contributions directly through their webpages. A great option for these organizations to look at retaining donors and therefore generating a consistent donor base would be to set up memberships or renewal processes.

The final community model to look at are social networking services. This model allows people with common interests to hook up over the Internet. Some examples of social networking services are email and instant messaging. Many of these services offer free basic options, but some social networking services generate revenue by charging fees to access premium features to subscribers.  Two of the largest social networking services are Facebook and LinkedIn. Social networks allow users to post content in real time. Businesses are jumping on the social networking bandwagon by posting job opportunities, product reviews, hosting conferences and educational opportunities.

Overall, these community models have a different set of needs yet they all have one thing in common and this is that sense of commitment and emotion from their consumers. These models all rely on a group of members or “internet community” in order to be successful. Community models are currently one of the most bountiful areas of development. Two of the main reasons for these types of models are relationship or task oriented. The relationship aspect primarily targets around common interests and the task oriented portion provides a way for professional communities to distribute information through protected networks. These sites are able to produce revenue via advertising, subscriptions – memberships or shopping. Some sites actually offer incentives to consumers for getting their friends and family to also subscribe to the site. Businesses are able take advantage and be a part of this “community” by participating in blogs, web banners or being part of forums taking place in these specific community sects.

  

References

Brabham, D. C. (2013). Crowdsourcing. Cambridge, Massachusetts: The MIT Press, 6.

Outlaw, S. (2013, October 10). 10 Top Crowdfunding Websites. Retrieved from http://www.entrepreneur.com/article/228534.

Qori, C. (2014, June 30). Using Social Media for Nonprofit Fundraising. Retrieved from http://www.webmarketingtoday.com/articles/112484-Using-Social-Media-for-Nonprofit-Fundraising/.