Customer Loyalty, Some Things Never Change
Innovation is all around us. It seems that the world is ever-changing … from the way we receive the news, to healthcare, and now even self-driving cars. However, the one place it seems things are slow to evolve is in customer loyalty programs. While every company from airlines to dog groomers seem to be launching a loyalty program, many of them are the same.
You could buy something and earn some points. You then spend those points on goods or services. This is just a variation on the punch card most of us have seen all our lives. When I was a kid, I remember watching way too much TV. They always showed the person getting the toaster for opening a bank account. That ended because no one really cared if they got a toaster anymore. It became all about free checking and other perks, overdraft protection, free checks, etc. I also remember watching the episode of The Brady Bunch where the family was finally going to cash in all of their Checker Trading Stamps. The kids were fighting over what they could get from the catalog, or store in their case. That episode was from January of 1970. Somehow we are still using a catalog today to show people the small amount of things they can choose from to redeem their points.
Today, we have done this both in the way customers earn extra points and how they can spend those points for goods and services other than with the company the program is with.
The “Earn” Side
On the “earn” side, the industry has few options. One option is to create a select few partnerships. Often this is done through the buying and selling of loyalty points. The points simply move from one program to the next. One example of this would be earning airline miles for renting a car or shopping at a certain grocery store. The next option has been the online mall. You can find a list of stores and the points you get for each dollar spent at a specific store. This has been popular, but has a ton of competition and several drawbacks. The third way is through card-linked offers.
The two main problems I see here are that the list of merchants that want to offer discounts is small. Second, if it is not for a bank or credit card company you force your members to register a card and only use that card for the deals. While all of these can be strong, they all only appeal to a portion of your customer base.
Now, let’s tackle redemption. What was the last thing you got from a catalog that made you glad you saved all of those points? Was it that toaster oven you had been dreaming of? The two things that are most redeemed are for points are travel and gift cards. The travel option is easy to understand, people work hard to earn points and want to be rewarded with something they may have only been able to dream about.
Gift cards are even easier to understand. People want to be able to get anything they want. Isn’t it time we give them the ability to get whatever it is they want without having to get a gift card first? What if they want dinner out with friends or laundry detergent, shouldn’t that be what you give them? How much more loyalty can you earn if they know your program is the one that puts them in charge of how they spend their points?
So, now you have designed the perfect loyalty program: innovative, easy-to-use, something for everyone, and choices, choices, choices … all for redemption.
The next issue is how do you make sure everyone knows about it? Do you really want to spend millions on TV and radio ads? Do you just send out a bunch of emails and hope for the best? The answer to this question is not as easy as it once was. With over 300 million people in the US and millions more that are potential customers across the globe, you have to use every trick in the book to tell them. Once you have told them … you have to keep telling them. Do this through social media, email, direct mail, print ads and multimedia ads. As many people as there are in the world, there are just as many personalities. Reaching all of them takes time, patience, and once again, innovation.
Like everything else in the world, if you do not continue to innovate your loyalty program, you will just fade into the pack and eventually fade away.
DBG Loyalty is a leading innovator in loyalty and rewards marketing. DBG was founded in 2002 because the industry was looking for a trusted technology leader who could develop and establish consumer loyalty programs. DBG has customer relationships which span from the time of inception.
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