Opening the Doors to Loyal Customers

When going through the day's mail, I subconsciously sort it into three piles: garbage, may open and required reading. The virtual inbox will be no different for consumers as they begin to face a barrage of commercial e-mail. For advertisers, the ultimate goal will be to get into the “may open” pile rather than the trash.

Research firm eMarketer estimates that by the year 2002, 59 percent of the U.S. population will be active e-mail users, up from 35 percent today. The sheer pervasiveness of e-mail makes it a natural vehicle on which brand marketers will want to ride. In fact, Forrester Research predicts that marketers will send no less than 200 billion commercial e-mails by 2004.

Marketers all know that a single mailing to a list costs anywhere from 50 cents to $1. But sending a highly personalized e-mail costs 10 cents or less and provides instant feedback.

E-mail is a relationship building tool, and when used respectfully, it can capture and retain a customer for life. Web sites are an inherently passive mode of communication, and all the brand marketing and advertising during the Super Bowl cannot establish a one-to-one dialogue with the consumer the way e-mail can.

E-mail marketing will be Web advertising's most effective tool, but using it to engender loyalty will take more than an address and a send button. It will take establishing a relationship with the consumer — a relationship based on quality goods and services, respect and relevance. It sounds simple enough, but these foundational building blocks in the offline world are more complex in the e-world.

The e-mail doors, now just cracked, will swing wide open to commercial visitors in the coming years. But what will differentiate those that get invited in and those that will be left standing on the porch? Who will be asked back?

No Thanks, I've Got a T-Shirt

There are lots of ways to promote loyalty. Some traditional thinking has focused on rewards. The well-crafted programs, however, are much more subtle and satisfy a consumer need beyond the bribe.

When the architects of the Hertz #1 Gold program asked their customers what they wanted from their privileged status, it wasn't golf balls and T-shirts. Customers wanted to get in and out of the airport quickly and to be recognized. The reward in this case needed to be service-oriented. Thus, came bypassing the check-in counter, the customers' name in lights, covered walkways and cars that were purring with either heat or air conditioning when they arrived. Loyalty becomes entwined with the total brand experience, and the soft rewards of service very often outweigh the perks of free stuff.

In the bricks and mortar world of upscale retail, we would ask: If you lived across the street from Saks Fifth Avenue, would you drive to Neiman Marcus? If the answer was yes, then you've changed a behavior — overriding convenience for preference. In the online space, the question becomes: Will you begin using another brand if you have its competitor bookmarked?

Changing Behaviors

Loyalty is all about a share shift that results in incremental revenue — a change in a consumer's attitude and behavior.

Changing behaviors online through loyalty programs will be predicated on two primary issues: respect for the consumer's time and delivery of relevant messages. When it comes to marketing messages online, a mind-shift is occurring, and power is being put in the consumer's hands. Valuable messages will be customized messages that engender a long-term relationship with the customer.

A new e-mail marketing company, e-Rewards, not only allows the consumer to choose the topic and frequency of messages but also adds an incremental reward. Imagine when you're watching television if you could know in advance the number of commercials you will see and their content and then get paid by the advertiser to tell them what you thought. This online e-mail model is designed to drive long-term loyalty with the e-customer.

It's worth noting that there's often a misconception that loyalty programs can be used for customer acquisition. While new customers may be attracted by the reward, it does not necessarily build loyalty. Long-term loyalty requires more than a prize. Further, if your product is broken or noncompetitive, a loyalty program will not resurrect it. If an online pet store never delivers your dog's food on time, there is no reward program that can change the customer's perception and subsequent behavior.

Behavioral changes are becoming tougher to shift online, primarily because of product parity. Parity in a market — same product, same price, equal availability, parallel quality — is achieved at light speed on the Web. In the fast-paced electronic-commerce space, loyalty programs can make the difference in shifting a customer from one brand to another.

So when I sort through my e-mail inbox with my cursor key set squarely on the delete button, my trigger finger may be more forgiving if online marketers learn to respect the consumer's time and send only relevant messages.

Then perhaps you'll not only be elevated to the virtual “may open” pile but actually be invited to begin building a highly valued relationship — the foundation for lifetime loyalty online or offline.

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