Go beyond the price cut in loyalty programs
The economy and the growth of social media have changed consumers' views of how they value brands and, as a result, it's getting more difficult to create and keep loyal customers.
Merchants can't change the economy, but what they can do is reach potential customers through their preferred channels – and right now, those channels are numerous. ATG recently deployed a survey of more than 1,000 consumers which found that more than three-quarters of respondents use two or more channels to find and purchase services and goods. In addition, 30% use three channels. Not only do merchants need to spread a wealth of product and service information across all of these channels, but they need to make loyalty programs accessible in all channels as well.
CVS Pharmacy (a client) does an excellent job of this through its ExtraCare program. The pharmacy keeps this program consistent and readily available by allowing customers to earn “Extra Bucks” on in-store and online purchases, and check their earned points on the Web. The company continues this loyalty program outreach through its presence on social networks such as Twitter.
Once you've hit all the relevant channels, the next step is to personalize your core loyalty program. With an integrated e-commerce platform, merchants can determine what their loyalty program users really value. Consumers will always value a good deal, but some also value convenience and speedy transactions, while others value early access to new products and some place higher value personal assistance. As you begin to understand your segments and what they value, you can then offer alternatives to low prices and margin cuts to keep those customers loyal. Of course, as an added bonus, understanding and tracking customers' behaviors can also help merchants to cross-sell and up-sell more inventory.
The combination of cross-channel outreach and personalization are essential to building an effective loyalty program. When you can truly understand what's important to a consumer, and then give them what they value most in the places where they research products and buy the most, you're offering a distinguished service, and that's the key to really building brand loyalty.
Kelly O'Neill is the product marketing director at ATG, a provider of cross-channel commerce solutions based in Cambridge, MA.