MOTIVATE Your Members

Getting people to sign up for loyalty programs is no problem. But getting them to actually use the programs is another story.

While the average U.S. household belongs to 14.1 loyalty programs, per a 2009 study from loyalty consultant Colloquy, they’re active in only 6.2 of those. The take away? Marketers need to shift focus from growing membership to increasing the value of the programs.

• INVEST IN COMMUNICATIONS TO HIGH-VALUE, HIGH-POTENTIAL MEMBERS Use a mix of e-mail, the occasional direct mail piece and a Web site to communicate on a regular basis. Use self-reported preferences to make sure every channel that members see is relevant, says Kelly Hlavinka, a partner at Colloquy.

• BUILD UPON THE IDEA Implement targeted bonuses to high potential customers to sweeten the deal. United Airlines’ Elite Choice program offered gifts to premiere members if they met certain mileage thresholds.

• EXPLORE PARTNERSHIPS Seek out non-competitive partners that can be looped into the program. Convenience store Speedway added manufacturers that sell products at its locations, including Coke and Krispy Kreme to its Speedy Rewards program.

• TOUGH LOVE Identify simple, well-communicated rules to keep members active in the program. Speedway manages the health of its program by notifying members that if they don’t fill up their gas tanks within 12 months, they will be removed from the program.

• FOSTER WORD OF MOUTH ADVOCACY Investing in incentives or bonuses for referral behavior can go a long way with members. Intercontinental Hotels ran a six-week test offering its top Priority Club members triple points for friends who booked a room night, Hlavinka says.
  — PATRICIA ODELL

IDEA TO STEAL: DAIRY DRIVE

THE DANNON CO. HAS ROLLED ITS FIRST LIMITED-TIME LOYALTY PROGRAM ACROSS ALL OF ITS BRANDS.

The program, Dannonomics, celebrates the firm’s 90 years of making fresh dairy products and offers consumers purchase incentives through October, including ways to earn up to $15 in savings through instant coupons and mail-in rewards.

Participating brands include Dannon, Activia, DanActive, Danimals, Light & Fit and Dan-o-nino.

At www.dannonomics.com, visitors will find all of the details about the promotion. For example, if a customer buys $15 worth of any Dannon brand, she will get $3 in coupons. A send-to-a-friend link lets visitors share word of the promotion with friends and family. The promotion can also be easily shared via a number of social networking sites, including Facebook and MySpace.

“As consumers re-evaluate their spending and focus on finding value, better-for-you food options shouldn’t have to be a sacrifice,” says Eric O’Toole, senior vice president sales at Dannon.

Supporting the campaign, created by Dannon and Marketing Drive, are TV spots, in-store materials, messaging on lids and wraps of Dannon packages, and magazine coupon inserts.
— Patricia Odell

U.S. LOYALTY MEMBERSHIP BY THE NUMBERS (in millions)

DID YOU KNOW?

• For the average brand, approximately one-third of all highly loyal consumers in 2007 completely defected to another brand in the same category in 2008, according to a recent CMO Council report.

• According to the report, the reasons for the decline for many major brands was not just because of churn or defection but because those brands had greater difficulty converting new buyers to replace the lapsed loyalists who left or cut back on the brand.

• Financial analysis of selected leading brands — all blinded in the report — determined that they could have seen annual revenue increases of between 4% and 25% in 2008 if they had prevented their highly loyal customers from reducing or abandoning their buying.

Got an incentives tip to share? Contact Patricia Odell at [email protected]