Loyalty programs have undergone a technological metamorphosis from its rudimentary beginnings. Arguably it was American Airlines that kick started this transformation nearly three decades ago. From ‘nice-to-have’, loyalty programmes have become a strategic imperative for customer-centric organisations. Contemporary customers in the post-global market are more demanding than ever before and thus organisations are forced to adapt their loyalty programs to be more sensitive towards the members they serve.

Most of the interactions between the program and the members have become customised including communications, promotions, rewards etc. It is technology that is playing the most crucial role in facilitating this change. The technology platforms on which today’s loyalty programs are run can enable quicker enrolment, accruals, redemptions and creation of varied promotions all fuelled by automated analysis and reports.

Attaining deployable customer-centricity in a loyalty program is indeed a gradual & progressive process which also requires the re-orientation of an organisation’s internal processes and conditioning of employees to put customer needs first.

Translating Insights into Action

The success of a loyalty program lies in its popularity among the members. We suggest a few pointers from our implementation experience that would go a long way in helping you create an effective loyalty solution.

• Capture transactional information accruing at the point of purchase terminal. Use customer segmentation to decipher purchase behaviour(s). This will enable in the creation of customised communication ensuring better response to campaigns.

• Have a business intelligence strategy in place to generate multiple analytical reports-tactical and strategic. While tactical reports will focus on improving revenue at a unit level like store-specific promotions, up-sell, cross sell opportunities etc, strategic reports will track the overall program performance. Used in tandem these reports can help in ensuring that the program is adhering to attaining its original goals.

• Use data from various sources (enrolment form, accrual & redemption patterns along with transactional data to identify MVCs (Most valuable customers) so that the organization can rationalise its expenses towards providing preferential treatment to them.

• Ensure your solution recognises customers' individual milestones, and allows you to reach out to them on a regular basis.

• Identifies "valuable risk customers" on a regular basis facilitating timely intervention thus reducing customer churn

Steps to Adopting Customer Centric Loyalty Marketing Solution

Needless to say, a customer centric marketing loyalty solution is critical for maximizing profits, out-performing competition and expanding market share. Maturation of a loyalty marketing solution happens over time with the help of the most critical ingredient-transactional data. Adaptive responsiveness to evolving customer needs is decided by the stage of technological and business maturity of a program.

Collect and organize data - Adopt a customer loyalty solution that allows not just the collection of data but its organisation into smaller and usable modules which will help in the accurate assessment of actual ‘market’ and locate existing and emerging trends. Organised data can be extrapolated not only with information on prevailing economic scenario but also to competitive landscape to fine tune a loyalty program that is future-proof. It goes without saying that the more detailed loyalty data repositories are, resultant reports generated would be more pointed making loyalty offers more attractive to its members.

Profiling customer segments – psycho-social profiling of customer segments is integral to the analysis of the health of a loyalty program. Besides demographic segmentation, your solution should allow you to pull up data that displays attitude, behaviour, spending, and customer satisfaction. This helps in ongoing fine-tuning of the loyalty strategy.

Integrating loyalty with organizational goals - Once insights are obtained, it is important to align them to organizational goals thereby drawing out a winning, fit-for-purpose marketing loyalty program. By identifying target groups and actionable touch points, it is far easier for organizations to get higher returns on loyalty programs. Research shows that when it comes to loyalty programs, one size does not fit all as customers are promiscuous by nature and thus heterogeneous in their preferences.

Adopt tailored tactics – While generic marketing is about broadcasting, loyalty marketing is the practise of narrowcasting thus its tactics has to be tailored to needs of specific customer segments. These tactics may be based on regions, gender, spend, membership to specific social class etc. Specific customer insights go a long way in sharpening visual merchandizing, planning campaigns & promotions and ensure that spend on any media returns more bang for the buck!

Conclusion:

In summary, while designing and implementing a loyalty program, it is important for an organisation to identify a partner who has multi-industry, hands-on experience. Such a partner can help not just in facilitating the implementation but also advice on tracking the effectiveness of promotions, identifying the MVCs, and setting the parameters to identify the overall profitability of the loyalty program. ITC Infotech prides itself as a pioneer in enterprise loyalty implementation across verticals including airlines, hospitality, retail to name a few. Our greatest assets are our people who have seen loyalty programs from close range and have been advising clients on loyalty strategy thus making our implementations relevant and accelerated.

So are you ready to go out and leverage the benefits of customer centric loyalty marketing?