Loyalty is more than a marketing program

The typical American household is enrolled in 29 loyalty programs but only participate in 12 of them. In today’s marketing landscape, customer loyalty should not be viewed as just a marketing program. Loyalty is something you receive from consumers by delivering on your brand values and offering a superior customer experience. Marketers looking to advance their loyalty program need to determine what their consumer values, what encourages them to participate and what entices them to remain active in a loyalty program.

To achieve high-levels of engagement, a loyalty program should be viewed as a customer experience platform to help brands deepen customer relationships and foster loyalty. This requires loyalty to be a corporate initiative backed by research and planning where everyone is held accountable for its success. You need everyone on board including marketing, finance and customer service.

For example, Domino’s invests time and research into understanding what their customers want from their Piece of the Pie® rewards program (pizza!). In a recent session at Forrester’s Consumer Marketing Forum, I sat down with Stephen Kennedy, Director of Loyalty Marketing at Domino's to discuss their approach to loyalty. He shared that they focus on where their customers are. If their customers are online, Domino’s is making it easy for them to order online. Domino’s performed analytics and conducted research to learn what consumers wanted from a Domino’s loyalty program. They want it made simple, of value and to be genuine. Stephen expanded, “Understanding the customer is essential to us at Domino’s. Marketers need to look at the data and have visibility into their customers. Be relevant and understand why they stopped purchasing. Once you know that, develop a communication strategy for winning them back.”

Through these efforts, don’t lose site of the importance of your existing customers. Marketers naturally tend to focus their efforts on acquiring new customers.  However, the lifetime value of an existing customer has proven to be more profitable. The probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is 5 to 20%. Leverage loyalty to enhance their customer journey and sustain their relationship by demonstrating the value of your brand’s offering.

As you’re continuing to advance your loyalty efforts within your organization, remember:

  • Loyalty cannot be viewed as a tactic
  • Executive support is essential for the continued growth of your loyalty initiatives
  • Think with an innovative mindset and have some fun
  • Test, test and re-test

Loyalty marketing has entered a new phase. Marketers need to determine how loyalty programs fit into their overall corporate goals and sustain both the funding and support to continue to grow their programs and maintain profitability.