Source: Sunday Times Second Edition – Lifestyle (Sunday Times (timeslive.co.za)

There is no one-size-fits all when it comes to what constitutes a successful loyalty programme and every potential offering needs to be linked to the needs of its current and future customer bases, says Gordon Dodge, a consultant at Eighty20.

 

❝	“Successful programmes are those that provide valuable data for brands to drive the business forward in terms of growth opportunities,” he says.

 

Programmes that work typically include a number of key elements. Chief among these, says Dodge, is a clear value proposition. “Customers need to have a clear understanding of value they will receive and what they need to do to receive these benefits. If they understand the benefit, they will be motivated to join and consistently engage with the programme,” he says, adding that over and above rand value, an intrinsic emotional connection or value-based reward are key drivers to motivation and loyalty.

Ease of use is also important. “The structure and design of the programme needs to be straightforward and easy to engage with. Ideally any programme should seamlessly fit into the customer journey. A complicated or burdensome programme is likely to become discouraging over time, “says Dodge.

Increasingly, personalised offerings are becoming a key element of successful loyalty programmes. Dodge explains that to succeed at personalised offers requires the organisation to master its customer data and draw insights from it. ” Not only does personalisation introduce a feeling of recognition and relevance to any offer, it makes the benefits more valuable to the customer and drives higher engagement.”

 

❝	Customers need a clear understanding of the value and what they need to do to receive these benefits in order to be motivated to join and engage with the programme

 

Successful programmes make effective use of data across the organisation. “Loyalty programmes help identify and profile customers, which enables brands to enrich their internal view with numerous external data sets,” says Dodge, adding that this deeper understanding can be used to identify customer segments or profiles that have the most spend potential and how to better position their brand and propositions to attract and grow these customers.

Consulting firm McKinsey maintains there are four steps organisations need to take if they intend to create a winning loyalty programme. The first is to invest in customer data analytics to drive usage. This requires leveraging the data businesses have on their existing customers and their spending habits to run targeted digital-marketing campaigns. The second step is to visualise tangible benefits to encourage engagement.

Customers need to be able to easily see their up-to-date progress towards earning rewards. The third step is to gamify the programme to improve the customer experience. Lastly, companies need to broaden the reach of their loyalty programme by creating a community of customers with a shared passion for the brand. This, says McKinsey can create cycles of positive reinforcement, provide customers with a sense of belonging and increase the perceived authenticity of an organisation’s brand communication.

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