Browsing articles tagged with " Information Gathering"

15 Things Good Loyalty Programs Do To Create Business Growth

By The Editor  //  April  //  1 Comment

Many of the so-called loyalty programs in operation today don’t really develop loyal customers at all; rather, they create “frequent” customers. Loyal customers do more than just visit your business more frequently than other customers; they are your businesses’ best marketing tool and your biggest fans! They want your business to do well, and they ensure that you’re there for them when they need you by sending more business your way. Besides bringing their own business to you, they encourage others to do the same.Business Growth

These loyal customers are the most valuable assets businesses have, and yet many loyalty programs provide these customers with the same standard treatment every other customer receives. Good loyalty programs, rather than “frequent customer” programs, recognize and value customers for their loyalty, rewarding them for more than simple patronage. And by keeping its best customers happiest, businesses reap their own rewards through several channels of business growth.

Below are 15 key business benefits of properly implemented loyalty programs. We recommend you evaluate each one to determine how well your loyalty program is providing each benefit:

1. Retain Existing Customers: Not only do loyalty programs provide tangible incentives for continued patronage (via earned points, etc.), programs collect customer data that allows a business to better meet the needs of its individual customers. This provides for more targeted and customized service, making the consumers more likely to remain customers.

2. Acquire New Customers: While it should not be the central focus of any loyalty program, acquiring new customers is essential to any business and should be a benefit of your loyalty program. How effectively your program attracts new customers will depend on how exciting and how valuable the rewards seem to the target audience. Use your program data to determine demographics of your most loyal customers; then target prospective customers with similar demographics in acquisition campaigns.

3. Move Customers Up to Higher Tiered Rewards Levels: Build into your program the ability for customers to “graduate” to higher rewards when certain thresholds are met. This will encourage lower spenders to increase their spend in order to move up to better rewards brackets.

4. Filter Out Unprofitable Customers: It can be more expensive to retain bad customers than it is to acquire new ones. Customers who only purchase during times of sales and discounts can cost you money rather than increase sales. Design your loyalty program to reward better customers without rewarding those just watching for the bargain buys. Professor Philip Kotler’s adaptation of the Pareto Principle states that while the top 20% of your customers generate 80% of the profits, the bottom 30% of your customers eat up 50% of the profits generated by the 20%. Ensure your program is only rewarding the customers actually bringing in business.

5. Recover Orphan Customers: Salvaging former customers can be infinitely more effective – and much less expensive – than acquiring new customers. Discover what it takes to win back old customers and target this group with “We’ve Missed You” campaigns. Then ensure their new experiences with your business are positive and meet their needs.

6. Increase Customer Lifetime Value (CLV): It’s easy to get discouraged or underestimate a customer’s value when you are viewing their transactions in isolation. Look instead at the bigger picture. Determine what your best customers bring in through lifetime patronage and focus on that when interacting with them. When your customers are valued not simply for one purchase here and there, but for their lifetime business with your company, their loyalty – and their lifetime value – will increase.

7. Target Your Best Customers: Best Customer Marketing (BCM) involves spending more time, energy and resources on your best customers in order to maximize the ROI. Use your loyalty program data to determine who your best customers are, then recognize and reward them.

8. Build Relationships: Always remember that customers are people too. When your program is focused on the “human” aspect of customers, it will go further toward building customer relationships, which in turn leads to improved loyalty – and profits.

9. Create Advocates: Advocacy is one of the highest forms of loyalty a customer can show. They are so satisfied with your products and services that they feel compelled to share their experiences with friends and family. And any good marketer will tell you that word-of-mouth marketing is far more effective than any amount of promotional material.

10. Adjust Pricing Levels: A good loyalty program can help develop solid pricing structures. If customers are happy purchasing products at a particular price, why discount it? You can also use your loyalty program to study the effects of prices changes (e.g. what customer segments’ changed their buying habits when the price changed?).

11. Respond to Competitive Challenges: By monitoring customers’ purchase histories when new competition opens nearby, businesses can quickly and accurately identify what customers defect to the competition. These customers can then be enticed back with customer-specific incentives, special offers and even direct contact.

12. Select Product Lines Effectively: By knowing your best customers’ buying habits, you can more accurately predict which products lines to keep in stock, which to expand and which to discard entirely.

13. Plan Merchandising Optimization: Again, monitoring customers’ purchase history can allow businesses better determine which inventory items need to be ordered and when, as well as more strategically place merchandise on the sales floor.

14. Reduce Promotional & Advertising Costs: Targeted marketing efforts, through loyalty program data, allows businesses to zero in on specific customer segments, to reach the right customers with the right message at the right time.

15. Selecting New Business Locations: Your loyalty program provides you with valuable details on your customers’ demographics and geographics, allowing you to choose new business locations that would be the most profitable for you and beneficial for your customers.


Segmentation Optimizes Customer Experiences

By The Editor  //  April  //  Comments Off on Segmentation Optimizes Customer Experiences

Customer SegmentationSegmentation increases the relevancy of marketing messages, which can result in higher open and click-through rates, as well as stronger sales. When connected to different lifecycle marketing stages, marketers can more effectively message their customers to produce a better customer experience and stronger results, and increase retention rates.

