Loyalty’s Lost Mantra: Relevant Messaging

In the 1977 Woody Allen classic “Annie Hall,” actor Jeff Goldblum, portraying a Southern California partygoer, tells his guru over the telephone—I forgot my mantra.

All these years later, the same could be said for the loyalty marketing industry.

Loyalty marketers worship at the personalized, relevant, value-added communications altar, because that’s what our best customers demand. But there’s evidence indicating that far too often our mailings, e-mails and social media messages are falling short of the mark.

In an April 2009 study conducted jointly by Colloguy and customer loyalty agency Direct Antidote, more than 2,000 U.S. consumers in an online panel were asked how relevant they found loyalty program communications on a 10-point scale. Just 32% of consumers surveyed rated the relevance of program communications an 8 or higher. Therefore, 68% of U.S. consumers think loyalty program communications are largely irrelevant.

These numbers may be dismaying. But the following survey responses provide insight that marketers can use to better target their communications in a climate marked by budget cuts and padlocked consumer wallets:

From 2007 to 2009, engagement with loyalty-program statements remained stable in the General Population—each year, 41% of respondents classified themselves as active recipients. Furthermore, two-thirds of respondents indicated that they like receiving program information via mail and e-mail, and about one-third said they really like such information.

The Senior (age 60+) demographic reported a spike in rewards program engagement. Between 2007 and 2009, the number of Seniors that reported reading special offers sent via direct mail increased 64% and the number who read mailed program statements rose 21%.

Millennial consumers (age 18-25) outpaced all survey demographics in engagement with rewards programs through new media channels. Somewhat expected, 52% strongly appreciate communication via cell phone or text message, while 55% said the same about social networking sites.

Respondents in our Core Women segment (age 25-60 with a household income between $50,000 and $125,000) have also become more engaged in reading special offers they receive in the mail.

The relevance gap

While consumers demonstrate a willingness to engage through loyalty channels, no more than 41% of any given segment find relevance in their loyalty communications. There seems to be a disconnect that occurs when consumers receive a loyalty communication and when they actually read it and fail to find an offer that personally resonates.

Fortunately, the data offers an opportunity for loyalty marketers to step up. Based on the results of our survey and on industry trends, I suggest the following approaches to reinvigorating your communications, resonating with your customers’ interests, and reinforcing the value of your offers and your program as a whole.

Appeal to changing values. Given the emphasis in the news media on the economy and sustainability, it’s no surprise that consumer values are changing. Affluent consumers are now leaner and greener, and every consumer segment wants to both stretch household budgets further and make more ethical purchasing decisions.

Be attentive. Whether the topic is sustainability, health care or the economy, demonstrate awareness of these values as reflected in the customer data by weaving them into your offers.

Think multi-dimensionally. The surest way to increase communications relevance is to maintain message consistency across all dimensions of your messaging universe. Content, pricing, offer, tone of voice, style and timing of delivery must all align with customer expectations.

For example, you might spend time and effort designing a complex, targeted direct mail piece but the piece is so complex and takes such a long time to get into your customers’ hands that the timing is off and you miss your window. Had you sent out a simpler, targeted e-mail or text message to a smaller, higher-value segment, you might have achieved a better return at a lower cost.

Talk it out. Leverage your customers’ desire for dialogue by encouraging them to play a greater role in developing your communications. Ask questions, invite feedback, establish new touch points, and build your messages based on what you learn.

Value is its own reward

As marketers, we strive to create messages that appeal as close to each segment as possible. Practical and financial considerations make this goal challenging, but too often, marketers lack any kind of action. Focus on the small wins that create relevance and deliver ROI. Practice consistent, value-driven, multi-dimensional relevance, and you’ll reap the rewards. To engage with and retain our most valuable customers, we must unite with and aid our best customers in that common search for value.

Di Cullen is president of customer loyalty agency Direct Antidote. She can be reached at [email protected].