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Loyalty Marketing

We all know that the market has changed from past couple of years in terms that consumers have started demanding more. Rewards that have evolved in the marketplace from being a nice little extra for one's loyalty to being perceived as an entitlement. Concurrently, consumers have shifted, to some extent, away from a desire for possessions to a desire for experiences - partly due to changing demographics. Overall, consumers are looking for the meaningful value and relevance in all their buying.

This rising tide of expectations necessitated that loyalty marketers like URconnect India must develop a truly innovative loyalty programs (Please do not confuse "loyalty" with "rewards" as Loyalty denotes advocacy and commitment not points), utilizing loyalty marketing best practices. In reading through this page, and URconnect India's website for that matter, keep in the back of your mind the question of how your program is tapping into not only changing lifestyles, but changing attitudes of their customers. The answer is not just in the rewards catalog, but in understanding the fundamentals of loyalty marketing.

For any loyalty programs to evolve, progressive organization recognizes that the absence of right "customer identification tool", it is very difficult to recognize individual customers and reward them for desired behavior. Both businesses and consumers have recognized the value of loyalty programs.

Loyalty Marketing

Time and again it has been observed that loyalty programs are often developed with good intentions but unclear objectives. Loyalty programs have many purposes, the greatest value that is created for organizations is the ability to identify individual customers and to measure and understand their individual buying behaviors. This consumer buying behavior data far outweighs the "currency" value of providing consumers the opportunity to build a reward opportunity by shopping for one particular brand. This opportunity is often misunderstood by organizations and consumers alike.

Customer Recognition

"one product fits all" approach is no longer effective. This may be shocking news to some, and it doesn't matter what business you are in or the demographic of your customer; you do NOT need to treat all customers the same.

Loyalty programs need to be designed with more targeted rewards; they need to communicate differently with different groups of members based on their value; and they need to provide greater value at higher customer value tiers, by rewarding best customers to encourage higher spending levels.

we would suggest that you start discriminating among your customers.With each loyalty tier comes increased recognition. That recognition can be very tangible e.g. bonus points, or intangible e.g. early boarding on flights. For the frequent flyer, being able to board an airplane and hog-up all of the overhead storage space before any of the common travelers board, is nirvana. Or being able to go through an expedited airport security line is heavenly. Don't underestimate customer recognition. And here we are talking about the intangible.

What are you doing to address your customer's craving for recognition?

Program Positioning

Every company have diffrent set of customers and so are their needs. Hence it is essential for the company to position their loyalty program as per their customers. Program positioning differentiates the loyaty programs. In Most cases we have observed that companies/loyalty consultants try to copy loyaty programs that are already available in the market.

Program differentiation starts with the positioning of your program. Most programs don't have one - hence why so many programs look and act the same.

Your program's positioning affects everything you do from:

  • how you communicate,
  • what you offer,
  • how you want to be perceived

We can't emphasize this enough. Develop a vision or positioning for your program, before you even begin developing the mechanics.

URconnect India can help you in positioning your loyalty programs based on:

  • the objectives of this program?
  • the target groups for the program?
  • the needs of this group that also satisfy's the needs of your top customers?
  • What customer needs will it satisfy? (tangible benefits, intangible benefits; rate the benefits, cost, feasibility and competence;financial value, relevance for the consumer, attainability)
  • identifying benefits (brainstorming, small study to measure general feedback on the benefits, large scale study to identify the main value drivers)
  • increasing your differentiation from the competition?
  • How will customers be rewarded, data be captured, analyzed and actioned?
  • ownership of the customer relationship?
  • customers you cater and their buying behavior
  • ways to effectively communicate

  • and many more based on the industry you serve.

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Loyalty Program Strategy

Regardless of how you develop your loyalty program - based on hard benefits (e.g. discount programs, cash back) or soft benefits (e.g. access, special privileges, exclusive partner benefits and other offers) - We at URconnect India will make sure that there is alignment between your customer and the loyalty program i.e. the program supports the customer experience and not the other way around.

There truly is a sequence that URconnect India follows while developing loyalty programs. Though too many program designers take short cuts and jump to platform selection or program execution and don't do the basics:

  • Perceived Program Objectives
  • Program Positioning
  • Program Strategies
  • Financial Analysis
  • Value Proposition
  • Business Analysis
  • Data Analysis
  • Platform Selection
  • Segmentation & Test Plan
  • Measurement Plan
  • Exit Strategy

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Loyalty Program Lifecycle

All good things come to an end. Most companies/program designers fail to accept or they just ignore this fact. Any loyalty program if degigned properly must follow the following phases:

  • Define the Program
  • Identify Key Performance Metrics
  • Build Action Plan for Implementation and Customer Penetration
  • Research for Technology, Partnerships to ensure customer acceptance and support
  • Program Communication Startegies
  • Pre Launch, Launch & Post launch Plan
  • Exit Strategy

While exit strategies should be planned for in the initial program construction, let's face it, some programs aren't designed as they should be. As such, if your program isn't achieving the financial returns envisioned, you may want to plan your exit strategy.

The number one goal in any planning exercise should be to "do no harm." The last thing you want is a bunch of angry customers out there bad mouthing your brand - not to mention the fact that a loyalty program with hard benefits or rewards is really a financial obligation to the program members.

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