Understanding which channel and what message consumers need is more important than ever. Segmentation helps you differentiate customers in your database so you can develop more relevant and impactful marketing tactics.

Lifecycle marketing is one of the most common segmentation approaches used today. For example, if customers in your database haven’t made a purchase in the last 12 months, they would be added to a reactivation program to incent additional engagement before they go dormant. To enhance a reactivation program, marketers might overlay a value-based segmentation using historical data to understand which customers to focus on to re-engage them. The more robust the segmentation, the more able you are to send tailored messages.

Choosing the right segmentation method depends on the data available and a clear understanding of marketing objectives. The most common segmentation techniques today to consider are:

RFM Segmentation: This helps companies that are looking for an inexpensive and simple solution to drive marketing communications based on the recency, frequency and monetary value of customer transactions.

Demographic Segmentation: This approach is ideal for when demand for a company’s products/services is influenced by characteristics such as age, income and home ownership.

Behavioral Segmentation: This technique groups consumers based on similarity of purchase behavior or affinities.

Attitudinal Segmentation: Businesses segment the market based on how attitudes and needs influence purchase behavior.

Value Segmentation: Marketers can define segmentation based on value place by customers on products.

As you get into trigger campaigns, like abandoned cart or browser behavior, the response rate starts to increase. When you add in lifecycle messaging, you get a higher response rate. Each layer adds an additional conversion rate and leads to a more successful marketing strategy with greater ROI.

Source: Database Marketing Guide, April, 2012. Author, Judy Loschen.

How have you used customer segmentation in your marketing efforts? What types of segments have you implemented?

In what ways has marketing segmentation influenced your customers’ experiences with your business?


How Social Media Is Changing Customer Loyalty Programs

By The Editor  //  March  //  Comments Off on How Social Media Is Changing Customer Loyalty Programs

Social Media IconsThere is no denying the influence of social media on the way that we as human beings communicate on a daily basis. The impact of the digital age will be felt even more in the future if things continue on the same path that it is currently. Not only have we been put in contact with each other like we have never been before, businesses are making the most of social media networks as well. Since the majority of people in the country are constantly on social media sites at all hours of the day, companies have realized that they have a whole new market to reach. But how do they do it without shameless promotion? With social media sites like Facebook, companies from every industry are gaining from a new-found connection with their customers. Since people are constantly updating their activity streams and current states of being, businesses are also able to update their clients and loyal customers with special discounts, offers and marketing endeavors.

A really great thing about being able to do this is the fact that they can connect with their customers in a more timely manner. People are connected through sites like FourSquare, Twitter and Facebook and enjoy the intimate bond that can be formed directly with owners and managers of businesses. Social media networks open the doors to new types of customer experiences by connecting you with them when they are a few feet away from your stores. Many companies have interactive collaborations with social networks in order to bring customers special discounts and notifications of new opportunities at any given moment. Many social media networks are accessible by such devices as the iPhone, Android and Blackberry, which give companies a 24-hour window for advertising to the countless masses.

Sites like Facebook allow artists, like Alicia Keys, to reward the loyalty of their customers and fans by allowing them to listen to their new albums before anyone could even buy it. Not only does this provide an exciting interactive experience for the fans, but it allows for new ways of self promotion in the music industry. FourSquare is the first choice in loyalty reward programs for many. They send out information to smart phones anywhere that people find themselves shopping. This means not only that the company sending the notification will have an increase in sales, but the specific location that customer is pointed towards will directly profit from this type of marketing. For companies that offer many common products to the masses, this means that they are able to maximize the exposure to their target audience like never before. For many customers, this type of marketing brings a new and innovative way to shop and be entertained in the modern age.

Social media is changing customer loyalty programs also by identifying problems through monitoring what people are saying about their brands. They can join the conversation to show that they are listening, to clear up miscommunications or to add clarifications. As an example, Rackspace Cloud Sites have had problems where Robert Scoble acted as a channel of information to their customers on what is happening in real time. Instead of having to wait for quarterly reports to see where a company shines or is in need, they are now able to have instant response as to the impact of that particular promotional project or product. The amount of time and money wasted before is astronomical, and in retrospect, was a very unnecessary expenditure.

Having the ability to track their customers’ behaviors and patterns in buying gives companies priceless information about ways to further market a particular angle. Sites like Zappos have been building more personal relationships with their customers by allowing their employees and executives to communicate directly with the public and marketplace.

If this is a sign of things to come, we have a lot to look forward to here soon.

Source: Customer Loyalty Institute 2012,

How has the development of social media impacted your business? Your marketing efforts?

What type of developments to you project on the social media marketing front in the next 5 years? 10 years?


