Brands turn to loyalty efforts as recovery remains sluggish

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Brands turn to loyalty efforts as recovery remains sluggish
Brands turn to loyalty efforts as recovery remains sluggish

Major consumer brands are premiering new loyalty programs or overhauling aging membership initiatives to meet consumer expectations, satisfy corporate pressure for ROI, and solidify their customer bases during still-challenging economic times.

Dunkin' Donuts launched its first national loyalty program, giving members one "Dunkin' Dollar" for each $20 spent. "We wanted to find a way to celebrate and reward our best guests," said David Tryder, director of interactive and relationship marketing at Dunkin' Donuts. "Particularly the customers who come in every day." 

Tryder said it was important to develop a loyalty program that made it easy for customers to get involved and that rewarded them for purchases they would routinely make. "Consumers are more demanding than ever before and companies are re-evaluating whether they're meeting and exceeding customer expectations," he said.

Restaurant chain TGI Friday's, meanwhile, relaunched its "Give Me More Stripes" program. Loyalty members are "three to four times more valuable than another guest" to the company, said Trey Hall, CMO of TGI Friday's. Dunkin' Donuts, TGI Friday's and Carlson each premiered a new or revamped customer loyalty program during a 10-day span ending in early April. Travel companies including Southwest Airlines, Virgin America and Intercontinental Hotels Group debuted or relaunched existing programs in the prior month.

The spate of relaunches has its roots in the "Great Recession," noted Luca Paderni, VP and principal analyst at Forrester Research. "The recent economic crisis created more interest in these programs for marketers," he said. "A few companies that weathered the crisis said it was due to retaining customers through existing loyalty programs."
 Although the economy has improved, brands are still under pressure to produce return on investment, and they see loyalty programs as a viable method of doing just that, added Paderni. 

Travel and hospitality brands also cited the still challenging economic conditions as a reason to solidify their customer bases through 
loyalty programs. 

"Loyalty members provide a strong revenue foundation," said Heather Passe, VP of marketing, loyalty and e-commerce at Carlson, which debuted an enhanced loyalty program featuring free in-room Wi-Fi and complimentary room upgrades. "This is even truer during economically challenging times, when loyalty members contribute an even larger percentage of revenue."

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