It is important to have a strong loyalty program in order to retain customers, we already know this. The entire loyalty industry is expected to continue to grow. While reading the June 2013 Colloquy Talk, I noticed there was a section dedicated to the process of developing active, satisfied members. "As with all exercise programs, developing an efficient loyalty program requires dedication and stamina."
1. Build Muscle
It is important to have strong programs that rely on innovation and delivering relevant value propositions. In addition to relying on internal creativity, they suggest watching new programs, which can lead to more engagement and growth in the future. Colloquy also suggests learning from verticals other than your own. Among the trends, they are seeing:
- Increasing use of loyalty programs causing behavioral change and consumer education
- Rewarding for behaviors, not just financial transactions
- Increasing use of soft benefits (i.e. recognition) in everyday spend categories
- More utilitarian everyday rewards (i.e. discounts), particularly in Financial programs
- Mobile access to programs via apps
- Status matching (i.e. granting status to members with status in a competitor's program)
More companies are seeing the value of loyalty programs for their customers, as well as the value of tracking, reporting and drawing insights from the customer data.
2. Trim Flab
Identify your best customers and concentrate your resources on them in order to keep your program and your ROI "fit and trim." The cost of customer acquisition is higher than the cost of engaging existing customers. There is opportunity for companies to see higher returns by driving this engagement.
3. Reject Steroids
Colloquy refers to steroids as "the artificial body mass", metaphorically of course. In another words, you should make the loyalty program your own. "Determine why your customers came to you in the first place and build your program around fulfilling their unique needs and communicating and delivering your unique solutions. Don't copy the competitors. Learn from them and learn from the programs in other verticals as well."
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