Retailers should think beyond loyalty marketing

Retailers should think beyond loyalty marketing

Articles
Australia’s retailers should rethink the role of loyalty management in order to keep pace and improve relevance with their customer base, finds KPMG research conducted for the Coca-Cola Retailing Research Council of Asia (CCRCA). The research report Making the Connection: Rethinking the role of loyalty management was based on in-depth interviews with over 50 executives and senior managers from 27 retailers across 13 countries in the Asia Pacific region. It revealed that retailers were slow to react to react to challenges brought on by increased competition and innovation in technology in a shrinking market. Strategies that worked for the past decade are no longer delivering the same returns. “The challenge that most retailers are currently facing is one of the evolving consumer. We are seeing an unprecedented rate of change…
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Why you need one loyalty strategy for customers AND employees

Articles
Loyalty is a fluid concept. We are loyal to our football teams, but are we really loyal to brands? Equally, can you ever be truly loyal to an employer? Understanding loyalty is key to understanding the strategies that strengthen loyalty, and this applies for both customers AND employees. They’re both human beings, and they both understand that loyalty stems from no more than the memory of past interactions between your brand and that person. They’re both human beings who dictate the profitability of your business through their engagement with your brand. If customers love it, they buy it. If employees love it, they sell it. That’s why, as a business, you need one loyalty strategy Building a strong brand We may have strong external brands, but do we back that…
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Is Loyalty a type of customer behaviour?

Articles
It is a known fact that having a loyal customer base helps an organization in several ways, such as reduction in costs and an increase in profits. It’s true that a customer’s average consumption increases over time, hence bringing in more sales revenue. Also, a loyal customer base enables the organisation to cost reductions through reducing sales cycles, fast-tracking order processing, and increasing customer referrals. But, the question is, is Loyalty a type of customer behaviour? I am of the view that loyalty is a customer behaviour which is influenced by many different factors that cannot be easily identified or captured in a single satisfaction survey. For example, loyalty can be driven by: (more…)
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Offering discounts often tends to reduce customer loyalty

Articles
“Oh yes, we love you and your product. This is just perfect for us, and we would like to do business with you, but your price is too high. Can't you do something so we can give you our business?” How many times have you heard something like that? Do salespeople get nervous and worry about losing such a piece of business? Honestly, I think most of us try to get the prospect to focus on the price/value relationship. What usually happens, however, is we try to find out how much the prospect would be willing to pay and then negotiate the price down to almost that level. When I ask this question of overcoming price objection, most salespeople I know respond to it by trying to find out how…
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Pros and Cons of Rewards Programs

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Nearly everyone has or wants to have a customer loyalty rewards program. Rewards programs operated by large businesses are fairly successful. But, this does not apply to majority of small and medium businesses. I believe that every positive aspect of a rewards program almost always has a negative side. Here are the major pros and cons of rewards programs. Pros Consumers are aware how rewards programs work - you spend and collect points. It is simple and easy to understand. Rewarding points will enable you to reduce price discounting. (more…)
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Six key questions to audit a loyalty program

customer acquisitions, customer retention, loyalty, marketing, word of mouth
These are the six key questions which you would use in an audit of a company's customer loyalty program: What virtues of your business have the largest impact on your customers' satisfaction? How do you divide and define your customer segments? Whose responsibility is customer service? What is your retention rate and what is the trend? What is the lifetime value of a typical customer? What percentage of new customers comes from recommendations and how has this changed over time? (more…)
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Keeping the pace with customer expectation

customer retention, loyalty, marketing, strategy
The significance of data is that you can see behaviour change daily. If a trend emerges from analysis of your data, it is appropriate to review marketing strategy and assess the success or relevance of the plan under way. The data and the insight they provide become an extremely precious indicator of customer satisfaction. Data linked to loyalty programs becomes a rich source of market research. It is not what people say they do but what they actually do. Naturally, market research still has a valuable role, it is still required to determine why customers have changed but its use has become even more focused. By analysing your loyalty program data, you can recognize which of your customers visit frequently (and spend a lot) which ones visit infrequently (but still…
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Customer retention is not easy but it is rewarding

Articles, customer retention, loyalty, marketing, strategy
Customer retention programmes have historically had insufficient priority in most sectors, but then the forces affecting customer churn, and therefore the need for retention focus, have never been so great. The idea is not new. What is new is the approach. What is now being witnessed is a market increasingly commoditised and far more susceptible to competition - from other players and from new media. Customer knowledge and confidence have had a significant impact: it has become so much easier to compare and to swap products. Changing sales structures and wearing away of face-to-face interaction have helped to dilute or eradicate conventional 'loyalty'. What direction does this give the services marketer? It leads the way to a re-examination of profit drivers and a critical evaluation of current programmes. The business…
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Stimulate Loyalty – Power of networks, data and convergence

Articles, customer acquisitions, customer retention, loyalty, marketing, strategy
Loyalty schemes are an established feature of the retail and services landscape. They have become widespread and arguably ubiquitous. There are a number of major groups of loyalty schemes, including: retailer loyalty schemes, financial service loyalty schemes, online reward schemes, frequent flyer and other travel reward programmes, geographically based loyalty schemes, and coalition loyalty schemes. Businesses have been keen to enhance customer retention, to find approaches to increasing customer spend and encourage customers to act as advocates. When the first loyalty programs hit the market uptake was huge and rewards for marketers were high. Some years on, however, the market is overrun with these schemes, each with little point of difference from the next. As a result, consumers are evermore difficult to please, and uptake on offers is reducing. One…
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Generation Y – Exploring marketing opportunities

Articles, loyalty, strategy, word of mouth
It takes more than selective targeting to market effectively to Generation Y. Members of Generation Y seeks products that create an ambiance and community experience, rather than just provide a function. They like brands to express a reality in which they are involved, interconnected, and interactive. To be successful, build a brand with them, not for them. Computers have made knowledge cool through a fusion of fun and learning. Merchandise concepts that make exploring the unknown fun, bring information to life, or challenge consumers to design their own products will be a sure-fire hit. Also, look for cause-related tie-ins, lifestyle sponsorships, interactive promotions, etc. to become more means by which brands can provide memorable experiences and build community. Some very large brands are struggling to learn these lessons. Therefore, they…
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