the first Things to Know on the loyalty programs

Loyalty marketing

This is the first installment in a series to article focused on innovation loyalty programs…


How do we create authentic Customer loyalty?

We must realize that Consumer expectations are changed.

Consumers trust other consumer nearly as much as they do family members . Consumers expect on demand information and they demand transparency in all facets of their life.

To meet the customer’s wishes, the marketers has to Stop thinking about campaigns and start thinking engagement.

So it’s no surprise that ratings and reviews are used not only for restaurants, hotels, electronics, but also for taxis, employers, and even healthcare providers.

To meet the customer’s wishes, the marketers Stop thinking about campaigns and start thinking engagement. Marketers who continue to build campaigns, and make offers, around products and product features will be perceived as “tone deaf” to the multichannel customer. Customers will engage with marketers who meet their needs – their changing needs – for different information and options during the buying journey. Marketers who continue to “go to customer” with product-centric campaigns and offers risk becoming irrelevant.

Also, truly great loyalty strategies create a meaningful exchange of value between the company and the customer.

This exchange also, encourages customers to share all kinds of profile, preference and behavioral data. But it’s difficult to build differentiated experiences based on what you think you know about your customers. Loyalty insights, combined with other sources of customer data, can help customer experience teams create and deliver personalized experiences that inherently exceed expectations.

Today the loyalty programs are growing more and more:

It is estimated by Colloquy (2015) that there are over three billion loyalty program memberships in the US (a 26% increase from their 2013 census) – with the average US household participating in 29 programs. Approximately 58% of those memberships were inactive (defined as no engagement within a 12 month period), bringing the average household active participation to 12 programs. That is a lot to compete with.



Not surprising, loyalty varies across industries. As reported in the New York Times, Forrester Research found that across 12 industries, retailers inspire the most loyalty while others, like TV service providers and internet service providers proved more fickle. Most interesting is that “A whopping 98% of USAA’s credit card customers would consider the firm for another purchase, which ends up 24 percentage points higher than the average across credit card firms.” This research only reinforces the critical importance of understanding the fundamentals of loyalty marketing.

an first loyalty program was launched in 1981 by American Airlines, and was quickly replicated by other airlines and travel companies.

American Airline with your the loyalty program (Frequent Flyer) AAdvantage with 67 million subscribers since 2001, gives the possibility to its customers to get the best discounts on air travel and upgrades to first class.

AAdvantage is, in fact, a loyalty program in “coalition”, which thanks to a gamification strategy, allows customers to earn miles by traveling and purchases at American Airlines’ partners, to convert them into travel, products or exclusive events.

The rise of new population segments, social networks, apps and smartphones makes it necessary to rethink the way we draw and run these programs and the integration with gaming mechanics.


Having said that, you have to follow four steps to create a correct strategy of loyalty:


  • Customer  Knowledge

A database that contains detailed and correct information on your customers is a strategic weapon that will greatly influence your success.Not only since the advent of Customer without detailed knowledge about its customers no company will be able to compete.


  •  Identify the Value Proposition

This part is one of the absolutely most important steps before implementing a Customer Loyalty Program. What to offer customers? What is the value proposition? If the value is not well received by customers, the program will not work at all. Therefore use extra time to develop your value proposition.


  •  Create Program Goals

Clearly identify your program’s goals and target groups. More importantly, the choice of target groups should be directly linked to the benefits your loyalty program must offer, as each target group has its own preferences and demands different benefits.


  • Integrating social media

In an age of social engagement, you need is also, a Twitter account, a Facebook page, or a LinkedIn group and an exec that cares enough to check in for a minute every day to find out what people are saying.

The story you tell must match the experience people have your firm.

Also,the companies by introducing elements of play in loyalty programs, give their customers a greater motivation to keep on working with their brand, by visiting the website, social network, and increasing purchases.


A Gartner consumer survey conducted across 10 countries revealed that 62% of respondents are members of one or more retail loyalty programs. But despite the high percentage of memberships, the participation and offer use remain relatively low. Over one-third of participants across retail sectors report never utilizing the programs in which they are enrolled .

Of course, setting up a loyalty program provides challenges as well. For example, these programs take time to develop. Loyalty programs require that you maintain relationships with your loyal guests and create a personalized experience that recognizes each as an important asset. This doesn’t happen overnight.









Posted on 4 March 2015 in Loyalty

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