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.