In a recent Loyalty Conference in Manila, a leading customer loyalty expert identified key points why customer loyalty programs fail.
Mike Atkins, chairman of Customer Strategy Network, cited lack of strategy, no targeted bonuses, no dialogue with members, weak or no soft benefits, poor or little use of data, poor communications, and boring and predictable program as major reasons why programs fail.
“Before you plan to create your program, you must be able to discuss and determine your business and loyalty objectives, decide on KPIs (key performance indexes), document and communicate to the stakeholders, and review and revise regularly,” revealed Atkins.
But most of all, he stressed that a company should have loyalty in the business culture.
Knowledge about customers
He quoted Brian Woolf, a global leader in loyalty marketing, who said that “there will come a time when a company’s knowledge of its customers is more valuable than its products and services.”
Atkins cited the case of Tesco, the world’s third largest grocer and the United Kingdom’s No. 1 with 2,100 supermarkets, for exciting Tesco Clubcard program.
With over 11 million active members who earn one point for every pound spent, Tesco Clubcard has set the standard for data driven marketing that enables it to issue highly customized offers to its customers based on purchased history.
“Clubcard has created ’clubs within a club’ to leverage various interests such as food, wine, healthy living, and baby to deepen relationships by product category,” Atkins said.
This resulted to a 20% increase in redemptions with several reward partners like Marriot Hotels. There’s also a significant increase in redemptions in-store for non-food items such as electronics and houseware and unexpected increase in sales of the above.
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