http://risnews.edgl.com/retail-best-practices%5CStrategies-for-Driving-
Loyalty-and-Engaging-Consumers35943
Posted Date: 2/9/2010
Strategies for Driving Loyalty and Engaging Consumers
Retailers are among the top industries utilizing loyalty programs and
according to consumers merchants are under-valuing perks, discounts, deals
and additional service opportunities. In a new report from the Chief
Marketing Officer (CMO) Council, both customers and marketers agree that
deeper engagement and personalized contact drives loyalty.
According to the study:
61% of marketers believe that loyalty program participants are the best and
most profitable customers. And, an almost equal number of respondents
(65%) view customer loyalty program investments as a very essential, or a
quite valuable part of the marketing mix.
13% of respondents believe they have been highly effective in leveraging
loyalty and brand preference among club members 20% don't even have a
strategy for this 25% admit they have not mobilized brand loyalists to
become active advocacy agents The study also reveals that marketers are
mostly inducing loyalty with discounts or free products and premiums rather
than quicker, better service or improved customer handling:
39% of respondents view discounts and savings as the key member benefits
34% view free products and premiums as essential incentives 33% are
committed to offering points for merchandise redemption as a further
motivator Customer complaints about loyalty programs include:
30% of marketers report that some customers see little or no added value to
becoming a loyalty member 24% indicate rewards lack substance 24% feel
they don't get enough personalized attention 21% have problems with
receiving too much spam email and junk mail 23% complain about a lack of
individualized communication 18% have issues with redeeming points and
miles.
Despite these challenges, investments in loyalty programs will continue as
nearly 80% of marketers are committed to maintaining or further funding
loyalty programs as customer retention and relationship building vehicles.
Over 34% report they are significantly increasing their commitments, and
45.9 are maintaining their current commitments. Just 4% expect to
discontinue their programs.
Online channels dominate expected investments as nearly 60% of the
marketer respondents said they planned to make better use of the Web and
new community and networking tools to grow and develop loyalty
programs. Other key actions for generating a greater ROI from club
members include:
Personalizing interactions and target messages (51%) Increasing frequency
and relevance of communications (39%) Gathering more insights and
intelligence for better customer handling (38%)
Adding new benefits, incentives and inducements (36%) Studying industry
best practices and making adjustments accordingly (19%) While social
media also tops the list of investments for marketers, consumers report that
point-of-sale information, service representative interactions, company web
sites and word-of-mouth are the primary sources for learning about loyalty
clubs:
65% acquired information about the programs in retail environments
compared to only 4% in social media networks, 3% in blogs and 11% in
online advertising.