Moving Forward

As marketers in this new economy, we are constantly challenged to create programs that generate business, while showing a positive return on investment. Because it is more expensive to acquire a new customer, the best return on investment is to reward the ones you’ve got, and offer incentives to get them to spend more. This holds true whether you are consumer-oriented or B2B.

This fact has lead to the explosive growth of loyalty programs. In the consumer space, the average U.S. household belongs to 14 loyalty programs, but is only active in 6. So, are these programs still meaningful to customers? According to a new report by the Chief Marketing Officer (CMO) Council, marketers need to closely monitor these programs, or risk diminishing returns. This report found customers want clear, understandable offers and more personalized messaging.

The top 4 Loyalty Program mistakes:

1. Too many conditions and restrictions

2. Rewards that lack real value

3. Communications and service not targeted specifically for members

4. Too much non-relevant junk emails and direct mail

Another interesting finding was the disconnect between how marketers feel they should communicate with their best customers compared with how customers really source loyalty program information. 60% of the marketer respondents said that they planned to increase their use of online tools and social networking. However, the report found that 65% of customers acquired information through point-of-sale information, company websites, company representatives and word-of-mouth. Only 11% of consumer respondents found program information through online ads, 4% in social media networks and 3% in blogs.