Using Customer Loyalty Data to Reward with Relevance

By The Editor  //  January  //  Comments Off on Using Customer Loyalty Data to Reward with Relevance

People respond to what is relevant to their needs, desires and motivations. With the help of customer loyalty data, companies are learning about the behaviors of their customers and acting on that knowledge to identify their best and highest-potential customers and personalize their communications. They are beginning to understand how communicating with (not at) their customers in meaningful ways can encourage the customer to consistently choose their brand and ensure long-term growth and success.

Square Peg in a Round HoleWhere personalization was once defined as a greeting which used the customer’s name, personalized communications reflect a deep understanding, appreciation and respect for the customer. By putting the customer at the center of their marketing strategy, companies can ensure that the right content goes to the right customers through the right channels at the right time. And companies can also measure the effects of those communications to understand how to continue to be relevant.

Effectively engaging customers through direct marketing channels hinges on several key principles:

1. Start with the customer data. By using connected data to define a single view of a company’s best customers, organizations can understand customer behavior across online, in-store and direct mail. People respond differently to the same marketing activations and it is important to recognize how customers have responded in the past to inform the next communication.

2. Recognize and reward your best customers. The primary purpose of personalized communication must be to reward customers by giving them a little bit more of what they want and need. If the offer doesn’t do that, then you see lower redemption rates and lower sales uplift, reducing your return on investment. It also weakens your customer’s preference for your brand if they feel like you don’t understand or respect them.

3. Remain communication channel agnostic. Keeping a customer-centric lens on measurement tools and tactics will further cement the alignment between data, decision-making and successful results. Let the customer and the data decide the best communication vehicle. The more effective the channel, the more it should be used. Tailoring channel usage based on the behavior of a customer is another method to deliver relevance and reward your best customers. The best channels to use are the ones that deliver the greatest effectiveness.

Source: Reprinted from Direct Marketing Guide magazine, January 2012.

How have you used your customer loyalty data to better target and reward your best customers?


Restaurants Drive Consumers to Dine Out with Calculated Email Offers

By The Editor  //  January  //  Comments Off on Restaurants Drive Consumers to Dine Out with Calculated Email Offers

Pei WeiWhen Pei Wei Asian Diner introduced the Caramel Chicken entrée, the Chinese food chain took advantage of the occasion to beef up its email database. Pei Wei, which is owned by P.F. Chang’s China Bistro, worked with email provider ExactTarget to create a multichannel campaign centered on email to help spread the word.

The effort included in-store signage, online ads and social media messages that invited consumers to sign up for Pei Wei’s email list for a buy-one, get-one free offer. To get the offer, consumers were asked to text their email address to a shortcode.

“Email is being seen as viable again because of smartphones,” says Jason Miller, digital content and community manager at P.F. Chang’s. “Emails now have even more immediate impact, and with large lists, restaurants can drive a lot of information and traffic quickly.” The campaign led to 20,000 new email subscribers in two weeks. In addition, the restaurant saw 20% redemption rates.

In this tough economy, restaurant marketing departments are facing challenging times, says Eric Giandelone, director of research at food data analysis firm Mintel Group. “With high unemployment and a slow economy, restaurants are using lots of email offers to motivate people to eat out.”

Giandelone says that email is a cost-effective way to send these offers. “It’s a lot cheaper than direct mail or TV,” he says. “But restaurants have to make sure that price promotions are strong enough to get people into their restaurants, and that they can afford them with increasing commodity costs.”

Although email is cost-efficient, Giandelone warns that restaurants should not over-send offers. “Email marketing is a great tool to send offers, but if it is done too much, it promotes a culture of consumers who expect deep discounting,” says Giandelone.

Joel Book, principal of the ExactTarget Marketing Research & Education Group, agrees with Giandelone’s assessment. “Daily deal promotions specifically are something that we are seeing working well,” he says.

Taco John’s International, a West–Mex chain based in North Dakota, is using email combined with social and mobile to attract new customers. The chain uses promotions to help build its list and to drive traffic into the store. For instance, in November of last year, the company sent out emails to its database to promote its new Baja Boneless Wings dish. In order to encourage recipients to go into the restaurant, Taco John’s email included a coupon for a free portion of the meal.

Like Pei Wei, Taco John’s also uses in-store signage that encourages consumers to sign up for its email list by texting to a mobile shortcode. The motivating factor for signing up for the list is a free serving of its signature product, Potato O’Lays.

“Email is a great way for us to help our customers feel special and in-the-know by letting them know about new products first,” says Renee Middleton, VP of marketing at Taco John’s. “We want to give back to our customers with a free product to thank them for being a Taco John’s loyalist.” Email marketing, combined with social marketing, is a great way for businesses to reach out to loyal customers and rewards members and continue building strong business-to-customer relationships.

This year, the chain plans to create email templates to enable its franchisees to run campaigns at the local level. For example, if it’s 18 degrees outside in Fargo, N.D., and traffic is slow, a franchisee will be able to run an 18-cent taco promotion to drive customers to restaurants.

“This is a competitive category, but using emails at the local level is a powerful way to help drive people into stores in their community,” Book explains.

Source: Reprinted from Direct Marketing News magazine, January 2012.

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