There is a difference between CRM and loyalty programmes – often loyalty programmes actively seek to maintain customers by rewarding them with a hard currency, like points. Loyalty programmes are designed to develop and maintain customer relationships over a sustained period of time by rewarding them for every interactionwith the brand – for instance, you may earn points on a purchase, for shopping on certain days, completing a survey, or choosing to receive a statement by email.
Consider health insurer Discovery and their Vitality program: it aims to keep customers healthy by rewarding them for health-related behaviours like exercising, having regular check-ups, stopping smoking and buying fresh foods. By doing so, it reduces the burden of ill-heath on the medical aid itself.
Not all loyalty programmes are created equal. Many brands have embraced them as a way to improve their sales, and consumers have come to believe that they are simply a way of extorting more money from them.
To create an effective loyalty programme, consider the following:
• Carefully calculate the earning and redemption rates of points – a loyalty programme needs to give the appearance of real value, while working within the company’s profit projections
• Loyalty programmes are about engagement – you need to find a way to partner with the customer
• Rewards are key to success – you need to reward the customer in a way that is real and desirable
• Customer care is important – technology allows for effective real-time conversations
• Data is central to success – you need to maintain accurate records in one central place
• Digital allows for innovation – this can apply to new payment technology, digital communications channels and more
• Trust is pivotal to success – customers need to know that their data is being protected and that you will honour your commitments
• Loyalty programmes are not quick wins– consider up-front how the programme might come to a close or you risk alienating and disappointing customers and undoing any positive results
Consider health insurer Discovery and their Vitality program: it aims to keep customers healthy by rewarding them for health-related behaviours like exercising, having regular check-ups, stopping smoking and buying fresh foods. By doing so, it reduces the burden of ill-heath on the medical aid itself.
Not all loyalty programmes are created equal. Many brands have embraced them as a way to improve their sales, and consumers have come to believe that they are simply a way of extorting more money from them.
To create an effective loyalty programme, consider the following:
• Carefully calculate the earning and redemption rates of points – a loyalty programme needs to give the appearance of real value, while working within the company’s profit projections
• Loyalty programmes are about engagement – you need to find a way to partner with the customer
• Rewards are key to success – you need to reward the customer in a way that is real and desirable
• Customer care is important – technology allows for effective real-time conversations
• Data is central to success – you need to maintain accurate records in one central place
• Digital allows for innovation – this can apply to new payment technology, digital communications channels and more
• Trust is pivotal to success – customers need to know that their data is being protected and that you will honour your commitments
• Loyalty programmes are not quick wins– consider up-front how the programme might come to a close or you risk alienating and disappointing customers and undoing any positive results
