Sunday, 19 February 2012

Loyalty programmes usually don't deliver positive brand experiences


I have said before that fanatical loyalty should be a brands primary objective - but I am not a big fan of trying to do this via so called loyalty programmes.
Digital technology makes it easy to set them up but brand organisations should think very carefully before doing so.
Too many loyalty programmes are looking for quick sales but do nothing more than give regular purchasers discount cash-backs and coupons.
There is an interesting article from Colloquy about recent research that shows that only 17% of consumers say loyalty programs are a "very influential" factor in determining a purchase. They suggest that this is because loyalty programmes have fallen into a trap of copying one another with discount and cash-back rewards that increasingly look alike to consumers.
Brands that get it wrong waste resource, turn-off consumers and lose margin.
If a brand does decide to set-up a loyalty programme it should focus on demonstrating that the brand recognises and appreciates their consumers loyalty by adding value to the brand experience delivered.
The Colloquy articles suggest three tips:
  1. Give consumers what they want - smart analysis of consumer data makes this possible.
  2. Make consumers feel special – give them a sense of VIP insider status.
  3. Keep it simple and be truly consumer-centric.

There may be more effective ways to deliver positive brand experiences that drive loyalty and potentially advocacy. 
Tread carefully.

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