In the first half of 2013, we’ve seen continued and steady increase in the use of loyalty programs across a variety of industries to sustain customer engagement. In my company’s recent insights piece, “Consumer Loyalty Programs: Leveraging the Loyalty Lifecycle,” the popularity of loyalty membership is quantified at more than two billion strong in the U.S. alone. The research goes on to say that, “Since simply having a loyalty program is no longer a competitive differentiator…marketers are challenged to elevate their loyalty programs to create a positive and unique customer experience at every touch point.”
So, how can email marketers best contribute to the success of these loyalty programs?
Consider a combination of tried-and-true methodologies for identifying the right customers for the right message at the right time, infused with fresh communication approaches that pique interest and promote brand engagement.
Customer Database Prep Work and Methodology
Rather than a one-size-fits-all approach, take the time to identify some logical key groups within your loyalty customer base that will allow you to customize your email communications specifically to support the most important aspects of your loyalty program for a given set of customers. This type of message relevance will help to create more program and brand value.
The first step in doing this is analyzing your data. Doing your homework on customers and/or subscribers allows for better understanding of their needs and gives you a huge leg up in providing relevant content.
If necessary, a database hygiene audit might be a good place to start in this step so you can truly focus on your core records. And an additional consideration at this stage could be data enhancement through data append (e.g., demographics) if your existing information is too thin to allow you for categorization that matches your messaging structure.
However, most important to this step is data analysis. One example is simple RFM (recency, frequency, and monetary) scoring. Who are the best customers? Your weakest? Who’s new? Who’s inactive or lapsed? This type of application allows you to identify where your loyalty members are in the lifecycle of your program.
All of these phases can positively influence consumer perception as they engage with your brand’s loyalty program. Armed with this type of data grouping, you are much more likely to deliver the right email message at the right time. Strategies and tactics within each phase should both support a differentiated customer experience, while supporting the business’ phase-specific objectives.
Nuts and Bolts of Relevant Email Marketing
As with any email marketing campaign, those designed to support loyalty programs must have the basics nailed down. The three to focus on here are:
- Content. As my company’s recent insights piece states, “According to ACI, 81% of loyalty program members say they don’t even know the benefits of [a loyalty] program, or how/when they will receive rewards. The more familiar customers are with your program’s benefits and interaction touch points, the more those incentives will motivate them, and the more apt these customers will be to advocate the program to friends, family, or other networks. Brand and reward education during the onboarding process is a fundamental tactic to achieve a high lifetime value with customers.”
- Incentive. If at all possible a tone of exclusivity and an offer the consumer can’t refuse work best for a loyal customer.
- Differentiation. This means finding ways to break through the inbox clutter. One tactic is to make your communication time-sensitive with the added courtesy of service. For example, a series of communications that reminds customers to take advantage of an exclusive offer before it expires.
Merging Database Insights and Relevant Email Messaging to Strengthen Loyalty Marketing Programs
In a newly released 2013 Loyalty Census (covered in this DM article: “Loyalty Programs Grow, But Participation Sinks“), Colloquy uncovers some startling statistics including:
- Loyalty programs grew by more than 25 percent in the past two years – but member activity levels have dropped.
- Some 2.65 billion people were enlisted in loyalty programs in the United States in 2012, a rise of 26.7 percent from 2010, but active participation – defined as one engagement within a 12-month period – fell by 4.3 percent.
The article goes on to identify that “…it’s crucial for companies to strengthen loyalty programs through innovation and relevancy. As competition increases, innovation through stronger reward initiatives, use of soft benefits, and use of [new] technologies will benefit the brands that offer loyalty programs.”
We must leverage these realities as incentive for taking loyalty marketing support communications to the next level. As we look to the immediate future, two approaches include: refreshing the program by incorporating additional layers of rewards for actions other than simply purchasing (e.g., online interaction), and expanding loyalty member focus by integrating technology to allow for a holistic view of the customer/brand interaction. This type of shift will enable better customer relationships and retain customer loyalty.
Some additional articles addressing the multi-channel efforts for loyalty program support include: