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Why Loyalty ? – Lessons Learned

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Why Loyalty ? – Lessons Learned
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The plethora of loyalty and rewards programs we encountered over the past week inspired this mini-series “Why Loyalty”.  

As a reminder, the question was not about whether the brands we examined should or should not engage their customers with a loyalty program. We’re going to accept that as a given for smart marketers. The question was rhetorical, i.e. we were asking ourselves, “if you’re going to do it that way, is a loyalty program your best option”?

By asking the question and documenting a lesson or two from each situation (we called each one a Loyalty Truth), we reminded ourselves of best practices brands should incorporate in their strategic planning as well as trends impacting the future of loyalty marketing.

Through our quick study of program elements offered by Immediate Health Care, Skechers, Banana Republic, and Marriott, we arrived at this short list of take-aways:

Loyalty Truth #1:

Consumers have expectations of the “L” word, and any brand proclaiming it has a loyalty program needs to meet or exceed minimum requirements. By not offering a fully complemented value proposition that makes enrollment and participation worthwhile, brand damage can result.

Loyalty Truth #2:

If the only option for loyalty program design results in a commodity approach to loyalty, brands should consider ripping up the script and trying something innovative and new. The risk in doing so is minimal compared to offering another “me-too” program.

Loyalty Truth #3:

With competition in the payments business at an all time high, centering a loyalty program offer on a private label credit card is a risky strategy. Retailers need look in the opposite direction and consider accepting non-traditional forms of payment and opening up the ways their customers can pay, while still collecting rewards.

Loyalty Truth #4:

The substance of reward offers needs to be challenged daily. The door is open as never before to delight consumers with experiences, in-store events, and status-oriented privileges that register well but cost little. The days of centering value propositions on gift cards and merchandise may be nearing an end.


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