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2013 Loyalty Program Management Checklist: Q&A

By Dec 11, 2012

Are you getting the maximum bang for your buck from your loyalty program? PROMO checks in with Dana LaSalvia, senior director of marketing at Rymax Marketing Services, who talks about 2013 trends, challenges, retail-buying behavior and what’s up with the color purple.

PROMO: What are the top three trends in loyalty reward selection that you see for 2013?
LASALVIA: Top redeeming categories are consumer electronics, fashion and home commodities. Trends include celebrity endorsed merchandise, the hottest consumer electronic gadgets and lifestyle entertainment products.

PROMO: What is the most difficult challenge in maximizing the performance of loyalty programs?
LASALVIA: Strong, focused and frequent communication is key to maximizing performance of all loyalty-based programs. Ensuring that the end-user (consumer) fully understands the benefits and requirements of participation. One of the challenges that always comes into play is total program participation. So, your communication strategies need to speak to all demographics and create a buzz. Consistency and a strong marketing push is key.

PROMO: Why do you think so many consumers are registered for loyalty programs that they don't actively participate in?
LASALVIA: Although the dynamics of loyalty programs have definitely changed over the years, leaving the market oversaturated, it is more important than ever for companies to find a way to relate to the everyday consumer to help drive repeat business and keep participants active. A few reasons why consumers don't actively participate are: the level of engagement is not there—they don't feel the perks or rewards are desirable. No. 2, the program is not compelling; the rewards need to be aspirational but also attainable and finally, there are more choices today and less loyalty from the companies.

PROMO: How big of a role do rewards play in these programs?
LASALVIA: Our loyalty redemption tracking and analytics shows that merchandise rewards over cash, comps, retail gift cards and a simple thank you play a significant role in determining repeat business. Merchandise has trophy value. It is a tangible that individuals can share with others which in turn elevates the loyalty programs visibility and relevance. Consumers want to feel like they are getting their monies worth and the reward is not only earned but deserved. With this mind set, it is important that the rewards selected in the program mimic this same value.

PROMO: What other components of loyalty programs would you say are as important as rewards?
LASALVIA: Ease of use and level of accessibility: consumers don't want to be bothered with mail-in rebates, long registrations or extensive paperwork. Companies need to keep this in mind. Mobile applications, sign-up sheets via Facebook and Twitter contests are your best bet.

PROMO: What are the key ingredients a brand should think about when selecting rewards for a loyalty program?
LASALVIA: Reward selection is a key element to program success. A few important areas for consideration are: Participant demographics, soco-graphic and geographic location; current trends; variety in price point; brand name rewards versus no name; product shelf-life, seasonality, staple items, and retail appeal.

PROMO: Do retail-buying behaviors reflect reward selection?
LASALVIA: Yes, without question. Consumers are brand savvy and want to be wearing, using and carrying the latest trends. Brand perception, television, celebrity appeal, generational peers and popularity are all big drivers.

PROMO: What about celebrity endorsed products? How do they impact reward selection?
LASALVIA: In today's retail environment celebrities create their own fragrance lines, endorse products they believe in and license brands. The everyday consumer is more likely to redeem for a reward with a celebrity backing because of the brand appeal.

PROMO: How does color fit in?
LASALVIA: The use of color plays a large role in reward selections. The days of black headphones are dated. Now consumers enjoy freedom of expression and want to showcase their sense of style more than ever. For example, red, purple and gold headphones on business travel are very acceptable and carrying a purple Michael Kors handbag makes a statement.

PROMO: What is the one tip you would like to leave with our readers?
LASALVIA: The importance of considering these four important factors when creating a loyalty program: How you will gain participate buy-in and break away from the loyalty clutter; how easy will you make your program to participate in; what new age marketing tactics will you use to reach the largest audience and how will your rewards resonate with today's consumers?