Most loyalty-marketing gurus agree that the only reason to run a loyalty program is to generate incremental profit. After all, if you’re not in marketing to make money, then you’re in the wrong business. Many loyalty programs use a promotional currency that members can earn and redeem for rewards. But the actual points and miles that members earn aren’t the most valuable currency of your program. That honor belongs to the dialogue in which you engage members and the resulting customer intelligence that ends up in your database. In loyalty marketing, dialogue is the coin of the realm.
Successful loyalty programs require active communication between you and your members— and you have to work at it. You have to fund a regular communications schedule aimed at driving program participation. Your loyalty program is only as good as your communication strategy.
Every chance you get to learn more about your customers—what they need, want, and even dream about—is a chance to improve the effectiveness of your program. Loyalty marketers practice active listening. Asking questions and surveying your members is an easy way to practice the art of dialogue marketing.
Like all other aspects of your loyalty strategy, how much and what type of dialogue you enable depends on the alchemical reaction between the creativity of your marketing team and your available budget. But a few simple dialogue techniques, used creatively to create real value for you and your customers, can bring success without breaking your budget.
Perhaps the easiest way to engage program members in dialogue is to mail them a membership statement at periodic intervals. Personalize statements for each member, and give them a summary view of their program status—their benefit accrual, rewards earned or redeemed, and recent transactions. Include promotional messages to increase frequency and customer value. And remember, the more closely your message reflects member profiles and past behavior, the greater your response rate. Surveys, sweepstakes entries, and other forms of bounce-back mail will also enhance your responses.
Don’t forget to update your database as returned mail warrants—there’s no reason to spend money mailing statements to old addresses. But print statements do require a communications budget, so don’t be afraid to spend money. Loyalty marketers understand that the more you communicate with members, the greater their engagement. Your partners, ifyou have any, may even be willing to fund a portion of your communications in return for promotional consideration.
Besides your regular print communications campaign, your most important communications tool is your Website. Your loyalty program should feature a dedicated site for enrolled members only, which makes it another special-access soft benefit.
Register a unique URL that promotes your program name. Require members to enter their ID numbers to access the site; encourage newcomers to enroll. The site should include information on program benefits, partners, and the terms and conditions of enrollment. Allow members to view account information and, ideally, redeem points for rewards online.
Some loyalty veterans think that they can eliminate print communications altogether once the program web site is up and running. I disagree. Print and Web are vastly different media and should work in concert. Not all your customers surf the Web, and without print mailings those customers will quickly become lost to you. Taken together, print and Web will improve your overall communications effort.
E-mail is a fast, inexpensive way to communicate with your members. Once you incorporate member profiles and transaction history into your database, you can even send multiple, targeted e-mail messages to different segments of your membership. Use e-mail to communicate special offers, new partners, events, redemption options, and other information that can grab member attention.
E-mails can be text only or can include graphics or HTML links back to your Website for more information. Although the HTML versions provide for richer content, they’re more expensive, and not everyone can open them. Let members tell you whether they prefer text or HTML messages, and send test messages to verify that everything works.
But don’t try to do it all yourself— there are many e-mail service providers out there who would be happy to help you. They typically charge a fee per e-mail sent and provide you with basic tracking and response reports. Most can also provide you with a return list of undeliverable addresses, allowing you to update the database.
If your business is based in the brick-and-mortar world, then you should reinforce your program throughout your stores. Signage at all points of sale, at the entrances, and at the customer service counter provides members with constant reminders. Such signage also introduces the program to nonenrolled customers who might inquire about joining. Make enrollment brochures readily available at the cash register for anyone who expresses an interest.
Signage can be as simple as promoting the program name and tagline, but you should always make a call to action if possible. Provide customers with a way to learn more–by asking an associate, calling a phone number or visiting your Website. Remember that on-site communications provide constant reinforcement for your program. Nonmembers learn about the program on your home ground, where your facilities and customer service shine. As you introduce special offers or additional program features, on-site promotion serves as a fast, efficient, and inexpensive vehicle for making members aware.
As in all other things, moderation is key to a successful dialogue marketing campaign. Go easy, and be attentive to consumer privacy. Don’t try to collect too much information too quickly. Dialogue implies two-way communication, not an interrogation. And remember, collect only information that you plan to use; members will expect more-relevant and personalized messages in return for volunteering information.
By listening actively, you’ll learn things about your best customers that your competitors will never know. Dialogue yields competitive advantage, and competitive advantage improves your profitability. Take advantage of it and start minting your own loyalty coin of the realm.
Rick Ferguson is the editorial director for COLLOQUY, a provider of loyalty-marketing services.
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